Episode Transcript
[00:00:00] Luke Sonnen: Hi, I'm Luke Sonnen. Welcome to the COO Roundtable powered by PFI Advisors. Here's your host, Matt Sonnen.
[00:00:26] Matt Sonnen: Welcome everyone to Episode 47 of the COO Roundtable. This is the final episode of 2022. Time sure flies when you're having fun I must say. I'm very excited for today's conversation. I've grabbed two incredible leaders who have both been valuable additions to our COO society community. They both have shared their wisdom with our group and have always posed really great questions to me and the other members. I'm really excited to have them share their experiences with our podcast listeners today.
Joining us from First Wave Financial in Satellite Beach, Florida is Julie Allen. Julie is the Vice President of Business Operations. She's been at the firm for a little over two years after a long career in healthcare. I'll let her tell you that story but she said while listening to some old episodes just in prep for this recording, she really resonated with Mike Reed from Dakota Wealth. He joined us for Episode 19 and talked about his transition from healthcare to financial services. Julie will tell you her story in just a minute but first off, let me just say welcome Julie.
[00:01:34] Julie Allen: Thanks so much, Matt. I'm really honored to be on the podcast today.
[00:01:37] Matt Sonnen: Great. Joining Julie from Vance's Wealth in Pasadena, California is Chief Operating Officer Chris Pelch. Chris has spent most of his career in wealth management but I saw he did a two-year stint with Teach for America while getting his masters in Secondary Education and Teaching. That's really amazing. Welcome to the podcast, Chris.
[00:02:02] Chris Pelch: Thanks, Matt. It's an honor to be here.
[00:02:04] Matt Sonnen: Great. I'm going to start with you, Julie. Why don't you tell us a little bit about First Wave Financial?
[00:02:10] Julie Allen: Thanks, Matt. First Wave Financial has a super cool story that is beginning in a CPA firm. Our first client is actually a classic example of our ideal client. It's the mother of our founder Tom Kirk. Tom's dad was a doctor and he spent his entire career saving wealth and amassing wealth to be able to provide for his family without really knowing how much money he needed.
He just kept on working and working and worked, even after he was diagnosed with cancer, and worked up until he passed away. When he died, they discovered he had plenty of money. He could have taken off significantly sooner and enjoyed his life, the end of his life with Tom's mom. As a result, he instead ended up with significant wealth.
It was a very sad moment with the family when they lost their dad and could have had him enjoying life a lot longer. During the second phase of that was investing the family money. They tried several options that was from brokerage companies, bank trust departments, and even insurance-based advisors. What they came across were cookie-cutter approaches to investing in ready-made solutions, certainly proprietary products. They were offering each of these options without even knowing about her. Even within the same bank, they would come up with every year or so, a new proprietary product that would have more fees associated with it.
There was a light bulb that went off with Tom and he decided there had to be a better way. He started his own firm and it was fee-based from day one. That was in 1995. He operated side by side with a CPA firm for a number of years and eventually, they bought each other out. He re-branded in 2012 as First Wave Financial. Four years later in 2016, he transitioned ownership internally to an advisor that had been with him for almost 20 years who happened to be my sister. That was a great launch for the firm. In that, he says he found the cure for financial cancer.
People are dying out there making bad decisions, sometimes fatal decisions with their wealth. He wanted to offer another solution. In our firm, people who get the most value-- I share many of the same characteristics. They have complexity that wealth brings. Many of them are in a life transition that have many complicated issues that need to be solved. They come to us with a million dollars or more of their decimal assets.
They get the opportunity to participate in our unique process we named the Care Solution, which includes the financial plan. They follow our advice. They ignore the media that is out there in the financial space and the hype that comes along with it. They're all great delegators. They let us help them in all things financial and allow us to manage all their money and as a result, they refer their friends and family.
That's been the foundation of the firm. Today we have an AUM of about 400 million, it changes for any given day of course. We have a great team of 12 employees with three advisors that support the needs of our 233 clients.
[00:05:51] Matt Sonnen: That's an incredible story. I've heard performance reporting tools have come out of RIAs. We just didn't think there was enough. There was anything that works. We built our own and then realized this actually would work for others. We've heard CRM stories and I definitely have heard that story before of RIAs started as a single-family office, but I've never heard in detail a story like that. That's incredible.
[00:06:17] Julie Allen: Thanks. One thing you may ask is why First Wave? How did we come up with the name First Wave? We're sitting here in a beach community. We all grew up on the beach and the founder was a surfer. There's a lot that's in common with surfing and investing. When you're sitting on a surfboard and you're out there paddling in the water, you're looking at the horizon, and waves are breaking to the left and right and you're sitting in the middle going where's the waves?
You paddle over to where the wave was. Sometimes you're too early, sometimes you're too late. Many times you miss it completely. We took that analogy to where the goal is to capture the First Wave of performance across the entire spectrum. We respond strategically across the global market as it occurs instead of trying to anticipate it.
