Ep 496: Lessons Learned From Building A $60B Advisory Enterprise with Shannon Eusey

Speaker A: Welcome to the Financial Advisor Success Podcast where you go behind the scenes with financial planner, speaker and consultant Michael Kitces to hear stories of how leading financial advisors navigated the inevitable challenges that arise on the path to success and get insight from leading industry consultants about how to break through to the next level in your advisory business. And now, here's your host, Michael Kitces.

Speaker B: Welcome everyone. Welcome to the 496th episode of of the Financial Advisor Success Podcast. My guest on today's podcast is Shannon Yousse. Shannon is the Chairman and co founder of Beacon Point Advisors, an RIA based in Newport Beach, California that oversees $62 billion in assets under management for 25,000 client households. What's unique about Shannon, though, is how she led beaconpoint throughout its path to becoming a large advisory enterprise. From starting out as an independent RIA to adding partner firms through acquisitions to bringing on capital partners to now transitioning out of the CEO role. In this episode we talk in depth about how Shannon started Beacon Point alongside her father with an eye towards eventually building a large advisory enterprise at a time when large RIAs were much less common how Shannon and her team decided to start adding partner firms to contribute to Beacon Point's growth and why her firm place's culture fit near the top of the list of criteria when evaluating potential partners and how Shannon decided that adding a private equity partner would both provide capital to support her firm's acquisitions and serve as a source of business building wisdom as her firm evolved over time. We also talk about how Shannon decided to centralize operations at Beacon Point with the goal of allowing local offices to focus on providing advice to clients how Shannon and Beacon Point develops content and partnerships to boost the firm's organic growth alongside assets brought in through acquisitions and why Shannon has met one on one with every new employee at the firm to better understand their journey to Beacon Point and to let them know she and the executive team care what employees think and be certain to listen to the end, where Shannon shares how she made the difficult decision to step out of the CEO role, though she will remain with the firm as Chairman and continue to work on priority projects How Shannon has led research into women and wealth that has revealed lessons for how the financial advice industry can better serve this group and how Shannon has found value by keeping a certain amount of white space on her calendar to ensure she has time to step back from day to day business and consider the big picture of her role as and the business as a whole. And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast with Shannon Yousse. Welcome, Shannon Yousse, to the Financial Advisor Success Podcast.

Speaker C: Thank you, Michael. Thank you for having me.

Speaker B: Um, I'm really excited to have you join us today and to get to talk about what I just think of as building a really, really big ria. Uh, because to me there's been this fascinating evolution. If I go back to the 1990s, most RIAs were solos with like $10 million of assets. That was a lot of money back then. Like a huge firm had $100 million. And then by the 2000s, there were actually a lot of firms that had 1 or 200 million, but a really big firm had a billion. And then the 2010s there were a lot of firms starting to reach a billion, but a really big one had 10 billion. Now we're in this decade where there are firms are tens of billions of dollars, a lot of whom are shooting for 100 billion by the end of the decade. And I'm, um, cognizant that at some point this isn't just a matter of adding clients and assets to get bigger. The organization itself, as it really becomes a sizable enterprise, just gets really big. It's really complex. Uh, 100 million team might have a three to five person team members. A billion dollar firm might have a dozen or fewer. A $10 billion firm might have one or 200. As you grow towards 100 billion, you're going to be pushing towards 1,000 team members, which to me is just. It's a whole other level of complexity of systems and process and HR and technology and infrastructure, like all the things it takes to keep that many people growing and rowing in the same direction. And so I know you've led this journey at your firm from founder Origin almost 25 years ago today being one of those firms with the many tens of billions under management. So, uh, just, I'm excited to talk about what it's really like to scale an enterprise that large that, I don't know, maybe the rest of us don't understand or can't fully appreciate until we hear it from someone like you who has been on that journey.

Speaker C: Yeah, it's been an exciting journey, that is for sure. And I don't think it's as scary as it sounds when you say it like, oh, gosh, there's billion dollar firms, $100 million firms, and US in between that. It's been a great journey and I think a very deliberate journey of, uh, building Beacon Point.

Speaker B: I love that you don't find it scary. I just, I don't know, my, like, gross overgeneralization. As I talk to advisors out there over the years, it's like there's two types of advisors out there. One group where you say, someday this firm could have a thousand team members. And they say, oh my gosh, that sounds horrific and terrifying. And the others where you say someday this firm could have a thousand team members are like, cool, let's go.

Speaker C: Right.

Speaker B: I feel like you're a little more in category two than category one.

Speaker C: We're nearly there. I think we have north of 800 team members today. So we are getting to that thousand mark. And again, you know, a bit, a bit deliberately, but I'm happy to share anything and everything and kind of how we got here.

Speaker B: And so I think as a starting point, just to help us get oriented, help us understand the advisory firm just what it is as it exists today. And then I want to go all the way back to the beginning and kind of replay forward how we got here, but help, uh, us make sure we understand where it is today.

Speaker C: Sure. Today I think it's easy to talk in, and maybe not easy for everybody, but easy for me to talk in terms of assets and offices and states. And Today we're roughly 62 billion in client assets. We have 90 offices across the country. We're in 25 states north of 25,000 clients and average client size north of $2.5 million. And what I said earlier is close to 800 team members.

Speaker B: And I find it interesting even that you metrics for you include things like how many offices, how many states, like what, what makes that an anchor metric for you?

Speaker C: Well, for I think the way I look at it and team members probably most important. Right. Because that's who is driving the business. And I should say actually clients first. And it's actually how we make every decision in this organization. Is this in the best interest of our clients? So knowing how many clients we have and how important the decisions are to those clients is a very important number of the organization. And then our team members who are really fueling and driving everything we do here for those clients. So making sure we know who those team members are is very important.

Speaker B: And so what's that like when you're then trying to coordinate that across 90 offices? I guess, I mean, just, I'm sure there's varying size locations that are bigger and smaller, but that's 90 locations, averaging nine people per location to get to 800. 800 team members.

Speaker C: Yeah. And I think you have to look at it a couple different ways. So um, first and foremost, culturally, do those office align with Beacon Point? They wouldn't join Beacon Point if we weren't culturally aligned. Knock on wood. We've never had a partnership unwind, which I think is really important. We do call them partnerships because we truly believe these are partners within our organization that are becoming part of Beacon Point. So each office is part of Beacon Point's firm wide culture, but they also have the autonomy within their office to continue to run their office on a day to day basis, which we think is also very important to the organization. That's not to say they're running different systems or different processes. They're all on the same system and processes. We actually call it one Beacon. But they do have the autonomy to continue to run their office in the best way they see fit in terms of how they're doing things on a day to day basis for their team and for their clients.

Speaker B: So. So, uh, I'm intrigued by this. So what's the, is there like a unit size of an office? I mean I sort of did the napkin math. 800 team divided by 90 offices is an average of about 9 people per. Is that really the actual structure? Any particular offices?

Speaker C: No, it's not.

Speaker B: There's a couple support or what does it look like?

Speaker C: It's not. It's all over the place. Right. I mean we have offices that have, you know, 30 plus team members. We have offices that have two team members. We have offices where we've been, you know, geographically dense in certain areas and they've all decided to come together as one office. So it's made that office much larger. We will continue to do that in areas where it makes sense, but we don't look to marry people off. So if we have, as an example, if we've got three offices or four offices in Denver, we're not going to say you guys all need to come together and be one office. Although there are a lot of efficiencies and scale to be had from that and we'll certainly share that and help them see that. But we want them to come together and say we want this to be our office together and we want them to jointly build that.

Speaker B: So then help me understand further what I guess like what's controlled at the office level versus centrally? I don't even have. Is there a home office? What's controlled at the distant office versus the home office? What happens in the distant office versus the home office? I'm assuming there's some things you centralize.

