#FA Success Ep 238: Breaking Away To Independence For Freedom To Serve Clients The Way You Want, With Margaret Dechant

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Wealth Partners, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Resources Featured In This Episode:

Full Transcript:

Michael: Welcome, Margaret Dechant to the “Financial Advisor Success Podcast.”

Margaret: Thank you, Michael. It’s great to be here.

Michael: I’m really looking forward to today’s conversation and just talking about some of the ways that we build and transition advisory firms over time. I know a couple of years ago, you made a very big transition from the world of large wirehouses into the independent world.

And it’s a trend that I think our industry talks about a lot these days. We’ve sort of given it the aggregate label of breakaway brokers for those that are moving from the wirehouses to the independent world. And the independent world, I think sort of paints this as this tidal wave onslaught of those who are leaving. But when you actually look, at the end of the day, most years, we count the number of high-profile firms that leave the independent channel in the dozens and the number of advisors of major wirehouses is literally tens of thousands, about 50,000 across Morgan, Merrill, UBS, and Wells.

And so, as I’ve always viewed it, it’s really, at the end of the day, a little bit more of a trickle than a tidal wave. Because I think a lot of people who choose to work in a large firm environment, they do it for what large firm environments provide, right? Infrastructure, support, systems, process, maybe even some brand, resources, there’s a lot of stuff that you get in the large firm environment.

And because of that, I’ve long seen that even when advisors do leave large firm environments, they tend to work with service providers that help facilitate those transitions. So, the Dynasty Financial, Sanctuary, HighTower, or other platforms that have cropped up over the past 10 years to help facilitate those transitions.

And so, I was really struck just in learning about and hearing your story that you had made one of these transitions and just made, I guess, as I would term it like a grand leap right from the full wirehouse environments to the fully independent or just standing up your own thing and doing your own thing. And just thought, I would love to understand more of the mentality and the focus on how you think about making that kind of just absolutely enormous leap to build the firm that you’re building now.

Margaret: Okay. Well, that’s well put. It was an absolutely enormous leap to build our firm. But I guess, I would go back to your original comments. There are definitely benefits in the wirehouse environment. That is absolutely true. And the impetus for us to start 6 Meridian was not so much to get away from the wirehouse, it was to embark upon a vision of what we had as our business.

So, we had built out inside of the wirehouse our own investment management platform, we had hired a number of our own personnel, we had developed our own marketing plans, etc. And there were just some things that we really wanted to do for our clients that that environment did not accommodate. So, it was more of a vision for what we wanted to become than getting away from something we didn’t like because there are certainly, as you said, great benefits to independence and also being in a larger platform.

The Benefits Of Leveraging The Wirehouse Model And How That Compares To The Independent Channel [06:00]

Michael: So, help us understand, I guess, two things. One, maybe for advisors who have only lived on the on the independent side, just as someone who spent more than a decade in the wirehouse environment before moving to independence, what are the benefits of building in the wirehouse environment that led you to build there, that led you to stay there for a very long time when you talk about the benefits of the wirehouse? What do you think of as those benefits? What were the key points for you?

Margaret: Okay. Well, the platform is built for you, right? So, you have the technology, you have the access to the investment platforms, and you have access to alternative investments, basically, all kinds of investment solutions for your clients. Depending upon the wirehouse, you also have access to planning software or planning resources. So, there were definitely things that were advantageous in being in that environment. It’s the one-stop shop. It’s all-encompassing environment.

But on the counterpart, when you go to the independent side, then you have choices you can make regarding what financial planning software you use, etc. So, the wirehouse environment definitely has all that prebuilt for you. It’s a plug-and-play type of resource. And then, you can pick and choose what parts of it you want to use and what parts you don’t want to use.

Michael: So, how do you compare that to just what you’re living in the independent side now? I know, in just in the aggregate, wirehouse has talked about having a wide range of investment solutions. Independent platforms talk about offering a wide range of investment solutions. Wirehouse firms are talking about having fully integrated technology. Independent firms are increasingly saying, “Oh, you know, you can integrate all the technology to each other. So, we can do that, too.”

Just, you’ve now lived both sides. Are these fair comparisons? Are these not fair comparisons? How does it really stack up when you talk about investment platforms or integrated technology platforms between what it was like in the wirehouse world and what it’s like in the independent world?

Margaret: Yeah, well, great question. And, as I mentioned, in the wirehouse environment is we all know, it’s already built for you, it’s plug and play, you don’t have to really decide whether you’re going to go right or whether you’re going to go left. The independent world gives you an open architecture, which is just exactly that. So, you choose your CRM, you choose your performance reporting software, you choose your custodian, you choose your friendly broker-dealer if you have a need for one.

So, you get to build your business based upon what you believe to be the best of class for what you want to do for your clientele. So, there are advantages to that if you want to do something above and beyond what a plug-and-play type of environment offers you.

And in our case, I would say, there were things that we wanted to do on the investment management side that we could not do in the wirehouse environment. And rightfully so, that’s limited because they have 18,000 to 20,000 advisors, and they can’t have 18,000 to 20,000 advisors doing different things.

And also, we wanted to do more on the wealth management side. So, that was also a little bit limited to whatever was there for us. And I would tell you now, five years removed from that decision, we’ve delivered on those types of commitments to our team and to our clients above and beyond what we ever thought we could do.

Michael: Interesting. I do think there’s an interesting dynamic when you just talk about the open architecture nature and the choices in the independent channel that just I find there’s two ways that people approach having just a huge range of choices. One is, “I can’t believe how many choices there are.” Right? We have so much to choose from. And then the second is like, “I can’t believe how many choices there are.”