[00:07:17] Matt Sonnen: I love it. That's fantastic. Definitely, the tide going in and out, that definitely relates to the market. I love the analogy. Chris, give us a story of Vance Wealth.
[00:07:30] Chris Pelch: Absolutely. Vance Wealth was founded in 2003 by John Vance. It was a solo advisory practice, building one relationship at a time. Fast forward to today, we now have about 450 million in assets under management. As Julie said, that's been ebbing and flowing based off market volatility. We have around 300 relationships that we serve. The team has now grown from one team member initially, John the founder, to 18 people at the time of this recording. We're actually based in Santa Clarita, California, and we do have a second office in Pasadena. We serve people throughout those two communities.
The firm really has three primary client types that it serves. The first and the core of the business, what we were founded on is working with families who need help answering the fundamental retirement planning question, “do I have enough to last me the rest of my life and to allow me to do the things that I want to do?” That's really what we're answering. We are putting numbers behind that and our foundation follows a traditional AUM model and probably accounts for about 75% of our revenue today.
Over the course of John building the business, he really started to gravitate towards business planning for himself and started to network and get to know other entrepreneurs in our community. Today we also serve a second client type which is business owners. Oftentimes they don't have the time or the interest to focus on their personal finances because they've got a business to run. We focus heavily on tax planning for these clients and helping them to think through all the various facets of their wealth.
Oftentimes the business owners don't have large investment portfolios because their wealth is tied so closely into the business they're running. Oftentimes real estate is heavily involved as well. We've adopted a fee-based model for serving these clients and that accounts for about 15% of our firm's revenue.
Then the third client type which actually fits really nicely with the business owners we also serve group 401K plans. We have our 300 relationships, about 40 of them are group 401K plans, and that's about 50 to 60 million of our total assets. There, we're focusing on raising fees, executing on a prudent process, and of course educating planned participants and things of that nature. That makes up really the last 10% of our firm's revenue.
Historically, we've grown just through referrals. Word of mouth from clients who are satisfied and happy with the work we've been doing, COIs, and other professionals in the community. Then, just community involvement with organizations. It's important for us to have advisors who sit on boards and things of that nature within the community.
Our plan for the future is shifting. It's our goal to build a digital marketing engine that will allow us to scale, beyond the dependency of one-to-one relationships. We think that's going to be an important driver of our growth in the future. Our stated goal for in the next three years is for digital marketing efforts to generate at least half of our firm's inbound leads. We're really excited to dive into that space and continue to use that to catapult our firm forward.
[00:11:05] Matt Sonnen: Fantastic. Half of your leads going forward will come from digital marketing. That's incredible.
[00:11:11] Chris Pelch: You got to be ambitious, Matt. Right?
[00:11:13] Matt Sonnen: [laughs] Yes. That's great. I love it. Julie, I'll go back to you. I mentioned your background in healthcare. Walk us through the path that led you to running operations at an RIA just a few years ago.
[00:11:26] Julie Allen: That's great, thanks, Matt. I started my professional career in healthcare administration. Most of that time I was working with independent entrepreneurial-minded physicians. I ran their medical practices, built facilities, surgical facilities, and ran labs, imaging, and all the other operational activities that follow along that include M and A, finance, HR, compliance, and IT, that are all amazingly similar to the operation side of financial services.
I was very happy when I made the transition from healthcare to financial services. I started listening to this podcast as we talked about, and hearing the different career paths of others really did give me the confidence that I could make the jump to financial services. Matt, you may think I'm making it up but I actually set a goal for myself two years ago to one day beyond this program.
[00:12:26] Matt Sonnen: Awesome. [laughs]
[00:12:27] Julie Allen: Yes, I thought it would be an amazing opportunity that somebody that I highly respected, which of course is you, deemed me competent and that I could be able to add a valuable perspective on the industry. Actually, the last of 5 biological children in my family to join the financial services industry. Three of my siblings work in one firm and then my sister and I work together at First Wave. It leads to some funny conversations around the dinner table. We think it's funny, I don't know if the rest of the members of our family think it's so much fun, but it's been a great time over the last few years. I wonder now, and my family wonders why it took me so long to join the "family business."
[00:13:12] Matt Sonnen: Yes.
[00:13:13] Julie Allen: Once I was able to get into the industry, I really thought out mentors and started networking and found learning opportunities. When I heard about the launch of the COO society, I jumped into that as quickly as I could and I just have really learned a great deal from the society, it's great. I have related mostly around the client-facing activities, because that's completely different than it was in healthcare, from client on-boarding, client segmentation, organizational design, and then of course succession planning, the list goes on and on. It's just been a great opportunity to be a part of that program, and I look forward to more learnings in that.