Speaker C: Yeah. And I think if you look back at the organization over the last 25 years. I would say that's one of the pivotal decisions we made is to centralize some of our operational services. Now much more has been centralized throughout the years. I mean, HR is centralized now. They're working with their teams on a day to day basis. But if there is anything as it relates to HR that's handled in one central office, the finance function is handled in, you know, in a central location. Our day to day back office operations for client, you know, money movement and opening new accounts and trading is centralized. But that's over the years we've continued to centralize things. But if you go back to when we started the organization in 2002 really with the idea that we were going to bring. My dad came from an institutional consulting background. So he had actually founded his own firm in the 80s when I was in high um, school working primarily with foundations and endowments. So his background was on the institutional side. My background had been on the private wealth side. He was actually 60 at the time. And I said, hey dad, I've got this great idea. What do you think? He's like, you're crazy. Um, I said, well, dad, either we do this together or I'm going to compete in your backyard. Ended up agreeing that it would be a good idea. And I look at today and I'm not, um, five years out from, you know, where he was making that decision. And I'm not sure I would have been able to make the same decision. He had a lot of, uh, courage, uh, and guts to be able to do that at age 60. But I think he saw what we saw. And what I saw when I wrote the business plan was that there was an opportunity to take what he had done on the institutional side and marry it with my experience as well as others who were joining Beacon Point, their experience on the private wealth side, and to be able to take what we had done for institutions in terms of investments and access and bring that to private wealth clients. So if you go back to the early days of Beacon Point, we were already building an infrastructure to be able to work with thousands of clients. Uh, and I think many firms start out with. And this is not Beacon Points. I think when we look at like, oh, you're at 60 billion and 800 employees. Did I envision that? No, absolutely not. I had, I. The firm is wildly larger than I ever thought it would be. But what we did envision was we're going to, we are going to build an ria. It wasn't an accidental entrepreneurship you know, we actually, we set out to build an RIA and to build it at scale. So when we started the organization while risky because we had to take on several employees to start and we had no clients. Like literally no clients and no revenue. So, uh, that was. We just had our own capital that we put into the business, which was a bit scary. And we had a credit line. But we knew in order to scale the business, we had to build the business from the start.

Speaker B: So when you're building this centralized operations trading structure, I'm just curious really practically how centralized this is. Like, are there no client service admin folks in local branches? Because it's all centralized and offices are solely advisors and associate advisors doing client facing things.

Speaker C: Well, that's the ultimate goal. Okay, that does not happen. Right? You partner with an organization and they have incredible talent on the operations side and they've got people that are servicing those clients. Gosh, I even look back to our organization. We started and we lifted folks out of my dad's prior firm. We heard from clients saying, well, if so and so on the operations side doesn't show up, uh, I'm not coming with you. So we know how valuable those team members are to the organization. So we always try to make sure that we're building a structure and an environment where clients are best served. So does that mean there's an operational person within that organization, uh, in a local office? Oftentimes the answer is yes. Are we still trying to push the majority of operational flows and processes through our central team? Yes, because we think we can do it more efficiently that way and then let those people that were running operational functions within an office elevate to be more client facing and client service oriented as opposed to processing paper or doing data entry or fill in the blank. And what we have done too, which I think is very important, is, uh, every firm that has joined our organization, we don't let people go. This is not a come join Beacon Point or we're going to partner with you and then we're going to call back part of your staff. That is not the idea. Because what we do know is when firms join Beacon Point, we give them a new growth trajectory for their organization. Not that they weren't growing, but we give them the ability to grow more. And so we know like this is not just a aum, um, acquisition or an Advisor acquisition. This is a talent acquisition. So we're getting the talent. And many times, and we see this across our organization, many times those folks join our central platform.

Speaker B: And so in that vein, like, if I'm understanding right, as you, I guess like grow and scale organically, those would tend to be hires that occur centrally as you scale the organization. But because a good bit of growth has come from mergers and bringing partner firms in, you don't want to alienate any of that talent that might have been locally. You don't want to alienate clients who really liked the talent that was local.

Speaker C: Yeah, because remember, clients first, right? I mean, so how are we serving those clients best? No, and I mean, you look at what many are saying today in our industry is, have been saying for the last decade, you know, this is a talent, a little bit of a talent game. We need to make sure we're getting the best and brightest talent. And gosh, we don't want to lose talent that could be better served doing, you know, maybe, maybe doing the same thing, maybe doing the same thing for the platform, but maybe elevating to do, uh, new things for the organization that ultimately better serves those clients.

Speaker B: And so over time then I guess it's very practically either great local people just keep doing their local thing. Great local people eventually retire and move on themselves and then you might replace more centrally and so it gets incrementally more centralized over time, or someone local decides to stay but wants to pursue a more client facing path and you say, great, how do we transition some of the ops things you did locally to the central so that you can do other cool things for them?

Speaker C: Yeah, and even better, right? I mean that's the best outcome. Somebody locally says, gosh, I want to service clients, how do I get in that position and how do we train that person up to get in that position and elevate them to do that? Because as you know, I'm sure you talk about it a lot, I've heard you talk about it a lot. Is succession is important. So making sure that we've got folks to be able to take on those client relationships as we have, you know, partners retiring or folks leaving the organization and so forth.

Speaker B: The more centralized side of this support, just sheerly curious, literally how it works. If I've got my client service team locally, I've got my person here, she works with me, we handle the clients that we've got of mine in this office location here. As I think of it, it's very assigned and direct, one to one or maybe one to two of admin support. Supporting like a named advisor with a named set of clients. Is that still what you do centrally or does it work differently once?

Speaker C: No, I Mean it's, it's, it's not as perfect as this. One to one, one to two. I mean it uh, ends up to be that way. But we have a queue right where we've got advisor, we've got, you know, operational team members servicing that queue for advisors.

Speaker B: Okay.

Speaker C: And then it's segmented based on, you know, particular client and kind of what we're doing for those clients so that we have expertise in those particular areas. So it's, it's, and it is, it's, it's as simple as, you know, you have this particular request for a client, it just hits the queue and it goes directly to the right person to you know, perform that and report back on what was actually done. And similar to, you know, trading, this is what needs to be done. It goes through the central queue. And again it's not perfect because a firm will come in and they will have a trader and they're used to doing their trading. So then we slowly move them. It's not like you come in and we turn the light switch off and all of a sudden you're now on this new system. Yes, you are on new systems and technology. But it's more of a gradual move

Speaker B: to get folks to functionally as the advisor, uh, I end out working with groups of people and departments with specialized roles. So I've got a new client coming in. There's probably a new accounts team. I need to do a trade for existing client. There's a trading team, a client needs a um, cash out disbursement request. There's a team that does that service.

Speaker C: It's easier on the advisor. Uh, that sounds maybe a little bit complex. It's really easy for the advisor because it just hits the queue. They don't necessarily need to know because

Speaker B: they're not assigning it to a person. They're just.

Speaker C: Yes, exactly right.

Speaker B: Opening a ticket and saying they need a thing done. And then a ticket comes back that says the thing was done for you.

Speaker C: And they, and the advisor is working with an associate wealth advisor as well who's helping with that system and process.

Speaker B: Okay, so at the local. And that would be a local person.

Speaker C: Correct.

Speaker B: Okay, so local and not always.

Speaker C: I mean like look, this is, I think this is the beauty of scale, right? You know, you have a situation and um, I'm making this up but say you, you have a particular office that has lost their associate wealth advisor and needs to rely on another office to, for some additional support that's so easily routed because we have processes and procedures. In place for every function within the organization. Or I uh, look at, we had, you know, hurricanes. Well, it's really easy to reroute all those calls to somebody else because we do things the same way. And if you go back to the original genesis of the organization, many firms have been advisor centric. And that's not to say we don't focus on our advisors. Absolutely. That's core to everything we do. But we want it to be where it didn't matter which advisor got the client relationship or who was working with that particular client. We wanted to be more institutionalized to the firm. So it wasn't. I would come in the office and prospective client would walk in the door and I wasn't competing with the person next to me. And I think that's one thing we were really intentional on is making sure that everybody that had equity in the organization had the same share cost of equity so that uh, all boats rise when the firm does well.

Speaker B: So what else are there other things that centralized for you? I'm hearing like HR finance all the day to day back office operations of I guess sort of like both accounts of money movement and trading and investments.

Speaker C: And we also have a central estate planning function. It's part of the platform. Um, our financial planning. While we have planners in local offices, all the training and everything that we're rolling out comes out centrally. Our marketing, our communications, all of that is central.

Speaker B: Okay, so. Well now I'm almost going the other direction.

Speaker C: So what's not central?

Speaker B: Yeah, what's not central? What's left besides, uh, I mean it's a belittling way like besides all the advisors working with, working with their clients across 90 offices, often with an associate wealth advisor who may.