It’s like anybody who has ever built a home has experienced this. It sounds really cool when you can build the home however you want it. But then when you’re on the seventh hour of picking which color doorknobs and the handles you’re going to have, it’s like, “Okay, I wanted choice. But maybe I actually didn’t want this much choice.”

And there’s no right or wrong answer around that. I think it really is just sort of a difference in mentalities and approaches. Some of us are just wired that we want a whole lot of choices and be able to pick and choose amongst them. And for others, like, “Oh, my Lord, I’m just feeling overwhelmed. Will someone just show me a thing that’s reasonable to use, so I can get on with other stuff I would enjoy more than spending seventh hour picking the doorknobs?”

And so, I’m struck by that distinction. And that, as you’ve noted, you wanted to do things that are different than the plug-and-play environment, which meant you had to end on the independent side, because that’s where the choices framework becomes a necessity to build the thing you want to build if it doesn’t fit the standardized environment that you’re in to begin with.

Margaret: Right, exactly. That’s exactly right.

The Capabilities That Margaret Was Looking For In The Independent Channel [11:18]

Michael: So, what was it, just in practice that you talked about, you wanted to do more on the investment side than the wirehouse would allow you? You wanted to do more on the wealth management side. What does that mean in practice? What were you actually looking to do? Or what did you go and create as you went out on your own?

Margaret: Well, a couple of examples, on the investment management side, we had covered call option strategy that we wanted to continue to build out and that was a bit restricted in the wirehouse environment. So, that was one thing that we wanted to do. But since then, we’ve not only enhanced that strategy, we’ve also built out a couple of other equity investment management strategies.

And last May, in May 2020, we converted those managed portfolios into ETFs. So, the 6 Meridian Exchange Traded Funds are now traded on the New York Stock Exchange. And that was something, obviously, we never could have done within a wirehouse environment.

And the reason we did that is really client driven. We wanted to make our investment strategies and our management process much more tax efficient for our clients. And that ETF wrapper gave us the ability to do exactly that for our clients. We also have developed a couple of alternative investment strategies, along with a partner in the market. And that would not have been something we could have sketched out before we became 6 Meridian.

So, what was a vision for, “Let’s do more innovative investment solutions, let’s bring more innovation to our clients” has really been, as I mentioned before, exponentially a larger opportunity than we even thought it can be. And on the wealth management side, we wanted to be able to take deeper dives into our client lives. We’ve really wanted to make it a link arms with our clients and make it an experience for them where we got to know their true concerns and what they wanted for their families. And we’ve been able to go out and choose the software and market it as Compass underneath our 6 Meridian flag.

And more importantly, even that is we’ve been able to add the personnel that we want and that we need and the expertise that we want and we need our team to be able to do those things for our clients. So, those would be a couple of examples of where we’ve really been able to crystallize and deliver on the vision that we had when we initially launched our firm.

Michael: So, help me understand on the on the wealth management side, just when you talk about things like taking deeper dives into clients lives. I find most of us in the adviser world, no matter where we are, at least, we like to say we’re comprehensive, holistic, and we give you financial planning advice in all the different areas of your financial life.

So, I guess I’m wondering just in practice, like what’s the difference between what you’re doing now and what you’re doing before? Is it a service difference, is it staffing difference, is it like particular technology that you’re using, that you couldn’t use before that makes it happen better? What actually changed in going to the independent world?

Margaret: Yeah. It’s actually really all three of those. So, we structured our service model so that we could allow for more capacity, more time to spend with clients in getting to know their financial situation. Secondly, we’ve added to our team expertise and capacity to be able to spend time with our clients. And lastly, we did change the financial planning software that we used.

Initially, because when we left the wirehouse, we took on the same software that we had used in the wirehouse, just because it was familiar, we all know how to use it, etc. But since then, we’ve moved on to another platform that allows us to do more detailed plans to have better visuals to communicate with our clients and really have those deeper discussions. So, it was really all three of those we were able to do in under our own umbrella.

Michael: And so, is this just like a wirehouse infrastructure limitation that you could not hire more advisors, more expertise, more team members in the wirehouse environment that you had to be in a separate world just to be allowed to do that kind of hiring?

Margaret: To some degree, now I’m talking about five years ago. So, I’m going to preface and say maybe things have changed since then, right?

Michael: Sure. Understood.

Margaret: Things don’t stay the same. So, I’m just going on my vernacular from when we were making these decisions. And we were able to bring on talented people as we needed them and as we found them. And, again, back in my experience, it was, you had to prove that you needed the resource, you had to find a way to slot them in, you had to put them in a title or a role that was sort of preordained by the wirehouse model. So, it’s allowed us to bring on people in a way, in meaningful roles and give them responsibilities that we deemed necessary to service our clients.

Michael: And so, is that just a difference around just priorities and time horizon of the firm really didn’t want you to have a lot of hires unless you could show directly that they’re going to go out and get new clients? And when you say, “Hey, we want to have deeper expertise on the team.” “But it’s overhead. You can make that decision if it’s your business.” When you’re in that environment, it wasn’t always easy to make the case over, “Well, Margaret, why don’t you just go hire another advisor to bring in more clients?”

Margaret: Right. That’s well said. And one of my personal platforms, and we as a business, a priority has been to bring young, talented people into this business. And we’ve been able to give them the opportunity to take the time to learn, take the time to learn how to deal with clients, how to use the financial planning software, really learn how to be an advisor without them having to meet certain metrics along the way, right?

And that’s a choice we’ve made because we wanted to have a deep bench of younger, talented professionals that can help service our clients for the next, who knows how long? And we’ve been very successful in attracting very talented people who I believe are very happy and very fulfilled with the work that they are doing. And it wouldn’t have been as easy or maybe as time efficient, let’s just say that, as it was under our own roof.