[00:13:58] Matt Sonnen: Awesome. Thank you for all of that. As someone who owns the business with my wife, everybody says, wow, how do you work with your spouse? I said, "We have really strange date nights [laughs]." Because we just sit around and talk about work all day long. I definitely can relate to your family sitting around the dinner table and talking shop the whole time [laughs].
[00:14:17] Julie Allen: Yes, absolutely. I'm really glad my skills did transfer so well from healthcare to financial services because it would be terrible for my sister to have to fire me.
[00:14:27] Matt Sonnen: [laughs] That's great. Chris, I mentioned your career path a little bit and some of the things you've done. Walk us through your journey.
[00:14:37] Chris Pelch: Yes, just to piggyback briefly on Julie's comment, this podcast in particular was really important to my decision to step into this role as a COO. I mirror a lot of Julie's comments in terms of a desire to be on the podcast but also just driving so much value from it.
Thanks, Matt, for the work you're doing because it's been really helpful and transformative for my own personal career journey, so thank you.
[00:15:03] Matt Sonnen: Thank you.
[00:15:04] Chris Pelch: As you mentioned right after college, in fact, the day after I graduated, I went to UC Irvine in Orange County, California. The day after I graduated, I jumped on an airplane and flew to St. Louis Missouri, and joined a program called Teach for America, where I taught science and coached basketball at a low-income under served high school in the city. I did that for two years. As you mentioned, I got my master's in education during that time.
When the two years were up, that's the commitment you make through that program I was ready to pivot to something else. I found myself drawn to the industry of private wealth management combining some of the skills of teaching with some of the analytical skills I've always been naturally gravitating towards.
I took a job initially as just an entry-level advisor at a brokerage firm. I quickly realized I had no interest in traditional sales within the industry cold calling and things of that nature. I left that job fairly quickly after starting. A couple of months later, I was introduced to John, our founder through a family friend. John ended up offering me a position as a blend between an operations associate, and a junior advisor at the firm.
In fact, my first project was migrating the firm's CRM from Act 2.0 to Microsoft Dynamics. Was thrown right into the fire with the big operations project there. From there, I just continued to take on challenges at the firm and I learned a lot. Was responsible for moving us to a new trading platform. Was part of transitioning us to a more institutional approach to investment management and a model-based approach, which is what we're using today. I became the firm's primary trader and then eventually, I stepped into a role as a lead advisor and I was managing about a third of our firm's relationships.
That was in 2017. At that time, I didn't think this was the right industry for me or the right place for me. I actually stepped away and I went back to school for two years in a full-time MBA program. I had no intention of getting back into the private wealth space. I was aiming to pivot into maybe the technology industry or perhaps a large institutional investment management firm. Over the two years of the program, I found I really loved small businesses and I did not want to join a big global conglomerate. A lot of my skills and interests aligned really well with the private wealth space. What I thought was accidental in landing in the industry actually seemed to be quite appropriate for me.
After wrapping up the MBA program at UCLA, I joined an RIA based in Beverly Hills called Checchi Capital. That firm served ultra-high-net-worth clients. My role was the mix between business development and financial planning. Then when COVID hit, the business development side for me dried up. It was pretty early in that process and hadn't really achieved the groundswell of new clients. I then started to shift into more of an operations role at Checchi Capital.
It was at that time about October of 2020 that Vance Wealth approached me about rejoining the firm and stepping into the role as COO. The firm had decided to leave the independent broker-dealer platform that it had always been on and to become an RIA. At the time of that switch, they really needed some professional management at the firm to step in and run the day-to-day operations.
After about 3 months of discussions listening to lots of these podcast episodes, and talking with my wife about it, I did decide to rejoin Vance Wealth. I stepped into the role as COO in February of 2021. I'll be coming up on two years in that role here in a couple of months.
[00:19:11] Matt Sonnen: That's fantastic. This year saw a lot of turmoil in the markets, which we hadn't experienced in quite some time but one trend that continued was the fight for talent. We've seen this for the last several years, in Schwab's bench marking study this year. Advisors ranked recruiting and increasing staff skill sets as the highest priority for next year, even ahead of client acquisition which you never see. [laughs] Client acquisition is always number one on those lists.
Lisa Salvi of Schwab, she said, "In 16 years of doing this study, we've never seen hiring come in this high on the priority list." Literally number one. We've talked a lot on this podcast that at most RIAs, the COO is the firm's hiring manager. I wanted to ask about different strategies when you go through incorporated when on-boarding new employees.
I think, and people have heard me on this podcast say, I think in general the RIA industry does a pretty poor job of bringing on new employees. There's the hiring process and putting these poor candidates through the interview process, which we can say people do a good job or don't do a good job, but once they've made it through the interview process and they show up on their first day, I feel there's a massive letdown in ushering these people into the organization. Chris, I'll go to you first on this one.
What are you guys doing from an employee on-boarding standpoint?