Speaker C: That's the goal, right? That's, that's the goal is to have it advice within the offices and being able to support that advice at a central level. I think what I, what I've learned maybe over the last decade plus is, is having experts in various areas. Whether it's tax, estate, you know, uh, retirement planning, 529, you pick anything is having that dedicated resource to help at a central level has been really important to help our advisors scale. I mean our advice we're giving advisors, uh, I think the one thing that I've seen maybe even over the last five years is what we're putting on advisors today, like do everything, like literally everything. Like the things that we didn't think were really related to advice per se is now everything's related to financial advice. So I think we're continuing to ask our advisors to do more. So we're trying to say is how do we support those advisors and not give them more to do on a day to day basis that they've got to actually oversee and manage and take care of.

Speaker B: So in this world where even client meetings at least can be more virtual than ever, post Covid world where we all got really comfortable with Zoom, uh, I'm wondering when you figured out how to centralize so much else, do you think about the future of local in person offices differently in a more virtual world? Or is that like. No, that's not going away. We want to still have local presences everywhere, even though in theory we could meet with Zoom.

Speaker C: You know what? I don't have a strong opinion on that.

Speaker B: Okay.

Speaker C: And the reason I don't have a strong opinion. I mean, I can tell you, um, I have thoughts on it for sure, but I've seen, I mean, we've done partnerships over the last couple of years where they've been 100% remote. So where I would have said maybe five years ago or even three years ago, gosh, no, we did. We still need to have people in offices, you know, meeting with clients and seeing clients when, when we've. We partnered with, you know, a firm that had a billion dollars that was 100% remote, now they still have access, you know, to some remote offices that they can go into if they need to do a client meeting and such. But sure, uh, my opinion on that

Speaker B: co working office space is amazing these days of what you can get.

Speaker C: It is. But I do also believe, you know, we're in an industry and a business where you learn a lot from those around you. So I think we're missing out in some of those areas if we don't have a way for those offices and those people to connect and to learn and to be mentored by others. So it goes back to. I said it early on. It's being really deliberate about those things. I think if you're not deliberate about how do we maintain this culture, how do we maintain, you know, educating the next advisor, how do we, you know, you know, grow people? What does talent growth look like through the organization? I think if you're not thinking about what does that look like for us, I think that there will be a big miss down the road. So I think we're going to go to a world where there is more virtual, which I think we're already there, obviously. Um, but I'm in an office today that is fully staffed. I mean, there's 60 people in here. So I do think there's benefits to that. And I think what we're seeing, at least what I'm seeing from some of the younger talent that's coming in, they want to be in office, they want to see people, they want to learn

Speaker B: from people because they want the learning. Because.

Speaker C: Yeah, because they've missed out on so much learning in person.

Speaker B: So I'm struck by this. It feels like, uh, I mean, it feels like there's a little bit of a leaning towards in person, but not necessarily for the industry's traditional view, which is you need local offices everywhere because clients need the in person opportunities everywhere. It feels like the leaning for you is more that we want to maintain local presences because those are convening places for culture and talent development.

Speaker C: I think so, yeah. I think, I think that's absolutely fair. I think you, you know, in some cases, yes, it's great to have no place for clients to come and to be able to say, you know, I want to meet with somebody on the estate side and the tax side and to my advisor. So I think that's important. But I mean, look, in the age of zoom and teams and, you know, everything else out there, it's already happening in other ways. But I don't think you can get rid of again. I just think you have to be incredibly deliberate about making sure you're focused and thinking about culture. And one of the things I've done for forever and I'm still doing, which our HR team goes, you can't keep doing that. I'm like, well, I can't not keep doing it because I think it's so important to the organization. I meet with every new person that joins Beacon Point. That sounds crazy. It made. It is a little bit crazy. And I don't do it in a group setting. I do it 15 minutes at a time.

Speaker B: I, uh, was just going to ask, do you do this in groups? No.

Speaker C: No.

Speaker B: Okay.

Speaker C: I do it 15 minutes at a time. Because what you learn and it's not about, you know, um, what are they doing for Beacon Point. And here's our systems and processes and, you know, all that stuff. It's more about who are they as a person and what do they want at a Beacon Point? How can I help them get to where they want to be? Are there any connections I can help them make within the organization and then giving them a little bit about who we are at Beacon Point and what's important to Beacon Point and obviously culture being at the top of that and maintaining the entrepreneurial spirit. You know, we, uh, obviously integrating 80, 90 firms in the organization, we don't have all the answers. So making sure that we're giving folks a path to question or to break a process and rebuild it, I think is really important to the firm and for the success and continued growth of the organization.

Speaker B: So can you talk a little bit more there? Just 15 minutes. It's both a lot of time when you're doing across every person and a limited amount of time to strike up a conversation with a new team member. So what are the things you're trying to convey or that you're trying to learn about? I'm going to assume you've got a series of questions or things that you cover, since you've done that meeting many times.

Speaker C: You would think I was that scripted, but I'm not. Yeah, well, it's literally different from everybody, for everybody. But I always ask, I always want to know about their story. You know, how did they get to Beacon Point? Now, what do they do outside of Beacon Point? What are they passionate about? And what are they passionate about at Beacon Point? You know, and how can I help them succeed at Beacon Point? And I think part of it, Michael, is just, you know, our business is about relationships. So how do you. How do you build relationships? Well, you can't build relationships by, you know, me talking to, you know, 800 people at one time. We do that too. We do town halls and such. But I think you have to build those individual relationships because it's about trust, and people aren't going to trust you if they don't know you. If I can make those connections and help somebody outside of work, inside of work, make a connection, and I hear it all the time. I'm, um, passionate about X or Y or whatever. And how do we connect them with somebody else in the organization that's also passionate about that or. I really want to move to this particular location. Hey, can I help you make that connection to the person that's running that particular office? Would that be helpful to you? So they're literally. They're all over the place. But I have heard on, um, on some of these calls, somebody who was, you know, a operations person that said, gosh, I just got my master's in this particular thing in technology. And I was like, gosh, does our team know about that? And, like, no. And I said, well, let me connect you with our technology person. So then they've joined the technology team. Or I've seen it happen on research. And so I think there's a lot of things that happen in the background, but otherwise maybe wouldn't if we weren't making those connections.

Speaker B: So you've highlighted a few times here around there's like importance of culture when you're doing deals, figuring out who's culturally aligned. So I'd love to hear more. Uh, what is the beacon point Culture? How do you define that culture? Are there words? Is there a framework?

Speaker C: Yeah, I think it's, you know, I think the biggest thing, first of all, when firms join us, it's, are they looking to build something bigger than what they've already built? Is it their way or the highway? Is it that, like, I've done it this way, I can't change the way I'm doing things? Or are they saying, hey, look, there's maybe there's a different or better mousetrap that I can join to help me accelerate growth or learn more from others or, you know, make 1 plus 14 as opposed to 1 plus 1 2. So it's, it's, I think it's, it's maybe folks that have more of a growth mindset, um, for firms that are saying exactly what we're saying. And I don't think firms don't necessarily not say this in general. And I think everyone would say, gosh, that's a, we all believe that. But are they really putting clients first, then putting their team members second and then shareholders last? I don't even, we don't even talk about shareholders because I think if you can do those first two things right, your shareholders will do.

Speaker B: So how do you, I mean, how do you try to figure that out? Right? I mean, I, no, nobody says, well, do I don't put my share, I don't put my clients first. But you're trying to, you know, diligence potential partners. So like, what do you look at? How do you try to figure out who's really doing it?