Michael: And then you changed software as well. So, I’m curious. What were you using? And then what did you go to?

Margaret: Well, we had been using MoneyGuidePro platform, which is a great platform, and continues to evolve. We made a shift to eMoney back in fall of 2019. Because again, at that time, which things change every day, at that time, we felt like that software gave us the ability to do a bit deeper dive. And they may be more peer to peer now, looking at it two years later, but at the time, we were able to shift over to a new software platform that we believe gave us more options and more detail for the type of client that we’re dealing with.

Michael: So, the level of cash flow detail in eMoney was more appealing for your clientele than the more goals based, high level framework for MoneyGuide?

Margaret: Yes. And there are different tax scenarios, you can utilize estate planning, graphics, and visuals that you can use. So, in our mind, it was just a good choice at the time.

What Led Margaret Decide To Launch A Suite Of Exchange Traded Funds [19:12]

Michael: And so, I’d love to hear more about, from the investment end, you said you went so far as creating your own ETFs. And I know a lot of advisory firms have created their own investment approaches, their own strategies, their own models, there’s various software tools out there to help do that. Making your own ETFs is sort of another level of that though.

So, I’d love to hear more about how did the idea come about, what led you to decide to do it as ETFs? And then, literally, how does that actually happen? How do you do that? But let’s just start at the at the high level. Why create your own ETFs? We’ve already got all this cool technology that we can mix and match and buy and sell a whole lot of stuff. So, why go create your own ETFs?

Margaret: Well, it was very much client driven. And this was when we rebalanced our strategies and our portfolios, obviously, there would be tax implications to clients. And in some time periods, that could be pretty significant. So, we’d sought out to research how can we have a little bit more control over the tax implications for our clients as we were able to effectively manage our strategies.

And our investment management team did a lot of research around, is that a mutual fund? Is that an ETF? Is that changing how we rebalance our portfolios? It was 18 months of a lot of research on their part. So, I give them all the credit in the world for really crossing all the Ts to find out what the best solution was.

And after all the conclusions were drawn, it was really that an ETF wrapper, allows us to rebalance as much as we need to according to our models. And until the client actually sells the ETF, there is no tax implication there.

Now how that came about is we understand our strengths and are not so much strengths. So, we sought out the best partner in the business that could walk alongside us and help us get this accomplished. So, we partnered with it ETC. A firm that is very experienced at this type of work. And from what I understand, the best in the business.

So, they helped us walk through all the legal side of it, the SEC compliance side of it, all of the moving parts that had to happen before we could actually launch our ETF. So, I just put in a very, very short summary of what was a very long and detailed process. But, at the end of the day, particularly in the market we’re in today, since last March, the market has moved significantly, to say the least. And we’ve needed to rebalance our portfolios on a number of occasions. And because of these ETF wrappers, we’ve not had to incur tax consequences for our clients.

Michael: I would say just because of all the internal swapping and moving rules of ETFs, that as you’re making the changes in and out of the vehicle, you’re typically not triggering gains and pass throughs because of how you can manage the underlying ETF.

Margaret: That’s correct. Yes, yes. So, and this was really just driven to benefit our clients. We have no grandiose notions that 6 Meridian ETFs can be traded around the globe by any stretch of the imagination. But this was really something we wanted to do to bring innovation in to our clients, and also, of course, have a tax-effective vehicle for them.

Michael: And so, in building this out with exchange-traded concepts, what does it take to do this? How long does it take to launch it? What did you actually have to do to make it happen?

Margaret: Well, it was about, I’d say, a year of planning and understanding all of the logistics that go into it. The actual day that these were initially, one, our first ETF was traded. And it had to be carefully orchestrated because there had to be a sale of the securities and the securities had to be delivered on the other side from ETC. So, the logistics were pretty complex. And so…

Michael: And you were basically feeding existing client holdings and portfolios into it to do the initial creation process.

Margaret: Yeah, that’s correct. Right. So, we seeded those four initial exchange traded funds with about just shy of a half a billion dollars in client assets. So, we had the volume behind it to be able to make this economically feasible and also logistically feasible.

Michael: And then, going forward, just the revenue for the firm now is the expense ratio from the ETF instead of the traditional advisory fee from the firm? You can make them the same fee just built a different way? Or do you actually layer it where there’s some of each?

Margaret: No, it all looks the same for the client. And the fee they pay us is exactly the same as it would have been for an actively managed strategy. So, we didn’t want to make it an economic burden for our clients if they chose the ETF structure. So, it’s all on a level playing field for them.

Michael: Although I guess in that context if the advisory fee actually comes out as an internal expense ratio of ETF that also effectively applies it on a pre-tax basis. So, you get a little better tax treatment for advisory fees for clients because it just nets against the income before the ETF distributes any income. So, what is it cost and take to stand up for a series of four ETFs as an independent advisory firm?

Margaret: What was the seed capital that we had to put up? Is that what you’re asking?

Michael: No, what’s the expense for the firm? Does it cost you a million dollars to stand up your own ETF? Does it cost you like $10,000 because they’ve made all these things super fancy and efficient? Like just what kind of investment? What does it take from the firm as a cost, if you want to actually launch your own ETFs?

Margaret: Well, initially, we had to fund a lot of expenses, the attorneys and ETC and whatnot. And I’m going to work off my memory here, it was about $150,000 to $200,000, that we needed to make sure that we covered. This was made easier, of course, by knowing that, if we were going to be able to see the launch of these ETFs with the amount of money that we did, we did the math on how long it would take to recoup those expenses.