[00:20:36] Chris Pelch: Yes. Well, I'll start by saying that we probably haven't found the right answer to this question yet, but I do think we are getting closer. I think as you just pointed out for many years, the on-boarding at our firm has been pretty loose, right? Our approach has been almost learned by osmosis, get new hires engaged and work early on, and then steadily add to their plate. Then we would just expect new hires to figure it out and when they needed help they'd ask for it, and we'd provide support as it came when those questions came our way.
Of course, that isn't a very systematic approach. It doesn't create a tremendous amount of consistency in the on-boarding, and in fact, leads to a lot of variants in new hire on-boarding, and so as we often do, I think we naturally went to the other extreme, right? We started taking an approach for new hires when early on in my time in the role of building out a calendar, almost for like every hour of an employee's journey for the first six weeks of employment.
Of course, this was overkill. Through that process, we were able to develop a pretty thorough outline of what we wanted people to learn in their first weeks on the job, but it was leading to several challenges. One is that was really hard to manage, and it put a tremendous amount of work on me, and others on the team who are involved to build out these schedules because they're fairly customized to the new employee and their role.
Secondly, just balancing the calendars once they were set was a pretty big mess, and we always had to make changes on the fly, which of course brings into question whether the plan is really a good one in the first place. Then finally, I think most importantly, it wasn't allowing our new team members to build the necessary time management and critical thinking skills they needed to be successful members of the team, so that was becoming a bigger and bigger issue for us in that approach.
Today what we've done is we've tried to find ourselves back in the middle, we're really focused on two major themes with employee on-boarding. First is exposing new hires to the different roles people play at the firm. We want everyone to have a working knowledge of how all the pieces fit together. I think that's important, whether you're the receptionist on the marketing team, the operations team, a parent planner, an advisor, whatever, I want you to understand what everyone's doing at the firm. You spend time there with one on one meetings and face-to-face interactions for team members to really understand just what everyone does and how it works, fits together.
Then the second, and I think probably the most important is we focus on instilling good habits in our team early on so they feel productive and in control of their work. There's two examples I'll give of that. First, each team member is taught in the first week, they're here to build out a start and end-of-day process to what their week should look like.
Of course, early on we help with that a bit, but our goal is to have every team member create a habit they set to make each and every single day successful for themselves. By doing that, it requires them to think through what their day is going to look like, and at the end of the day to set the stage for the next day. It leads to what we find to be more productive days, which turn into weeks and months and so on.
Secondly, we'd also expect our employees to time block on their calendars. There's a component of that where we just want to see and know what everyone has on their plate at any given time, but more importantly, we found the employees who really embrace time blocking and clearly mapping out their days, are the employees who tend to get through most in every day, and are the ones who at the end of each quarter are accomplishing their goals most consistently. We're also focused in the on-boarding stage at really driving that point home to new hires.
What we realized was that by spoon feeding new hires a calendar with everything they needed to accomplish and eventually taking that away from them after six weeks, they'd struggled to figure out what to do next and they were depending on that a little bit. We hadn't built the right skill set. Now, by focusing on forming good habits during that on-boarding stage, our goal is for team members to feel confident in their role, and in control of their workload. That's really where we're focused right now. I think it's having success, and we'll see as we continue to bring new members onto the team.
[00:25:21] Matt Sonnen: It's such a basic concept, but myself included, none of us are really good at it. Start the day with asking yourself, "What would success look like for today? Like, what has to happen for me to feel good at the end of the day?" Nobody, again, myself included, everyone is you just show up, you open your emails, right, and bang, bang, bang, [chuckles] and you start, you get into reaction mode, but I think that's fantastic that you're really trying to drive that habit of ask yourself what is success going to look like?
Well, Julie, I know you created a mentor program for new hires. Talk to us a little bit about that.
[00:25:55] Julie Allen: We do have a great mentor program for all our new hires. We assign a mentor that is typically in a different department, and every new hire, they meet once a week through their first 90 days with their mentor. Sometimes it's a short time of 15 to 30 minutes, and other times they'll spend more time with them and they'll go out for lunch to really get to know each other. The mentor's role is to help the new employee to get to know the culture of the firm, and have a safe zone to ask questions that they might be either scared or intimidated to go to their trainer or the supervisor about.
It really does help to have that mentor to answer some of those, what they might consider a silly question. We are also a long-time participant in the Strategic Coach program which is an organization that provides distance coaching for entrepreneurs. We use all the strategic coach tools and a unique process to help to create a self-managing team. Many of our team were either raised by entrepreneurs or had their own entrepreneurial pursuits, and all appreciate the culture that we've built, and the mentor program helped to introduce all our new hires to the First Wave way.