Speaker C: Yeah, I think you can see it in service models, right? How are they servicing their clients, you know, and are they doing in depth financial planning? Because I think if you're doing that and you're doing it, you know, the way that we believe it should be done. I think you, you learn a lot through, through that particular process of, of how they're actually what they've built around their clients. You know, how many, how, how many clients are they, they each serving? You know, the things that tell you like they are, they're servicing their clients well. But we also can, you know, I think you can see too like where firms come in and go, oh, my gosh, I can't do all these things. This is why I'm here to talk to Beacon Point, you know, And I think that's a realization that, you know, assuming that it's the right culture and culture, I mean, I mean, it's like. It's like anything. It's really hard to. It's really hard to define. I mean, you can define what your culture is as an organization, but it's hard to define. Somebody walks in, are they going to be a good culture fit to our organization? I mean, it takes time. It takes really getting to know that organization. It takes that organization getting to know our team. We put these firms, you know, they meet with almost all of our executive leadership team. And I think, you know, and we've turned firms away that somebody. It, uh, doesn't. It doesn't have to be more than one person. Somebody on the executive leadership team says, gosh, this isn't a great fit for me. I don't. I just. Something doesn't feel right here because a lot of it is like a, you know, my, My gut tells me this isn't the right partnership for us. And we as an organization have to look at that because it's not about, you know, aum, um, or profit or, you know, it's about, can we. Because, you know, you've seen this in business is, you know, if you don't have the right partnership, it can suck the life out of an organization. So we just want to make sure that we're. We're being really deliberate about, you know, uh, our first three screens are no jerks. No jerks. No jerks. And I mean, we use this in recruiting, partnerships, acquisitions, you know, succession planning. We. It's kind of. It flows through everything we do. And we want to make sure that everybody knows that here. So as we look to hire more people, that's a theme that we see across the organization.

Speaker B: So what. What constitutes a jerk? And how do you know when you found one?

Speaker C: You avoid, gosh, somebody that doesn't listen, somebody that thinks that they've built the best mousetrap and don't have any capacity to learn from others. Humility. I think there's a lot of things. Integrity, obviously. I mean, that's a non starter if we don't think they've got integrity. Um, we actually hire a lot of athletes across the organization. Um, do they play well with others? Can you get on a team and help build as a team? It's interesting because I think, uh, we always knew culture was really important to the organization, but I think culture compounds just like capital. So you got to continue to build on that culture year after year after year. And it's not just talking about it, it's action continuing to do the right things. We did it. We do a partners meeting and advisor summit meeting and we had advisors, um, say, what's the best thing about Beacon Point? And to a person it was either culture or people. And I do think it's across the organization. That's what we've intentionally done is can somebody step in and services client that's in Boston from our LA office, You know, are they willing to get in there and do that? And we have it across the organization. You know, somebody has a particular client situation that they need help with, that somebody's got expertise in another office, uh, everyone's like, sure, how do I help? What can I do?

Speaker B: I'm struck that one of your factors on putting coins first is that, like, how many clients are they serving? So there's such thing as a firm that has too many clients per advisor that you're like, skeptical of them, I guess. Skeptical,

Speaker C: I would say opportunity for partnership. Right. So how do we help these organizations either scale to serve more clients or say, you know, what we need to help you with succession, or bringing in a junior advisor to support what you've already built so that you can actually turn around and actually grow that business. So I think it comes in, I mean, there's a bunch of different metrics we look at that we can, you know, that help us assess what's going on within that organization. And it's just like how a firm would assess buying anything. Do we want to purchase this organization based on the ebitda, the revenue growth, the how many advisors they have? Because we know at a certain point, you know, you can't service 300 advisors. It's not, I mean, 300 clients, it's not physically doable unless we help you put this. I mean, you might be able to do it if we've got the client segmented properly. We've got the, you know, ability to, um, you know, automatically service some of the needs of that client by pulling some stuff off of your plate.

Speaker B: So I'm intrigued. Like, what, what are the other metrics that you start to look to as you're, as you're trying to evaluate and understand a firm situation? Because I feel like these are probably just good, good practice management metrics for anybody to reflect on in their.

Speaker C: Oh, gosh, we look at, we look at it. I mean you can imagine we look at, there's probably 100 different metrics. Um, you know, we look at net flows, we look at organic growth. You know, we look at revenue per advisor, revenue per employee, we look at sort of. I think these are all relatively common metrics that firms like ours look at for organizations.

Speaker B: Are, are there particular. I'm struck by metrics like, I mean just organic growth, revenue per advisor, revenue per employee. Like what are good numbers to you? I mean like what do you look at and say there, that looks really good. Or what do you look at and say? Oh yeah.

Speaker C: I mean look on the organic growth side. I can tell you what we at Beacon Point think is good.

Speaker B: Yeah, yeah, yeah. From your perspective, everyone's got their own view.

Speaker C: Well, I mean, yeah, great. Because I do sit in the study group with people that everyone's organic growth is all over the place. But uh, you know, we're looking. And this is not to say when we make an acquisition, firms are here because that's generally not the case. So we're trying to help unlock uh, some of that growth so we're able to see some things within an organization and help them create a blueprint for success. Right. Because we, we now basically have our own, you know, industry benchmarking study based on, based on all the firms at, at Beacon Point. So we can see, you know, here, that here are the top growers in the organization. You know, how do we get to that, that particular number? And I would say high, single digit, low double digit growth is really good. I mean now that's probably top 1% in the industry.

Speaker B: That's revenue growth, client growth flows.

Speaker C: Organic growth. Organic, yeah.

Speaker B: So FLO flows.

Speaker C: Net new assets.

Speaker B: Net new assets. So no market in there.

Speaker C: That's correct.

Speaker B: Okay.

Speaker C: And that's. That, that is not easy to do. Right. I mean that's a hard, those are hard numbers to hit. But it, but I think if you can help folks, and this is why I said you asked earlier about the, you know, is it just advice in an office? Well, that ultimately that's the best thing we can do is have just advice in an office so that those offices can grow and everything else is taken off their plate so that they can actually service and grow those advisory clients.

Speaker B: So as you try to bring all of this together, how do you think about growth like at your level in a world of organic growth from various channels, doing, doing mergers with partners? I mean, I'm just cognizant the, I call it the tyranny of the Denominator, you know, growth rates get a little rough as the denominator gets big. Your denominator is 60 billion plus. So like, oh yeah, we need to build a, uh, we need to build a six plus billion dollar new firm every year just to keep a double digit growth rate.

Speaker C: That's, I think that's true. I do think that, I think there's a little bit of truth to that. Right. I think you have, you have to be able to continue to grow as an organization for a whole host of reasons. Right? I mean how are you going to attract the best talent, how are you going to invest in the best systems? How are you going to best serve those clients if you're not keeping up and growing as an organization? So I do think there's a lot of truth in that. Um, and so we are aiming at those high single digits, low double digit growth. But I think there's a lot of ways to do that. I think you look at making sure that we're servicing clients in every possible way we can service them. Do we have their retirement plan assets? Uh, are we looking at all those pieces that we can bring on to make sure it actually helps us better serve that client anyway. But are we looking at all those different pieces to be able to better serve that client? And are we attracting new clients in different ways? One of the things that we haven't talked about, but I think is also really important is how are we unleashing um, organic growth opportunities for our advisors, Whether that's through some of our referral partnerships or creating new referral opportunities, whether it's a CPA network group that we're working on or whether it's, you know, through some um, of our women's initiatives, making sure that we're seen as a firm that can help all these clients I think is really important or you know, or we're serving the ultra high net worth market in certain family office type clients in certain offices and being able to have those services I think is very important.

Speaker B: And so in your world where you highlighted a lot of other central. And how do you think about centralization of marketing versus at least as I think of it like a, a uh, more decentralized, one advisor at a time in their, in their local market or pursuing their own strategies.

Speaker C: So I think it's centralized, decentralized. Can I say that? Okay, um, sure.

Speaker B: But then you got to then build that layer for us a little.

Speaker C: Um, because I think, I think it is a lot of that. Right? I think a lot of growth comes from Being in a local market and being very involved in that local market and being seen as a leader in that local market and having we talked about a little bit about geographic density in that market and being known in that market, which creates some brand in that market, um, very important I believe. But I also believe that firms that are successful with a great, you know, strategy on their zeo, on their website, or are doing great central centralized marketing efforts or are building out, um, and you know, we're in the process of building out a better digital platform for acquiring assets, you know, or how do we better serve women as we're seeing this significant wealth transfer to women, I think making sure that, that centrally we're focused there so that we can actually give our local offices the ability to accelerate organic growth through those different areas.

Speaker B: So what's at the platform level? Like what do you do or build for them that actually you can do centrally and put out to them?

Speaker C: Well, so, uh, we have a uh, 365 day content calendar. That's not to say we're sending out content every day, but we have content that is directly sent to clients, depending upon obviously the segmentation of that client, depending upon what we're actually sending out specific to each client coming from our central team. We also do, if you go into my LinkedIn, it looks like that's all I do. I've never once posted anything on LinkedIn. Okay, so that is a central function of our um, marketing team. That is, that is centrally posting for our advisors. Okay, so just a lot of the thought leadership is coming um, centrally, um, from our team.