So, we did fund the seed capital from partner contribution but knowing that this was going to be, in our mind, a very successful venture for our clients. So, I hope that answered your question then.

Michael: Yeah, interesting. And so, as you go forward now, just because I’m always wondering what it’s like from the clients’ end to go from, they used to see your managed account with however many dozen or dozen positions that were in there. And then, it’s like here’s their statement. It’s 100% in one ETF. Like the ETFs were highly diversified with all the things that you own. But do you see any differences in interacting with clients when they go from a giant list of things that you’re managing to like, “You’re in the ETF. The ETF has all the things, but their statement might only have one line item now.”

Margaret: Which, to some of them, that’s really a great benefit.

Michael: Is it? Okay.

Margaret: Yeah, the 90-page statement was not a thing they enjoyed. But we were very diligent and careful to explain all of that, right? “This is going to look very different to you.” There are clients, of course, who do like to see exactly the stocks that they own, and that take that deep dive into their statements. So, we want to make sure they understood that although those holdings are still there, you won’t see them.

And we do have on our ETF page, we have a link that shows all of the holdings that are in the respective ETFs. And for some clients, we still take the holdings, and we tell them that this is what the portfolio holds. And this is what went out and this is what went in during the last rebalance. So, we’ve worked to provide as much detail as continues to make our clients comfortable. And it was not a mandatory move into the ETFs. If the client wanted to keep the managed strategy, then that was completely up to them.

Michael: Okay, okay. And so, but I guess the pitch or the offer or the appeal or just why you were going down the road in the first place is, “Hey, but we are continuing to manage and trade and rebalance your strategies that will trigger some tax consequences. If we do this in the ETF wrapper, if you transition to the ETF wrapper, you can minimize some of these ongoing tax consequences.”

Margaret: Yes, that’s correct. I mean, you need to disclose all of the details around both the managed portfolio and the ETF, right, and ultimately the client’s decision.

Michael: And is there a tax-free exchange version for actually as clients contributed in? Or did some clients have to deal with tax consequences to essentially sell their stocks and transition into the ETFs?

Margaret: There were some tax consequences with it, but in the end, we made sure that we disclosed all of that to the clients and they understood the implications and what was going to happen.

Michael: Right. And just that’s part of the trade-off for getting what’s better treatment on the other side. I would presume as well that means, in practice, these also tend to be things that you have more in client taxable accounts and not necessarily in retirement accounts because you didn’t have the same tax consequences or the tax issues in retirement accounts in the first place?

Margaret: Generally speaking, that’s correct. Yes.

Michael: Okay. Interesting. So, as you look back on it now, how are you feeling about ETF versus managed account structures now that you’ve actually lived it? Is this all like, “So glad we did it” or looking back like, “Okay, we did it. We’re moving forward.”? I don’t know if I would have done that again from scratch, given what we don’t know.

Margaret: Oh, no, we would completely do that again. Absolutely. And part of that is emphasized by what’s happened in the market since last May when we did this. So, our small cap strategy was rebalanced earlier this year. I don’t remember what month. And almost 100% of the positions were rotated out. So, that would have been a significant… And that’s just one example that would have been a significant tax impact for our clients. So, it’s been very beneficial for them along the way.

Michael: And obviously then it makes it clear in the context of why transition to independence. Not a lot of employee advisors at a wirehouse that get to create their own ETFs for their individual client base. And so, the idea, in essence, was just anything that you were previously running as a model strategy, you now run as a centralized model in an ETF and the clients by the ETF?

Margaret: Well, we still have a couple of strategies that we did not convert. And that’s just because these four strategies held stock positions. The other ones have mutual fund ETFs, etc. So, but our equity strategies are now under…have an ETF option.

Michael: So, you were doing these primarily with things that were previously individual stocks that’s just more traded, more tax consequences for the trades. You’re not necessarily adding a layer of cost of like rolling up funds inside of funds inside of funds. It’s just, “Hey, we’re taking our direct stocks and putting a wrapper around it. That’s the same cost as what our advisory fee would have been. But we get better tax treatment when we make the changes within the wrapper.”

What 6 Meridian Looks Like Today [31:37]

So, help us understand then just the overall size and scope of the advisory business? How big is the firm? How many clients. how many team members? Paint the picture for us of what 6 Meridian is.

Margaret: Okay. Today, we have $3 billion of assets under custody. So, the majority of that is under management, but we do have some assets that or sit under custody for our clients. Since we’ve launched 6 Meridian, we’ve gone from 13 total, including the partners, to now 24 personnel under a roof. Clients, we have about 700 households that we service. And we’re not a family office setup, but we do wealth planning and investment management for those 700 households.

Michael: Okay. And so, what is the 24 people… kind of breakdown, who does what or how do you structure the team internally? Since I know you’ve got advisory services, you’ve got deep investment team work that you’re doing. So, can you paint a picture of what that org chart looks like kind of how the team breaks out?

Margaret: Yeah. We have an investment management team who’s led by our Chief Investment Officer Andrew Meese. And he has a staff, a team of four who worked with him on the liquid and illiquid side of things.

Then we have the advisor side. It includes the partners, five of the partners, who also have client-facing responsibilities. So, there are 11 total client-facing advisors. And then, we have a support team, a service team of four. They’re the engine that keeps us running. They do all of our client service. They do a great job taking care of our clients on day-to-day type of requests and needs.

And then, we have operations, a chief operating officer with a dedicated technology expert, and we have someone who manages our office. And then, we have a chief marketing officer. So those are the pillars of the business.