In meeting with their mentor, each week after that meeting they craft an email they send to their leadership. To me, that would include what's their positive focus for the week. They answer any questions that they might have about their training spreadsheet. Are they keeping up with their training program? Are there any problems they encountered during the week? Are they making progress on their 90-day success criteria? Are there any additional resources they need?
Also in that process, there's a formal 45-day check-in process, same with a 90-day, have a 90-day progress conversation, and then we do it again at 180 days. It all rolls into annual progress conversations that we're in the middle of right now. It's awesome process that we have within the firm. The goal is that we live, are the mission of the firm every day, which is helping people we care about, create the life they dream about.
We use it internally with our team, we use it with clients, and with the goal that we're delivering to our team, me, in particular is my team is my top clients, and to be able to deliver and provide for them the simplicity, balance, confidence, and conviction in their job that they've got, they're doing the best thing for themselves and for the firm, and they've got simplicity in how they have order and control of their day-to-day life.
Working life that leads balance to their personal life as well, creating decisions that support and reinforce each other, and leading to them having confidence in their job and to know that they're on a good path for their personal life, and that they are working towards securing their own personal financial future that they desire. Then ultimately, this whole process and the mentor program is key to that, it's giving them the conviction that they'll be able to enjoy the success of working in a healthy, passionate environment, that will lead to success today and into the future of their career.
[00:29:28] Matt Sonnen: I love it. I love what both of you have talked about, just making sure right from day one, that employees are feeling not justified, what's the word I'm looking for, are feeling fulfilled in their careers and in their pursuits within your firms. I love it.
Chris, once you've onboarded the employees, talk to us about how you keep them engaged ongoing and feel like their career is progressing in a manner that's going to keep them motivated.
[00:29:58] Chris Pelch: Yes. That is a great question, Matt. Again, I wish I had all the answers, [laughs] but frankly, we're still working through it. There are a few things we're doing today that may be worth sharing here.
First of all, I'd just say, we understand how vital our team is to the success of both our clients and our firm. One of the reasons that we're hyper-focused on growing our firm is because we have a lot of young people on the team who are looking to advance their careers. They want to feel confident that Vance Wealth will continue to provide them with the opportunities that they need to succeed. We're constantly focusing on growth because as the firm grows, we can give those folks the opportunity to step into newer roles and take on more responsibilities.
To that end, we actually hired an HR manager a couple of months ago. Her name's Brandy Sanchez, and she's been awesome. The primary reason that we hired her is to make sure that we have someone who is full-time thinking about our employees and advocating for their continuous growth. As Matt and Julie, you're pulled in so many directions as COO and it was just really important for us to have one person in this role constantly thinking about our employees and that being their primary focus.
A big theme that Brandy's leaving the charge on right now is creating a culture where honest and immediate feedback is expected. It's easy to avoid interpersonal conflict to focus solely on and applauding the good work that others do. That is important, but you can't expect people to grow if they aren't aware of the areas for improvement. That's where we found that disconnects can begin to form between reality and expectations between the firm and its team members.
We're focused in two areas. They were focused on helping managers get comfortable with providing all kinds of feedback on a frequent basis, both constructive and positive reinforcement. We want managers to be given that feedback as frequently as possible, daily and weekly. Then simultaneously, we're retraining our team so they feel confident in advocating for themselves and taking personal ownership of their career progression. I think the last point is really the most important. When I think about keeping the team motivated, it's making sure that they feel like they're in control of their career progression at Vance Wealth, that it's not something that I'm controlling or their manager is, or John the founder is, that they feel like through their own work and effort that they can control their career outcomes.
That's really important for us, and I think important for people to feel that sense of control if they want to have long and healthy career in our firm.
[00:32:51] Matt Sonnen: Fantastic. Well, Julie, how have you handled career development at FirstWave?
[00:32:56] Julie Allen: We have, again, another great story to tell about career development and great track record of promoting from within and it starts with PSA as a pivotal role within the organization. They support our wealth coaches, which are advisors and really support the client foundational relationship, and they are forward-facing with all of our clients. It is an opportunity for a lifetime career in and of itself, but it has been a launching point for many of our teammates to advance their career. The classic example starts with Laura Cheeseman, who's the owner of the firm.
She joined the firm as a CSA in 2001, was promoted to an associate advisor, and then ultimately to an advisor, which gave her the opportunity to become the owner of the firm. Our VP of client services, who is my counterpart in the COO role, he started again as the CSA. She became the client services manager and is now promoted to the VP of client services, and she's a part of the senior executive team and leadership team of the firm.
We have a financial planner that started the CSA. We have a trader that started as a college intern and got promoted up through operations associate to trader, one of our great advisors, wealth coaches, started as a portfolio manager and then later became a trader and is now part of the senior leadership team, as an advisor.
We just go in and concentrate very well on opportunities for learning. They work hard to be the best that they could be in that role and make themselves valued at the firm. Those are the people we look for. We treat them well, reward them, they work hard as a result, we're always looking internally for promotion opportunities.