Speaker B: Okay, so now take me, I guess it's all the way back down to the, the origin, the start. I mean you said like you had a vision, there was an original business plan. So what was the original business plan vision? Like what was this supposed to be when you're getting underway 25 years ago,

Speaker C: I will say 25 years ago, vision shows up long before validation. So we were not validated very early in the organization because you know, we, we thought, and it took us a while to get there, um, we thought we could do things a little bit differently. And I think the market said, hey, we are looking for something a little bit different. The idea of having no product, the idea of having no broker, dealer, the idea of building your investments off an institutional platform. It's interesting, 20 years later we were starting to see that everybody had to have alternatives. Well, that's something that we did very early on because we were working with the large institutional client who demanded that. So I think some of the things that we built early on, maybe a little bit of luck, but also something that clients ultimately wanted from the organization. And they didn't want product. They wanted pure advice. That was the business plan. And I will say I got to be on that business plan. Um, but that's okay because that skeptic.

Speaker B: Because this was like a B. School. Business school business plan.

Speaker C: Yes, everybody gets a B. No, I mean, people that do well actually get an A. But, uh, my professor did not believe that. You know, he was very skeptical about the plan. But that skepticism became a little bit of our fuel. Right? I might.

Speaker B: Oh, well, he said, I can't do it. So now clearly I need to do it right?

Speaker C: So, you know, I mean, look, we. We were fortunate early on, um, in the organization where we were in very early on, we were, uh, approached by Schwab to be part of the referral program. We actually turned them away because we were like, no, we're going upstream. And then we quickly realized, wait a second. This would be an amazing partnership for the organization based on location and based on what they're actually referring to, you know, to firms like ours. And then we were subsequently approached by TD Ameritrade and Fidelity to be part of their programs. And I think that was just a differentiator. Not many firms had all three referral platforms. Um, so which was. Which was good for. For the business and I think to structurally start the organization. You know, I heard somebody say, um, recently, you know, you don't build a church for Sunday, you build a church for Easter. I was like, oh, that's a really good point. Because we, you know, we looked at our organization. We weren't building a firm to be a billion dollars. Like, we were trying to build a firm that had scale that we would be able to grow into the organization. And I think if we would have. Knowing what we. I'm glad that was our thought. Uh, because I think it's really hard for organizations to say, I'm at 100 million. You look and go, how am m I ever going to get to a billion dollars? But if that's your original thought, is that, yeah, of course we're going to be a multi billion dollar firm and we're going to kind of tackle it day by day and client by client to get there. I think it's maybe a little bit of a different mindset. And I think having that structure right out of the gates and having the separation, which many firms don't do coming out of the gates, but Having a separation of people who are focused on running the business and advisors or research folks or whatever the other functions are in the organization, I think it often gets blended into the same person. And I think that's really hard because it's really hard to see what's coming around that corner or where should we maybe be investing, you know, easy in 2008 to say, you know what, let's cut spending, let's do this, let's do that, as opposed to, wait, is this an opportunity? Where can we lean in? Where can we invest? And I think we were fortunate during that time and we leaned in, we said, this is an opportunity. And I think there's going to be a lot of opportunity coming out of this. Obviously we looked at the finances of the firm and said what should, uh, we or should not be doing based on this market environment. But for us to lean in and say there's opportunity coming out of this, can we potentially partner with other firms? Because we have built the infrastructure and uh, that's what came out of our, you know, starting to do acquisitions.

Speaker B: So can you share a little bit more about separation of people running the business from advisors and other functions? I get why we do that at a certain point, as the firm gets, at least by industry standards, fairly sizable because it just gets so large that you can't manage the things while you're also an advisor doing the client things. And so roles tend to specialize. But I find for a lot of firms, that might not come until a billion or 2 billion of assets. Is that when the separation came for you all, or were you trying to do this or even.

Speaker C: No, we're trying to do it. Really coming out of the gates to say, you know, uh, I'm not an advisor. I mean, I have worked with clients over the years, but that is not what I do on a day to day basis. What I've historically done on a day to day basis is run this business, think about strategy, work with, you know, the other executive leaders here to put forth a strategy and, you know, growth options and think about, you know, M and A and think about some of these other things in the organization as opposed to I'm working with 100 clients and doing this part time because I think that's when it gets really hard. You know, which hat are you putting on today? Are you going to be the cfo? Are you going to be the cto? Are you going to be, you know, head of hr? So I think being able to separate that from advisors early on was really important for the organization.

Speaker B: So how does that manage just financially for the business? I mean there's, there's only so much dollars to hand around. Traditionally in firms early on, most of the dollars coming in goes back to the advisors to service the clients they've got as they get going. It's not the biggest pie to split to a full time professional manager.

Speaker C: No. So we didn't take compensation for ah, uh, for at least a year. I mean I have my first paychecks that sit under my desk. You know, it was, one was like a dollar and one was like, you know, 79 cents. Yeah, we just said we've got to, we got to put money back into this business so that we can actually see the inflection points of the organization to actually grow through this. And it was it easy? No, it wasn't easy. And uh, you talk about like behind the scenes, what was going on? Like what did that look like? I mean it was hard. It was really hard. I sold my house and put that money into the business and I was actually pregnant when I started the business. We started the business in March of 2002. I had my son in January of 2002. So you know, we're doing SEC filings, figuring out everything as I was, you know, eight months pregnant. But failure wasn't an option, right?

Speaker B: Not after you sold your house with a newborn.

Speaker C: My house with two. I had a two year old and a newborn and my husband was staying at home with the kids. So it just, it wasn't an option. This was, this was like we are, we are all in and what do we need to do? And it was, I mean, you know how this goes. You know, as an entrepreneur, it's 247 and I would say for the first 20 years, maybe longer. Uh, there was not one day, not one day that I didn't check email, not one day that I didn't check in. You know, so it's, it was. But I love it. Right. I mean I think that's the other thing is I've loved what I've done for this many years that I was willing to pour that in and raise my kids. You know, my kids are as old as Beacon Point, which is, it's fun because I've raised my kids alongside the organization. I mean it wasn't always fun. To be clear, there were a lot of hard moments, but um, I wouldn't change it for anything.

Speaker B: So how long did it take before you actually could get paid from this thing you were trying to make?

Speaker C: Um, it took us, ah, about A year. Um, the fortunate thing we had, uh, was my dad had worked with institutional clients and I had worked with private clients. And Matt Cooper, who joined us early on actually before we opened the doors, um, also had experience on the private wealth side. So the, Our ability to be able to bring in private wealth clients early on to the organization was very important. And, and to bring in my dad's institutional clients, we were able to bring over as well.

Speaker B: So how much business came over in that first year to, like, seed the survival?

Speaker C: Um, you know, I don't know the exact aum. I should know that I could back and look at that. The exact aum, um, numbers. But I mean, we had to bring over, you know, a billion and change. But it was, it wasn't all private wealth money. You know, we had a lot of institutional money, which, as you know, the fees on those were very low. Yeah, we tightened our belts. I mean, we bootstrapped the business and we tightened our belts personally and just said, we're going to make this thing succeed. And we invested in people. Look, we had, I think, eight people to start right around there. So we had a credit line that we were using and, you know, house that we sold that, uh, was capital for some of that. So. And my dad, M. Put in capital as well. So it just, it's. We just made it work.

Speaker B: So then as the growth journey continued, it sounds like there was a turning point for you in and through the financial crisis when, if I heard right, like that, that's when interest in M and A and like, taking on, um, partner firms began. Um, yeah.

Speaker C: So I think we saw in 2008 that, gosh, this is an opportunity. You know, will we see folks leaving wirehouses? Will there be an opportunity for folks to just kind of bolt onto our platform? Should we be a tamp? Should we, like, offer these services? But then we thought, gosh, that's maybe not the best idea. Like, we should have firms join the organization and partner with the organization. We put it in a drawer for a couple years. Um, and then Matt and I were both actually, I was leaving the TD Ameritrade, um, advisory board. Matt was going on, and we were at, um, the same event. And it was like the lights, the light just clicked. We were like, oh, my gosh, look at how many RAs are being, you know, are coming to market day after day, year after year, and they're stalled out on growth because they're wearing every single hat within the organization. What if we went to market and said, we're, we'll Partner with you. And by the way, we didn't have capital. We had no. It was just. You can have. We're going to set up another ria. We still have the Beacon Point Ria and we're going to set up this Beacon Point Wealth Advisors RIA and we're going to start making acquisitions and we own part of it. And you guys, based on your earnings, you own m part of it. And then we just started making acquisitions. And I think people, what we originally thought is, gosh, this is going to be succession for people. People are looking for a place to go and a place to potentially retire. But what we found is we were attracting people that were growers that wanted to continue to grow but had stalled out on growth because they were doing too many things within their organization.