Michael: Okay. Very cool. And so, as with a lot of firms, almost half the total headcount is simply advisors out to clients directly. How do you, I guess, just manage or structure client service? Are you a team-type of environment where every client has two or three advisors in the room? Are you individual, each has their own client base that they’re lead on? How does that work just for all the different advisors and the clients that they’re servicing?

Margaret: Yeah. No, everyone works under the same umbrella. So, we do not have individual advisors. For each client, we make sure that there is a lead advisor and then a co-advisor. So, at all times, there’s someone available for the client. And then, they have a dedicated service team member who also works with them.

Michael: Okay, so the core for a group of clients is basically three people, like a lead advisor, a co-advisor, and a dedicated service team member?

Margaret: That’s correct, right.

Michael: I guess, service team members are generally supporting two advisor teams at a time just kind of given the math, 11 advisors, 4 service team members.

Margaret: Right. Yeah.

Michael: Okay. And typical clients? So, I’m sort of doing the napkin math of just $3 billion of assets under management and 700 clients, puts you at a $4 to $5 million average client household. Is that a good representation of where you are a for typical client? Obviously, some bigger, some smaller, right?

Margaret: Yeah. Yes, it’s always the way it work. Yeah, the average would be around $5 million under management. Obviously, as you said, some bigger some smaller, but that’s kind of our sweet spot.

Michael: And so, when a client is a client of the firm, what is that experience look for them in practice? What are they, what do you do, what kind of what do they get when they are a client of 6 Meridian through the year?

Margaret: Well, when we onboard a new client, we always start with the wealth plan. So, it’s a big-picture look at their financial life. Oftentimes, looking at all the investments, but also looking at what is really important to you and your family. So, there we start with the plan. And then from the plan that helps us look at how does their portfolio need to be allocated to get where they want to be.

So, as we say, the investment management side of it, they are the tools to help them get to the solutions that they want to achieve. And then, we make sure that the clients are onboarded and then very…kind of reinforce the buying decision, so to speak. So, we want to make sure that they’re very comfortable with our website, with our statements, with our online access, with the performance reporting that we’re going to be providing to them. So, there’s a bit of an onboarding, touch point that takes place to make sure they’re comfortable, and that we’ve gotten all their questions answered.

So, from there, it depends on the client, right? They’re all different. Oftentimes, we meet with clients who start out saying, “We’ll meet with you as often as you like,” whether that’s two times a year, four times a year. But as we all know, oftentimes four times a year turns into more like two because the quarters go by so quickly.

But more importantly and how often we see them is how we keep track of their financial lives, right? So, we just want to make sure that we’re championing all the things that they need to have done to make sure that they have all their financial Ts crossed, whether that’s, have they talked with their CPA about their current tax situation, their quarterly payments, have we gotten with the estate attorney to make sure that we understand the estate plan, do we have their beneficiaries correct, all of those things that it’s difficult as a client to keep track of all those things. And we consider that our job to be that… I don’t want to use the quarterback because I think it’s overused, but to be the group that has their arms around everything that’s going on in their financial life is.

As you know, Michael, what we see in our clients as we continue to grow up with them is the money at some point is almost the least of their concern. It’s more about their family. “What’s going to happen when I’m not here anymore? What are is my legacy? Are my values going to be translated on to my family and my community?” So those are the things that we really want to make sure we understand about our clients and what they’re trying to accomplish.

What Margaret’s Onboarding Process Looks Like For New Clients And Where New Clients Come From [38:35]

Michael: So, for a client that comes on board, just walk me through what the process looks like. If I say, “Margaret, this stuff sounds great. I want to be a client of 6 Meridian. Sign me up, let’s get going.” What happens? Just how does your process work for a new client that’s starting as an investment process and the planning process and operations onboarding. There’s a lot of stuff there. So, what is that process for your firm when someone says, “Sign me up, I want to work with the firm.”

Margaret: Yeah, well, we need to know a couple things about you and your family, the profile sheet, the know your client. So, of course we take that information, but it’s all done by DocuSign now. So, thankfully, our technology allows us to, “If you want paper, we’ll let you sign it in paper. If you want it electronically, we’ll send it to you electronically.”

So, there’s that very basic get to know basic information that we need, we send you that, we gather the information, we send you that to sign, you sign the account opening documents, and boom, you’re a client. Then you would meet your advisor team, you would meet your service team, and we would get you comfortable with the website, the logins, etc. Does that answer your question?

Michael: Yeah. So, in meeting an advisor team, service team, is that just actually like there’s a standalone meeting that is just “meet your people that are going to be working with you”? Or do you send people little intros or little videos to watch? How do you get them introduced to who your advisor team and service team is?

Margaret: Well, admittedly, that changed a little bit last year. It was done virtually, but yeah…

Michael: What was it pre-pandemic, at least? How did it traditionally work?

Margaret: Typically, it was not as easy as you just described it. But by then they know, they’ve already met the advisor team they’re going to be with. And we do like for them to be personally introduced to the…whoever. If they’re coming in the office, we would introduce them to Tracy, who runs the office and she’s basically the first face people see in our organization when they come in the door. We walk them around and introduce them to the team.

So, but at the very least, they’ve met their advisor team and their service person they’re going to be talking to. So, that’s kind of the baseline of what we want them to be, who they want them to be comfortable with when they are becoming a client.

Michael: Okay. And then, what comes next as they’re getting started and onboarded? So, I did my initial advisory agreement, I’ve met the team. What’s the next meeting? Or what comes up for me in the process here?

Margaret: Well, since you already, you fast forwarded to this point, we would back up and would sit down and talk about them, and their family, and their plan, and what’s important to them. And then, from that would build an allocation and financial solutions that fit that allocation.