We blend both professional development with personal and work with everyone to help to discover their unique ability, which again, is a Strategic Coach Program. We currently have six of our team members going through the unique ability training, which is led by our VP of Client Services, Leslie Carleton.
It's about a year-long process. The goal is for all of us to ultimately spend 80% of our time working in our unique and excellent abilities, which drive high performance and job satisfaction. We have found that this training also carries over very well into our team's personal life to help create that balance that we all seek within our lives. We've got a great track record and then a wonderful experience for me personally and to feel the support of the team and of Laura and her commitment to my personal growth as well.
[00:35:45] Matt Sonnen: Yes. I love, like you said, that track record, having the proof is in the pudding and to show people when they're joining the firm that if you keep your head down [laughs] and you work hard and you show value, et cetera, et cetera, the road map is there at the firm. You can see where you can progress and the sky's the limit. I love it.
[00:36:08] Julie Allen: Yes. There's even a couple other examples is that we have a receptionist, we call that position the director first impressions. One who started in that role, over 10 years ago, is now the Client Service project coordinator. We even had a temporary receptionist that joined us and is now an operations associate.
We take it seriously and is putting the time and effort into that professional development that guide people and endear them very much to the firm and want to continue to work in an entrepreneurial environment.
[00:36:45] Matt Sonnen: We've tackled the HR side of your jobs. Now let's talk about tech. Julie, I'm going to go to you first on this one. How have you evaluated what tools and vendors will make up your tech stack at FirstWave?
[00:36:59] Julie Allen: We are a big fan of bringing in an expert to help guide us through our decision-making processes that comes through the tech side of the world and currently our tech stack consists of the Orion Platform, with Eclipse for planning, and Basis Code for compliance. We use Moneytree for financial planning. Last year we started with Holistiplan for tax planning. We now have a very outdated CRM with Junxure Desktop that we have now retained, or RIA Oasis to guide us in that collection process and implementation for our new CRM. We start that in January. You interviewed Kristen with RIA Oasis in the COO society. That was really exciting that we're working with Kristen.
[00:37:47] Matt Sonnen: That's exactly right. I think she's fantastic when it comes to CRM and workflows and so yes. When we did our CRM course she was the first person I thought of to interview to just talk through high-level ways to address and approach building out workflows in CRM. She's really great.
[00:38:04] Julie Allen: We're excited for the process. It's a daunting task, and to think about doing it alone is more than I could bear. Reaching out and finding an expert, that's what they do for a living provides great confidence for the entire team that we will be successful to be able to transition off Junxure Desktop when it sunsets on June 30th, 2023.
[00:38:29] Matt Sonnen: Perfect. Chris, I know you've been evaluating a few different vendors. Talk to us about the process that you've gone through.
[00:38:36] Chris Pelch: Yes, and I just love what Julie said, like we talk about it tier two, it's kind this who not how mentality and quite frankly on the tech stack probably need to lean into that a little bit more. I appreciated that response, Julie.
For us, when I think about the tech stack and which vendors we want to work with, the most important word that comes to mind is just open. I'm constantly asking the question, is Vendor A open, accessible? Are they going to work with vendors X, Y, and Z? The reason that question's so important is because it gives me flexibility. The reality is that I need to make a decision about one software system today, but the change may have implications up and down the tech stack both today and in the future. I need to be thinking several steps ahead.
I'll give you an example of how this played out with the recent simple, I'll put an air quote around simple change that we made to our phone system. We had been using our old phone provider for close to a decade and decided for a few reasons to make a change, mainly we wanted a compliant texting option that wasn't really available the previous provider.
I went out and researched a bunch of other phone providers, but what I realized very quickly was that our options were limited to those that integrated with our archiving solutions since we were looking for text message capability. Now I'm not just evaluating the phone provider, I'm also evaluating the archiving tool, and do I want to continue to use this tool? Are the integrations that it has with the phone providers sufficient? Should I make changes to the archiving tool? What is it allowing me to do?
Then to, of course, add another layer of complexity because it's often what I find myself doing. I ask the question, how's this going to work with our CRM? I guess as a quick note to maybe piggyback again on Julie's comment, we are in love with our current CRM, it's fine, but we'll probably be making a change in the near future. Now I'm guessing at what CRM system we might use in the future and then trying to evaluate that as a part of our current phone system decision, which of course is a fool's errand.
I love this example because it's a seemingly benign change. Oh, just find a new phone provider but it has all these other ancillary considerations and it highlights very clearly how important it is to have vendors who view broad and deep integrations as a part of their value proposition to customers.
Today, as we're in the middle of evaluating our CRM system and whether we want to make a change, it's a much more involved decision than the phone system, but I find myself going through a lot of the same motions. What starts as an evaluation of our CRM becomes an evaluation of our custodian, our performance reporting software, our marketing systems and so much more. How are all these going to work together?