Speaker B: So I'm intrigued that you did this with a separate sister RIA and not doing the deals into, into Beacon Point directly. Like why, why the separate second entity layer?

Speaker C: Because you can imagine at the time, so this is our first acquisition. 2011 is, you know, Beacon Point was nine years old and we had grown it to upsize that it was worth a lot of money at that time. And we didn't want to dilute what we had built not knowing, you know, it was. We were taking a risk. Right. We didn't know. We didn't know. So we're, you know, like, let's try this, see if it works and if it works, we'll figure it out. Well, we, we, it did work. And, and we figured it out. And we didn't figure it out really well until 2020. I mean, we figured out that model very well and we figured out how to service those clients really well and how to integrate really well. But what we had to do in 20, uh, 20 was put those two organizations together because it worked well until it didn't work well. It worked really well. And like, yes, this thing is doing great and people are looking for, you know, an opportunity to join Beacon Point. But then we were in a, in a position where what do we invest in as an organization? Well, this group would like us to do this. This group would like us to do this. So then we, we ultimately combine the two organizations and um, have kind of been off to the races since.

Speaker B: So. Okay, so, so the challenge point eventually was, well, now we've got two entities we own that are both generating profits. We've got to decide what we're reinvesting where for growth and if it's two different organizations, we actually have to have the somewhat awkward conversation Are we investing into the. I don't know what you call, like, the. The core Beacon Point business or the wealth advisors business? And that's a awkward split to have to allocate when the ownership cap tables are not the same between the two.

Speaker C: Correct. Correct. You nailed it. That's exactly right. So in which we did, and we figured it out, and it's been great. And I think, you know, you look at, like, the firms that joined us, I think they also looked at Beacon Point and said, gosh, you're a firm that understands what it's like to be zero. Zero revenues going to. Or, you know, zero aum. Um, going to, you know, 100 million aum, going to a billion going to 2, 3, 4, 5. Like, you know, what those inflection points feel like, look like. Like, you can help us as we think through, you know, building the organization that we started. So, like, we were that RIA that started making acquisitions of RAs, as opposed to. We didn't start the business saying, we're going to partner with other RAs. We started with, like, hey, we're going to be a really great ra, doing really great work for our clients. And then the other nice thing that did for us is it allowed us to have this test kitchen. Like, if somebody had an idea or wanted to change up a process or do something different within the organization, we could test it with our original group in the RAA that I'm sitting in today, or, uh, the office I'm sitting in today.

Speaker B: Now, I know at some point along the journey, you also got involved in the outside investor world. So when did that come into the picture? Um, and why.

Speaker C: Yeah, it coincided with bringing the two firms together. So that happened in 2020. And we just. Look, we recognized that if we wanted to continue to compete and do acquisitions, we needed capital because, uh, that worked. It worked for a while until it didn't work. And I think that's a little bit of the. This story, you know, our story, um, along the way, it's being able to. And I think this is, you know, a little bit goes back to. We talked about the. You know, what's important when I talk to new team members, it's having that entrepreneurial mindset, because not everything's perfect. And it wasn't this, you know, Beacon Point went from, you know, zero to 60 billion. And what. What a success story. I mean, it's there. There was a lot of pivots along the way that, like, yeah, let's try this, see if it works. If it doesn't work, Then, you know, great, we're going to move to the next thing. It wasn't. We didn't, we didn't ruminate. We didn't, like, we didn't worry about those decisions. We just kind of moved on. I mean, it's. And I, and I think, you know, me having been a former college athlete and a lot, having a lot of athletes here, it's. It's what we practice for. It's, you know, we would lose. If you lose, that's great. You had to get up the next morning and go, okay, well, what do I need to do? And what do I need to put in place to win? And I think that's been a lot of the mindset of the firm, um, for the last 25 years.

Speaker B: So what changed that? You had this path of doing mergers through the 2010s, and then as you got to the 2020s, felt you needed outside capital partner to, I think, more,

Speaker C: more competition, more demand from, you know, the folks that had built RAs that were looking to get some capital off the table. I think there were just, you know, people were looking to diversify their assets, which understandably. Right. With the average age of the advisor continuing to rise, I think it was just something that, you know, it was just a market force that said, we need some more capital in this.

Speaker B: Early on, you thought you were going to get retiring advisors, but you got a lot of, like, overwhelmed growers.

Speaker C: We did. We did. And the funny thing is, we still didn't get retiring advisors. I mean, a few advisors have retired through the years, but we still, even after the capital. But I think people were getting older and they obviously wanted to do some financial planning and estate planning. And, um, I think we were just getting people a different life cycle. And we're still attracting younger advisors as well. But I think capital is now just

Speaker B: part of the equation because the wealth advisor deals were often like stock for stock deals. Roll your stock in and get a piece of the aggregated pie.

Speaker C: That's what ours was. Yes, but that's not what the market was doing,

Speaker B: because by 2020, multiples are getting a little higher, advisors are getting older. And at the least they're saying, like, I want to cash out a portion of this, if not most of it. And then you just need cashy cash at that point. You need cash at closing, 100%.

Speaker C: And we saw it. Right. I mean, we were able to significantly grow the business from 2020 to the end of the beginning of 2020. And then we, um, partnered with KKR effectively January of 2022.

Speaker B: Yeah. What brought KKR to the table when you were just uh, like two years into the prior partner Experience and

Speaker C: the ability to show and share and give us the knowledge that we didn't have of what does that engine look like? Not even for the RA space, although they had experience in the RA space actually quite a bit. But what are other industries doing? Can you help us with this expertise on thinking through what we should be looking at? What are our blind spots? It's funny, we say that we want a partnership with all of our offices that we partner with, which is 100% accurate. We want a partnership with our private equity firm.

Speaker B: So can you share a little bit more of what expertise is it your size and scope and you're what you're 10 or $20 billion at this point? What expertise do you seek at that size and stage that it's compelling when the right PE firm brings it to

Speaker C: the market honestly, it's like what expertise don't they have? They have. Because they've seen so many transactions through the years and so many different businesses. Like we could say, I mean pick anything. We could say. What does it look like to have a very effective digital marketing campaign? What does it look like to increase fees across the organization? What can we implement? Or uh, what are the things we can do? Can you do the research? What are our competitors doing in the marketplace? Do that competitive analysis. Are we missing any service offerings? There's just so many different analytical things that they're not necessarily coming up with the ideas. Like that's us. Like who, you know, kind of seen boots on the ground, what's going on in the business, but more, hey, we're thinking about this. What do you think? What have you seen? Or we've gone down this path. Have you seen anything different? So it's just a, it's like having an outside. I m mean, which they are as well, but it's like having an outside board of directors that's really looking at, through a different, a little bit of a different lens. We're in and on a day to day basis. So having the ability to say, to critically say, like have you guys thought about this? Have you. This is strategically, we've seen other firms do this or I mean even like as we're looking at new systems and different technologies, you know, not necessarily related to planning or advice, but what is the best CRM system out there? Have you been able to negotiate better rates than we've been able to negotiate or just the uh, all the things that go around running a complex business they've been very helpful with.

Speaker B: And so how do you pick amongst PE firms? I'm sure everyone says they're wonderful and brilliant and have all this expertise.

Speaker C: Yeah, that's a good question. Um, so a couple things that were really important to us. Uh, same equity. So I wanted their equity to be the same as ours because I didn't want to get in a boardroom and go, well, they've got a preferential treatment on the equity. They may think about things a little bit differently than we're thinking about it.

Speaker B: I was gonna say no preferred shares, no pref liquidity, none of that stuff like good old common.