Michael: Okay. So, as you grown just to this to this very sizable $3 billion of assets under custody. So, where does new business come from? And that’s a very big number of some very affluent folks. So, where do new client opportunities come for you? How have you have you been able to build and attract clients this way?

Margaret: Well, most of us have grown up in this community, in this area, so…

Michael: What’s the area for you just where are you based? So that people know…

Margaret: We are in Wichita, Kansas, and most of our clients are here. But we have clients around the country. Most of them with roots here, though, or some connection to a family that we already do business with.

So, the majority of our business comes from referrals from existing clients. And if you look at our client base, it’s basically business owners, former business owners, executives, or medical professionals. So, when the work that we do for these people, with these people, many are very generous in sending us referrals of their friends, their family, etc.

Secondly, because we’ve been in this community a long time and we enjoy a great reputation, at least we think we do, we believe we do, we’re pretty well connected with some key centers of influence. And, Michael, what we did a couple years ago was we looked at where our referrals coming from, when it comes from the centers of influence, meaning attorneys, CPAs, etc., where are referrals coming from, and let’s really focus on that handful of professionals who know us and have sent us referrals, and that we’re really, truly partnering with.

And so, instead of trying to cast a wide net, with the professionals in our area, we’ve really honed in on a handful of CPAs and attorneys, and we want them to know our business inside and out. So, we give them updates on the ETF strategies, what we’re doing on the financial planning side, if they’ve referred us a client, we sit down with them and walk through their financial plan with the CPA so they can see what we’re showing the client.

We’ve really worked to lock arms with them and partner solidly with a few key referral sources. And it’s one of the best decisions we’ve ever made. And I know it’s probably not anything revolutionary that no one else has thought of by any stretch of the imagination. But I would tell you, just from our perspective, it has elevated the level of referral that we get from them because they understand how much work we put into a client. And they understand where we can do our best work for what clients. So, it’s not only increased the number of referrals, but it’s also increased, say, the quality of the client, the complexity of the client that we’re seeing.

Michael: Interesting. And so, just a conscious strategic shift to say, “We’re not going to try to generate a whole bunch of referrals from a whole bunch of centers of influence. We’re going to try to generate focus referrals from a much smaller number. And we’re going to get really, really deep with them and really show them what we do.”

Margaret: That’s correct. That’s right.

Michael: And so, is there a particular focus of doing this with attorneys, doing this with CPAs? You know, there’s some firms with other COI types as well? What are the COIs have been for you, the centers of influence, been that are connecting the best in practice?

Margaret: It’s really, it’s three or four CPAs and three or four attorneys. So, we haven’t gone beyond that. And those are the ones that we’ve really focused on the last few years.

Michael: And are they a particular type or focus? How did you pick or find them in the first place?

Margaret: Well, the first thing is that we have a number of common clients with them. So, they’re familiar with what we do and how we do it. And the attorneys are estate planning attorneys largely. And the CPAs are CPAs who have the expertise in business accounting. So, they are doing the accounting work for the client and their business, typically. So, oftentimes, that has led to a liquidity event, the business changes hands, whatever the case may be.

Michael: Okay. So, just gets you close to people that have some dollars or may have money in motion when you’re literally working with estate planning attorneys who deal with people passing away where money may be in motion, or CPAs who are focused on business accounting in particular. So, they have small business owners of a particular size who may have sales or liquidity events at some point?

Margaret: Correct. Yeah.

Michael: And so, what do you do just to get deeper in the relationship with them? As I’m sure you’ve seen as well, a lot of advisors say they have relationships with centers of influence and try to connect with them but aren’t necessarily getting the growth that powers a $3 billion firm. So, what are you doing in this relationship building process with centers of influence that you think is driving such results in practice?

Margaret: Primarily, it was the focus to make sure they understood what it is we do for clients. So, just the question you asked me a little bit ago is, what’s the experience, right? What exactly is it that you’re doing? What does the client see from you? So, we want to make sure that they do understand just that. What is the final, what does the wealth plan look like? The estate plan that I wrote for the client, how are you showing it to them visually in your planning software? And why does that matter?

And from the CPA side, we do that as well. But we also do a lot of hand holding during tax season. We want to make sure that neither the CPA or the client have to ask for anything. We want to make sure we have that, all of the tax documents to them, as quickly as we can get to them.

So, it’s a combination of, I’d say, if I narrowed it down, as I’m talking is making sure that they understand the experience and what it is that differentiates the 6 Meridian experience from any other place they could send it to. We want them to have confidence in us that we’re not going to drop the ball because you and I both know, if you refer a friend to someone and it’s not the experience that they expected, that doesn’t bode well, right?

And then we just want to make sure we make their lives as easy as possible. So, CPAs are busy during tax time, if we can help take something off their desk, then hopefully, we’re adding value to them and the client.

Michael: And so, as you go down this road of trying to make sure they understand the experience of what it’s like, just how do you do that? Are you explaining it? Are you taking them through a mock process? Do you actually try to get them as clients and have them experience it because you did it for them and then they know? How do you actually get them to really understand what you do and how and why your depth of service is different than others?

Margaret: Yeah. Well, we’ve got a couple to be clients. So, that’s always great, right? Really, to look at the experience, it’s more what is the client seeing in the wealth planning? What kind of information are you gathering? How deep are you going into their financial life?

And then also, so that they’re familiar with our performance reporting tools. And how we can aggregate information for clients are just some of the services we can do. So, we don’t go through the onboarding experience, so to speak, but it’s more what is the client going to have? What resources are we bringing to the table for them when it comes to the wealth planning software and the detail that we go into when we talk to them about their wealth plan? And what changes have the investment portfolios undergone? And how are you approaching managing these liquid and illiquid assets?