It continues to be the most important factor in all of this is the importance of our vendors to be willing and able to share data between other systems because it's going to give us so much more freedom and flexibility to evolve as our business does. That's really the core focus for me when it comes to the text act.
[00:42:01] Matt Sonnen: It's a fantastic real-world example. I always call it 3D chess, when you're choosing all the different vendors that you've got to think in three dimensions. We've talked about it a little bit here, I know we've talked about it in COO society, but I get the call all the time. A frustrated advisor says, "Just tell me the best CRM and I'll go buy it. Just cut to the chase. I don't have a lot of time or energy for this big analysis. Just tell me which trading tool's the best one I'll go get it." It's just not that easy.
I can't tell you which is the best trading tool on the market. It's which is the best trading tool for the rest of your tech stack or for how you're running models. That always sounds like consultants speak of trying to work my way into this really complicated engagement, but you laid it out perfectly. You can't just show me the-- You look at everything in isolation and say, "I just need the best client portal. I need the best reporting system," whatever. I love it.
We talked about hiring. Now we've talked about technology. Chris, I know you also handle compliance at your firm. My next question for you both is just how do you successfully juggle so many responsibilities and ensure that nothing is slipping through the cracks? Chris, I'll go to you first on that one.
[00:43:20] Chris Pelch: Like you said, it's a juggling act and it's definitely one I continue to struggle through. One important lesson that I've learned in my time on the job so far is the truth behind the cliche. When everything's important, nothing's important. I think that that's come to bear for me many times throughout my last two years.
I think it's very easy in this role to chase after shiny objects, you end up spreading yourself too thin and you're spread across too many different fronts and what I've found is that priorities are going to emerge and you can either decide to set them yourself or you can allow them to happen to you. I've oftentimes allowed them to happen to me, and sometimes things turn out for the best, but the chances are you're going to feel overwhelmed more often than not.
How have I tried to combat that? First I spent a lot of time on setting priorities, not just for myself, but for others on the team. For most people at our firm, there's more work on their plate than can get done in the day or the week and so a lot of times I'm spending my time in meetings with folks helping them to review their lists of projects and tasks that are open-ended, and helping them reestablish priority to set them on the right path.
I do the same for myself. I spend time on both a daily and a weekly basis. We talked about establishing habits. I have a daily and weekly habit where I evaluate and spend about, I evaluate where I'm spending my time and I make sure that I'm not neglecting the most important projects on my plate.
Then secondly, I try to delegate as much as possible. What I've found is that delegating responsibilities in a more systematic way is a lot easier for me than trying to delegate ad hoc items. When an email comes across my inbox and I need help with it shooting that off to someone else, I find that more challenging than trying to find a responsibility to assign to someone else so that there's clear expectations moving forward.
One example of that, you mentioned, Matt, and I'm also the CCO of the firm. We work with Advisor Assist as our third-party compliance consultants and we utilize their compliance task management software advisor, Cloud360. We formally identified members of our team as Delegate CCOs within that system, and that spreads the work across multiple people instead of all of that falling on my shoulders.
For instance, Tara on my team is responsible for reviewing our logs on a recurrent basis. Chanel on the team is responsible for advertising reviews and so on. Each team member's been trained on how to identify issues and how to fix them or how to escalate them to me as needed. I then set time on my schedule to spot-check the work, to address items that are awaiting review, and to problem-solve any issues that have been identified.
The beauty of that for me and why this makes it easier on myself is now on a go-forward basis, it's really clear who's responsible for what. I don't have to constantly feel like I'm asking for help or burdening my team with something at an inconvenient time. Instead, we've clearly identified a responsibility. We know who owns that responsibility and my job is now to support the team when they need help and to hold them accountable so that the expectations are being met.
[00:46:50] Matt Sonnen: Fantastic. Everything you said is spot on the delegation relying on other team members. I love it. Julie, what time management tips and tricks can you share with us?
[00:47:02] Julie Allen: I think beginning with delegating and Chris, you hit it right on, and delegating is the key in providing oversight and direction to team really does help to get the ball moving and everyone moving in the same direction. Sometimes, like you said, chasing the next shiny object and I think even a time last year where we said we're putting a moratorium on great new ideas. No more great ideas until we cross over this one threshold. I think that really helped a lot for the teams to know that they weren't going to be getting any additional new projects on their plate and by, understanding where everybody is functioning in their unique ability and what everybody's great at, and what they enjoy doing really makes delegating so much easier.
Something that I'm just not good at or just doesn't feed me will allow me to give it to somebody that is operating in their unique ability. They love doing it. They're better at it and they enjoy it and it's off my plate. That is a great opportunity when you really know the inner working of people's unique ability.