Speaker C: Yeah, and that's not, by the way, common. Good old comma is not common. Um, but I think it's, it's. I think it changes maybe the conversation or maybe, you know, aligns the conversation, um, better, in my opinion. Now, I'm sure there's other ways of doing it that, that also work well, but in my opinion, that was, that was what Beacon Point needed at the time. The other thing that was really important to me personally was equity ownership across the organization. We have very broad, very broad based equity across the firm. I mean, we have several hundred equity holders in the organization. Uh, KKR also was one of the original founders of Ownership Works, which is the model that allows every employee to participate in equity ownership at a transaction. So a certain amount of equity is held to the side and they will be bonused out a certain amount, um, upon a transaction. Which, you know, my feeling is, and my feeling since day one has been since we founded the organization was, you know, equity ownership does drive value. And I, kkr, um, feels the same way.

Speaker B: Any, any other drivers for picking from what I'm sure was a long list,

Speaker C: a lot of suitors, we had a huge list. But those, those were the two big ones, aside from the partnership. Right. I mean, we wanted somebody who understood the space that could help us when we, you know, when we wanted to talk about, like, what does our technology look like? What have you guys seen? What does our, you know, the digital side look like? What, you know, all these pieces. We wanted somebody to be able to share their expertise. And they have an amazing group that. That's actually all they do. I mean, they basically have their own internal McKinsey team that, you know, you can just land them in your office and they can help you, you know, work through some of these things.

Speaker B: I mean, just mechanically, like, do you still have to hire them, like consultants? You still have to pay them or from the CE firm's end, it's like as long as it increases your capital growth, like we don't care.

Speaker C: We, it depends on what the project is. Um, okay, you may be hiring some of the team or they may help you find who's the best partner to bring on to help you with that particular area.

Speaker B: So then I've got to ask, like when you ran, um, almost 20 years on your own, like, what's different when there's now a, a financial sponsor at the table on the board?

Speaker C: Well, I think certainly capital, right. So having the capital to be able to continue to grow at the rates we're growing and have been continuing to grow, like, we wouldn't be able to do that. Like we just would not be able to do it if we didn't have the outside capital to do it. Um, so that is, I think that's the biggest piece. Um, and the other is having somebody else in the room. They're not in here running our business. They're additive to the business on a day to day basis. So it's not, you know, they're not saying, you know, here's how you should be doing this, here's how you should be serving clients. They're how can we lift Beacon Point? How can we help you guys as an organization? And we're, I mean we're calling them, we're saying, gosh, what have you seen? Have you, you know, here's what we're contemplating. They've been really good thought partners in the business.

Speaker B: Now I know part of this journey you had put your own announcement out, um, just like a few months ago, as of when we're recording this, of making your own transition after almost 25 years. So can you share a little bit about what's going on in your world now?

Speaker C: I'm still here. Um, yeah. So my goal through this transition and I think, look, I think for any organization I've been leading Beacon Point, I mean we have an incredible leadership team. So it's not even me leading. We've got an incredible team leading. But I think change is good. Change is good for organizations. It's really hard to do and I know and um, I'm in it right now. It's hard to do and it's hard to do for many leaders to step away from something that they created and they built. And I mean, like I said, I raised my children alongside Beacon Point. I mean, I feel like I raised Beacon Point and my kids at the same time. It's really hard to, you know, to Let those kids leave and, you know, leave the nest and do their thing. It's also hard to leave. And I'm not leaving. I'm still here, uh, doing some of the things that I want to focus on, but it's hard to make that transition. But I think ultimately for an organization, it's really healthy for the organization to change things up, especially after a 25 year run. I think having new perspective and new ideas and just maybe looking at things differently is really good. I'm still chair of the board, which I intend to do for the foreseeable future. I am really focused on leading and helping our women's initiative. Women are 51% of the population. I think we as an industry haven't done the best job of serving women. So I want to make sure that we're here to create the right resources and tools for women so that we can continue to serve that demographic. As we see a seismic shift in control to women and a seismic dollar amount going to women, we surveyed more than 10,000 women across the US and it wasn't under Beacon Point, it was under what we called her Worth. Um, to really understand, you know, how women are making financial decisions, you know, what, what creates confidence for women, what creates stress, you know, are women, you know, you know, currently underserved and then out of that survey and literally it's, we're not even, it's not even published yet. I mean, it's written and done, but we haven't even gone to market with it yet. Um, only 31% of women feel confident managing their finances. So we want to make sure that we change that confidence gap. I think it's just assert. It's not we. Beacon Point, although we, Beacon Point will do everything we can to help that. But we as an industry, how do we correct that? And so I think there's a lot of things that can be done around that that, you know, ultimately will get implemented from Beacon Point as well as other firms, um, to make sure that we're, you know, filling that confidence gap.

Speaker B: Were there other notable findings from the, the Hurworth survey?

Speaker C: Yeah, I mean, there's, you know, four in 10 women said they didn't have enough time for, to manage their money. Well, okay, that's a problem. You know, there's a lot of money being left in cash. You know, 63% said they had, you know, over $100,000 uninvested. I mean, you can you just imagine what this ultimately leads to? Right? I mean, uh, if we're sitting on uninvested cash and we want to retire. Well, we can't because we didn't, uh, just. And then we don't have time to do it. So it's. How do we, how do we close the gap in some of these things that I think are easy to close. Um, but we're at a, you know, it's just a, it's an interesting, um, it's, we're at an interesting time, you know, with more, more women being educated in college, more women in the workforce. We live longer than men. I mean, there's just a lot of demographic things that are saying, hey, we need to focus in this particular area. And I think a lot of people have said, oh yes, we're doing this thing for women, but I don't think it's been really well defined. And I think a lot of people have just, you know, sort of pink washed things. And I think that, uh, we've got to, we've got to really look at. And the reason we did the study is, look, we, we started our Women's Initiative in 2011 and at that time we heard from many saying this isn't a thing. And we're like, no, no, it's a thing. We're women. We're telling you it's a thing. And people were like, no, we don't. Women don't want something different. And I think clearly women do want something different. And clearly women haven't been involved in the conversation for the most part. So we just want to make sure that we're, again, we're closing that gap.

Speaker B: So where do you see the differences? The difference gap of what the industry isn't doing well there, that you feel like you're trying to solve for it with the Women's Initiative?

Speaker C: Yeah, I mean, I think education, okay, it's not a matter of aptitude. You know, it's just we have to figure out how do we build that confidence. Because there historically, and this is not everywhere, it's not every household, but historically there's been a division of labor in the household. So we need to make sure that we're helping women, you know, uh, figure out what those particular needs are. You know, in our survey, I think it was somewhere around. I, um, don't have it in front of me, but somewhere around 40% of women wanted help with retirement planning. Some around 40% wanted help with estate planning. Like, how do we, how do we get that knowledge to women? And you know, now we're stuck in a situation where now these women are, don't have the Time, they don't feel like they have the confidence, and now they're helping their aging parents. So we just. There's just all these forces at work that we want to make sure that we're. We're providing the right tools. And I'm not saying we have. I think we have a lot of them. I think, ah, still a lot needs to be created and ways of showing women what we can do for them is going to be really important in the future. And I think, a lot of, you know, the advisors that are listening to this podcast, I think it's a significant opportunity for growth. But doing the right thing, right, I mean, like, this is really important. Um, and I think we've got to make sure that we're on the front line helping women.

Speaker B: So coming back for a moment to this shift you made from CEO to the board. How do you decide when it's time?

Speaker C: Oh, gosh, I think that's really personal. Um, I think it's personal. I mean, I had been thinking about this for a couple years, and I think making sure that the firm is in a, uh, really I didn't like. This firm is doing incredibly well, and I'm, um, super proud of the people that we have in place and the things that we've done as an organization. You know, making sure you have the right leadership team in place I think is critical. I didn't want to leave the firm with anything. And I think also, can you. And this is. I think this is the tricky part, and I don't have the answer. We should do a part two at some point. How does that transition work and what does it look like after? Because I think that's. I'm here for the foreseeable future to help where I can help and to mentor where I can mentor and to support and enhance our firm's culture. Those are things that are really important to me and things I was working on anyway, but also hard to focus on. A couple key. It's like some of these smaller RIA firms that you're, uh, wearing so many multiple hats. I was getting to the point where I was wearing so many multiple hats in the organization that if I want to affect change in these couple key areas that were really important to me and I think important to the industry that I had to say, you know what, I have to step, um, into this and let somebody else take it from here.