So, just so they have a better understanding of what it is that we’re bringing to the table, if that makes sense. Not to experience it day to day, but more, what do you bring into the client?

What The Catalyst Was That Triggered Margaret’s Decision To Break Away [50:24]

Michael: So, now, take me back again to just the transition and this change where you spend 10 to 15 years in a large wirehouse environment and then at some point you decide like, “I think maybe we want to make a change and go independent.” So, I’m wondering what ultimately led to the decision that said, “I think we’ve got to make a change.” I mean you’ve been there for 10-plus years. Was there a catalyst or something that said like now we just got to do this now?

Margaret: I can tell you exactly what it was. It was we our Chief Investment Officer Andrew and I were having a call with a firm that does audited performance. And we had a great call with them. They told us what we would need to do to get our performance GIPS-certified.

And as we were wrapping up the call, he said, “Well, you realize, of course that when you leave, if you ever leave the wirehouse, none of this belongs to you. It’s work product. So, you can’t really translate it to being yours.”

Michael: So, the trigger was that you would lose all of your investment track record, the strategies that you were building, if you were building them under the wirehouse environment.

Margaret: Yep. That’s correct. And, honestly, I don’t know why we hadn’t thought about that prior to that particular moment other than your just run your business, and you’re going day to day, you don’t stop to think about those things. But when Andrew and I hung up the phone, we looked to each other, and said, “All of this work, all of this investment we’re making into our business, it’s not ours.”

And I totally get why. It’s work product, and you’re technically an employee of an employer. So, it doesn’t belong to you. It’s not unlike a lot of other things. But we just never put it in that context. And that really started the wheels turning of, if we’re going to continue to invest in our business and want to continue to elevate our game, is this really the place we want to do it?

And that started what was about an 18-month to 2-year exploratory process to say, what are our options? What does the world look like out there? But that was the impetus right there.

Michael: So, as you then say, “Okay, we got to start figuring out what the options are.” So, tell me about that. That process or that journey. I mean, just you’ve lived almost 15 years in a wirehouse, in that environment. So, how did you go about finding information? And what did you look at?

Margaret: Well, like a lot of advisors, wirehouse, not wirehouse, we get calls from recruiters and people wanting us to take a look at their platform. And I had gotten a call from a guy that was, he was the first person that ever said, “What do you want your business to be? What’s your vision for it?” Not, “You can get a check this big by walking across the street, you know they’re paying three times that,” whatever. He actually wanted to know what we wanted our business to be.

And so, we talked about it as a group, and I said, “This is going to be a big venture, could be, so let’s go find somebody who can help us get smarter.” And that was the consultant that we ultimately hired to help us look at all the options outside the wirehouse environment. And Mark Albers is his name, and he did us…he’s still a great friend to this day because he was really a partner for us in helping us decide what path to go down, what partners to choose. He was invaluable to us, helping us swim through water, murky water, that we had no idea what we were in for, really, because, as you said, we’d been in the wirehouse environment for 15 years. So, that was a big, unknown world for us.

Michael: Interesting. And so, the process with Mark was just to help get some perspective on like, “So what are my choices out there? How does this work?”

Margaret: That’s right.

Michael: And so, what did you learn? What did you hear? How did you take it in as you as he started saying, “Well, here’s how it looks on the other side of the mountain?”

Margaret: Well, at first, it was very overwhelming. As we talked earlier, you have the plug-and-play environment versus that open architecture, the seventh hour of choosing doorknobs-type of situation. But he helped us really kind of go through the decision tree, right?

So, there are different ways you can go about this. There are quasi-independent, there’s the finite platform, which is kind of independent, but yet you have the chassis of Wells Fargo underneath it. There’s a fully independent.

And I’m not going to do all that justice. But basically, he helped us kind of look at all in going on your own, all in going with a partner, or maybe some sort of hybrid type of situation? And this was, like I said, months and months of talking about it. And the place we started really was the custodian. You know you’re going to need a custodian, so you need to vet those options. So, we kind of started there as the big first step.

Michael: So, who did you look at for custodians and who did you end up choosing?

Margaret: We looked at kind of the usual suspects. We looked at Schwab, Fidelity, and Pershing. And Pershing is actually our one and only custodian.

Michael: So, why Pershing or why not Schwab and Fidelity? What led you to that decision?

Margaret: Well, at the time again, this is six years ago, five years ago, under our client base, we had clients who needed access to customized credit. And a pretty significant piece of our business is with credit. And at the time, Pershing and BNY Mellon were the very best solution, head and shoulders above what anyone else was able to do in that regard.

Again, I’m going to qualify that to say that could have changed in the last five years. I don’t know because I’m not out there looking for it. But the second piece of it was we really liked their people. They don’t try to be all things to everyone and have been terrific partners for us.

Michael: So, when you talk about just customized credit, like what does that mean in practice? And what are you actually doing in the credit realm?

Margaret: We have, our clients, may want to buy a home in Hawaii or finance a jet or buy company stock. It’s kind of a litany of things. And then, we just have clients who want access to investment lines of credit. I mean, credit that is obviously collateralized by their investments at 6 Meridian.

Michael: And so, you found this Pershing, or I guess, Pershing with the BNY connection, has more options, more capabilities to do that kind of specialized borrowing for high-net-worth clients?

Margaret: Yes. And again, I’m going to qualify that. At the time, five years ago, six years ago, that was true. I have no idea whether or not that capability is more widespread today. But we’re happy with what BNY Pershing does for us on that side.

Michael: So, step one was choosing RIA custodian. And you came to a decision on Pershing. So, what was the next trigger point or decision point or thing that you were deliberating on as you went through the process?