For me, and Chris, you talked about it in with your team, training is that living by my calendar and it's stressing in, and again, it's another strategic coach, philosophy is live and die by your calendar. We calendar our focus time and focus time is what doing the job that you were hired to do and what are the money-making activities that you get to do for the firm. Then also calendar, my buffer time which is getting the time spent and the work that needs to be done that only I can do and getting ready to drive the focus time.
Everybody's jobs are a little different and outlining what is, focused and buffer for different team members is an interesting process, and it's a really great way to best manage time and calendaring it and delegating to the right individual within the team to get things done. I am a firm believer that there really is no such thing as multitasking. That takes one thing at a time, it's okay to close your door, it's okay to focus on what really needs to be done, and turn off the email for a while to get done what needs to be done.
[00:49:39] Matt Sonnen: I was a big believer in multitasking early in my career and I've definitely, as the gray hairs have piled on over the years, I definitely have come to the realization that it is a fallacy. I love exactly what you said. You got to do one thing at a time.
I mentioned this is the last episode of 2022. With that, my final question for you both is what metrics are you focused on for 2023? Chris, I'll go to you first on this one.
[00:50:11] Chris Pelch: Sure. We implement ELS. I know you've had other guests on the podcast talk about that, but we have actually moved our annual strategic planning meeting to July because we found that taking a couple days out of the calendar right now is just unfeasible especially for our advisors. In the summer months are a lot easier for the team to take time away.
We went through this exercise back in July. We have several goals that we're working towards for this year, two growth-oriented goals. One is we have a percent revenue growth target, and we have a net new revenue dollar amount that we're targeting for the 12-month period.
We have a team-oriented goal focused around just team building. Our goal is to hold four events, one each quarter. Two of those are focused on social. Recently, we went to a mini golf go-kart place as a team, which was a tremendous amount of fun. Then two of those are focused on volunteer opportunities. We've done things like volunteer at local food pantry or there's an organization here that serves single mothers or at-risk families. We volunteered at one of their distribution centers for a day. That's one of the goals that we have is to keep a focus on the team building.
We're planning to open a new office in Newport in 2023, so there's some goals associated with that. We've recently rolled out a new business plan offering for our business owner clients called Simplify 365, and that's where a lot of our digital marketing efforts are focused.
We have some lead-generation goals there. We're planning to make a decision around a CRM. Once we've made that decision, there will certainly be some implementation measures, that we're going to then put in place around timelines and expectations for that migration. Then finally, we're building out career development paths for both advisors and for our operations team.
One of our goals is to have all these career paths clearly defined and rolled out to the teams to further enhance the communication with the team and to really cement expectations around what our team members can expect from their careers as they continue to put in time and effort and energy into their roles.
[00:52:30] Matt Sonnen: Great. Well, Julie, what initiatives are at the top of your list for next year?
[00:52:35] Julie Allen: From a KPI standpoint, we have been developing dashboards that center around employees, clients, financial goals, and around operations, and consisting of results indicators and leading indicators from results indicators revenue for clients, net new client, net new revenue, existing client net new revenue, all those things that will report that were a growing, thriving firm within the industry.
Then backing it down to the leading indicators that are predictive and that track how are we doing on activities that will move us in a positive direction. We take those even down to the daily level, such as how many business development actions do we need in a day? What are the number of contacts that we need for a new prospect that will lead to them becoming a client?
What are the number of prospects we have in the pipeline, a number of meetings for clients, and what's the time that it takes from prospect to client to help to reduce the time from prospect to client and in all aspects? Looking at all those different types of metrics and being very clear on what are the things that are going to help us keep our employees, help them to grow.
Chris, you mentioned, I love your career path development, and we're on the same path with that as well. Then, really looking at from a client standpoint and client satisfaction and toying with the idea, I did it in healthcare, but looking at a net promoter score, for clients. A lot of times scared to ask clients, what do they really think? It's the referability factor and the improve is in the pudding.
Are they referring clients? We've been driving down in the data to see how many of our clients have been referring, their friends family, and others to last the years and really looking at what are the trends within those clients and working to create more of them.
[00:54:51] Matt Sonnen: Well, I think both of you are in line with Schwab's Benchmarking study that a lot of the goals for next year are looking internal and making sure the employees are happy and you're hiring the right people. You have them in the right seat. I love it.
I just want to thank both of you for joining us today. I've told you both individually how I found you to be very thoughtful leaders of your organizations. I knew you'd have a lot of great ideas to share with us, and you definitely fulfilled that. Thank you, Julie and Chris, for being here today.
[00:55:20] Chris Pelch: Thanks, Matt. It was great. I appreciate you having me on.
[00:55:23] Julie Allen: Matt, I really appreciated the time. Thank you.
[00:55:27] Matt Sonnen: Thank you, Julie. That is a wrap on Episode 47. Happy holidays to everyone, and we will talk to you in the new year.
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[00:55:45] [END OF AUDIO]