Speaker B: So as you reflect on this journey, what surprised you the most about building this advisor enterprise?

Speaker C: I think probably what surprised me. It's hard. It's hard work. Not that I didn't set out thinking like it was going to be hard work, but I think when you set out to build something and you've got a business plan, and I never envisioned close to a thousand people. I mean, that creates complexity and stewardship, and I feel very responsible for the livelihoods of the people that work at Beacon Point as well as our clients. And I think that maybe that's, um. Obviously I felt that when we were a smaller organization too, but I think the magnitude of it has, ah, surprised me. And then I think we talked a lot about culture, and I think just that compounding of culture, how important, you know, that wasn't in my business plan culture. I didn't even. I wasn't even a thought in my business plan. I didn't. I just. I didn't think that. I don't know, it wasn't even my business plan. But I think that's something that we've worked really hard at over the years and has been really important to the organization. So I think that's. That's a big surprise too.

Speaker B: What. Can you just explain further? What does that mean? We've worked hard at, ah, the culture. What do you do? What's the working, effortful thing?

Speaker C: Yeah, it's a really good question. Um, throughout the years, we've done a number of things around culture, but I think it's being available as an organization. People say they have open doors, but really open doors, you know, can people connect with leadership across the organization? I think that's been really important to the firm, you know, you know, developing and building those relationships. I know we talked about, you know, Mike just reaching out to every. Every new employee. You know, that doesn't happen. It just doesn't happen. I mean, I have. I have not had one person ever across the firm say, oh, gosh, at my last firm, they did this as well. Just everyone's surprised and actually a little bit. They get a little bit worried. Like, what does this call for? We finally.

Speaker B: Oh, yeah, first day and I've already got a call with the CEO. Uh, this is either going really well or really badly.

Speaker C: Yeah. No, so it's, you know, but I think making sure you're doing the things that are important to your team. You know, we do a Gallup survey every year, which.

Speaker B: The Gallup Q12.

Speaker C: It's just our own internal Gallup survey about, you know, that we've run for the last, I don't know, several years. And, um, we listen and the survey is bettering Beacon. Done Through Gallup. And historically, I've gone through every single comment in that Gallup survey, like, what can we do better? So, I mean, we're asking, and then we're implementing now, can we do everything? No, we can't do everything, but we certainly try to, you know, do all the right things that we can actually do for our team.

Speaker B: So what was the low point on this journey for you, Ben?

Speaker C: I mean, gosh, any transition is hard, right? I mean, any. This is probably the hardest. It's not a low. I shouldn't say low point because it's not a low point. I actually did this. This is something I set out to do, but I think any change is hard, no matter what the change is. So along our journey, there's been lots of change through the organization. It wasn't a low point to centralize operations. It was the right thing to do, but it was different. Right, because then you're moving control out of a certain area and putting it somewhere else, you know, partnering with outside capital change. Right. Certainly just different. Not a low point per se, but I think change is always hard. So being able to adapt quickly to change, I think it's been the.

Speaker B: The.

Speaker C: I think it's been good for Beacon Point, and probably why we've done well is being. Is being so willing to adapt and easy to adapt. I think for me personally, I mean, there's been a lot of stuff along the way. I had a child that was really sick, and that's hard. I mean, it's hard to focus on the business, focus on your family, and make sure that you're doing all the things. And, you know, people always say, and I love it because, like, how do you get balance in your life? How'd you do it? I'm like, well, there was never balance because you're always giving up something for something else. The question is, can you have some sort of equilibrium around there, like where this. I'm. This is where I need to be right in the moment and try to do that, and I've tried to do that. I've been really focused and deliberate on that. The other area that I would challenge folks if they're not doing it is some white space in your calendar. Because I think it's really hard to think when you're in day after day after day. So to be able to think about, you know, what you want personally and professionally to find the space to do that, really important.

Speaker B: What kind of space are we. Are we talking about is this, you know, put it. Put on. Put on two hours a week, put on 30 minutes a month.

Speaker C: Like what I try to. I try to find at least an hour a day.

Speaker B: Okay, so.

Speaker C: And it's not perfect, right? I mean, some. Some days aren't going to be like, oh, I'm just solely focused on the business. But I also think it's a place where you're also decompressing about, you know, the things outside the business as well. I'm a big runner. I run marathons. And I think, you know, it's been an area for me that's been incredibly helpful to be able to take that time running and think through, listen to great podcasts like yours, or listen to other podcasts that help me as a leader, or they just help me rethink how we're thinking about the business.

Speaker B: So marathon training time also gives you thinking brain space as you go for runs.

Speaker C: Yes. You know this as well as I do is you look at our calendars today, and there's like, no space because you can zoom meeting and zoom meeting, zoom meeting. There's no even time to get up and walk away from your desk. So I think being really intentional about those kinds of things is very important.

Speaker B: So are there other pearls of wisdom of things you know now from experience you wish you could go back and tell you making the business plan 25 years ago?

Speaker C: You know, I tell people today because I think it's. I don't know, it was helpful to me, and maybe I didn't do it enough, and I wish I would have done more of it. Is, um, lean in. Lean in early. Say yes to things that you. Otherwise, that kind of maybe would, you know, put you a little bit out of your comfort zone. Because I think that the biggest, at least for me, the biggest growth has come out of doing things I'm not comfortable with. Like, I mean, look at. Look how long it took us to get this on the calendar. I'm not super comfortable with sharing my story and giving a piece of me out there because I don't like talking about myself. But I do know that when we do things that are outside of what we feel good doing or feel really comfortable doing, it makes us better people. Um, and it likely makes us better leaders as well.

Speaker B: Any other advice you would give younger, newer advisors coming in and. And getting started in the profession today?

Speaker C: Yeah, I tell this to our young advisors. Just say yes. I just said that earlier, but say yes to everything. You have other people in your office that don't want to take this particular client. Say yes. Do it because you're going to grow through that and learn. And then people are going to think about you when they're looking to place a client somewhere or they're looking for help with something or they're looking for the next leader. The other thing, um, and um, we talked about this really early on, but is you gotta show up. Not being there is really hard. It's hard to see your next leader if they're not in front of you. And I think if you look at the whole, we talk about confidence, you know, the confidence gap with women, which we will as an industry solve this, which I'm super excited about. But I think confidence follows action. It's not the other way around. So like you have to act, you have to do. And I think a lot of advisors coming out, like I'm not sure I can do this. I don't, you know, what do I know? Well, I think, well do it, keep doing it and then you'll get the confidence and show up, show up and be there and take your seat at that table. Uh, otherwise you won't get that confidence.

Speaker B: So as we come to the end here, this is a podcast about success. And just one of the themes that often crops up that just literally that word success means different things to different people, can change for us as we go through our lives. And so you've built this, I mean just objectively, incredibly successful business enterprise with the $60 billion and they're coming up on a thousand people, it seems in a wonderful place. How do you define success for yourself at this point?

Speaker C: Am I making a difference for the people around me? And what do I mean by that? Am I adding to the values of their life? So whether it's my children, whether it's my teammates I've worked with for 20 plus years, whether it's somebody um, I'm working with outside of the organization, am I adding value to them? Because they're not going to remember all this other stuff that we do on a day to day basis. But how did I treat them and am I adding value to their life? And honestly, like Michael, that is my, I'm um, passionate. I'm so passionate about helping others. Like how do, how can I help them live a better life or be a better human? Because ultimately I think that helps me live a better life and be a better human.

Speaker B: Well, you have a lot of opportunities of people to help as that team grows in a positive way.

Speaker C: Uh, yeah, no, and I'm excited, I'm really excited about, you know, some of the things I'm working on. And I just think that there's a lot of opportunity to do good, and we've been blessed, and I want to be able to bless others with what I've been blessed with and the things I've learned along the way.

Speaker B: I love it. I love it. Well, thank you, Shannon, for joining us on the, uh, Financial Advisor Success podcast.

Speaker C: Thank you so much for having me.

Speaker A: Want even more ideas, tools, and resources on how to break through to the next level of success as a financial advisor? Check out the leading financial planning industry blog, Nerd's Eye View, at www.kitces.com, where Michael covers the latest practice management trends and financial planning strategies. And by joining the Members section, you can earn IMCA and CFP continuing education credits along with exclusive member content. Get it all now at www.kitsis.com.