Margaret: Well, at that time, there are more options available today as far as what I want to call platform providers. I don’t know that that’s the best terminology. But as you mentioned, Dynasty, Sanctuary, some of those firms, that we were all sort of in our infancy at that point. But we looked at whether or not we wanted to have a partner or if we wanted to just go out and make these decisions on our own.

And we were fortunate because we had numbers, right? There were 13 of us. We had teammates who are ready, willing, and able to do the work. Basically, you’re doing two jobs, right? You just can’t do this while you’re at Morgan Stanley and doing your Morgan Stanley work. So, you have to do it outside of work hours.

So, we decided we were going to go ahead and just move forward on our own. So, we divided the labor and kind of all the decisions that needed to be made. So, we had a team that worked with Pershing, what’s the investment management platform because we still needed access to third-party money managers and the trading platform and what does all that look like?

Then there was the CRM. What kind of chassis do we want our CRM to be? Investment reporting and account aggregation, what we want to do there? So, those were the handful of decisions that we wanted, we had to get going on fairly quickly just because there are a lot of…it takes a lot of time to vet all those, particularly, when you’re not familiar with the landscape. So, those were the some of the biggest decisions that we made.

Michael: And what did you end up choosing when it came to CRM and when it came to investment reporting and account aggregation?

Margaret: We use Addepar as our investment reporting platform. And we love the customization that we’re able to do with that. Again, that was kind of one of the things that we felt was important in this journey was, “Let’s give our clients a performance report, a deliverable that’s easy to understand and tells them exactly what they want to know.” So, we’ve been very happy with Addepar.

The CRM, we actually have changed away from the original one that we selected. And we’re thrilled with the one we have today, which is Salentica. It’s basically the nerve center for our team. It’s how our team communicates client notes, client tasks, calendar requests, the whole thing. It’s just very dynamic and fits our business well. So, a lot of the decisions you make beyond the custodian or technology related, just because that’s the client experience, right? I mean, that’s the internal client experience plus the external client experience.

Why Margaret Decided To Go “Fully Independent” Versus Leveraging A Hybrid Support Option [01:01:34]

Michael: And so, as you’re then looking at all these options… like there’s quasi-independent, there’s sort of a hybrid supported options with players like Dynasty and Sanctuary. There’s the fully independent model, I guess, ultimately, is what you chose and where you ended out.

Just how did you ultimately choose amongst these? What led you to the fully independent choice? And how did you decide that over the others? What was the trigger for you?

Michael: Well, at that time, again, we had a pretty good-sized team of people that we could allocate, divide, and conquer with our numbers and time committed. And there was a cost factor there. I don’t know if we were safe, we were looking at that decision today. I don’t know. It went fine.

Obviously, we’re on the other side and we’re doing exceptionally well. I don’t know if today, knowing what I see in the market today, how these platforms are, like Dynasty, for example, if we wouldn’t go that route just because that may have helped us get up the curve a little quicker knowing what we…given we don’t know what we don’t know. But it worked out fine for us, the way, the path we chose, and ultimately was just the fact that we had the firepower to be able to tackle it inside our own walls.

Michael: So, what was the biggest challenge or surprise as you were making the transition?

Margaret: Well, I’m going to go to the upside surprise, which was the overwhelmingly supportive response from our clients. Without question, they embrace the fact that we are going to launch our own business, be able to do things, for them, that perhaps we weren’t able to do before. The tidal wave of support was very…I mean, it’s a scary time, right? So, the tidal wave of support we got from our clients was just, reinforced our decision and gave us a lot of confidence that this was going to be successful.

Michael: Were you worried about the dynamic of whether they would come or whether they’d say like, “Margaret, wish you the best but I kind of like the strength and depth of a firm like Morgan Stanley. I don’t know about this hanging-your-own-shingle thing.”

Margaret: I don’t know that we were worried. But we were sitting on top of a business inside of the wirehouse that was a pretty good machine, right? Our people were comfortable. Our clients were comfortable. We were all making good livings. We had built this business over decades, right?

So, here we are making this giant shift. And we’re confident that our clients are going to come with us, but you don’t really know. So, you, on Friday morning at 8 am, you’re sitting on top of a $10 million business. And Friday morning at 9 am, you’re unemployed. So, you know, it doesn’t come without some anxiety, regardless of how optimistic you are. So worried, no, but anxious, yes.

Michael: Okay. And so, how do you break the news to clients when it was time?

Margaret: We had, as you probably have guessed, because of the size of our business, we are pretty meticulous in process. Because otherwise, how do you run a business like this?

So, we had divided out our client list by person, by priority. We already had some air travel arrangements made. But obviously, you have to follow protocol and you can’t contact them until you are given the all clear by your legal team.

So, once we were gotten all clear, we all got on the phones and we started with our…not just our top clients, but the clients that we really wanted to make sure knew this from us quickly. So, it was from, I don’t know, let’s say 10 am that Friday morning to all over, throughout the weekend we were calling clients on ongoing basis. And then, the following week, when we needed to travel, we would, to go see them in person.

Michael: And in practice, you did, I guess, how many claim or where there some who didn’t come. Or were the ones who stayed behind only the ones that you actually wanted to stay behind? Or did you, “Oh, darn.”

Margaret: Yeah, doggone.

Michael: Or did you have some that were surprises that didn’t come with you on the transition?

Margaret: There were not significant surprises. We had a couple that just, they’re like, “We’re fine where we are.” But not many. We moved over about 97%, 98% of our business. So, it was largely successful in every way we wanted it to be.

What Surprised Margaret About Building An Advisory Business And The Low Point On Her Journey [01:06:31]

Michael: So, having been through this growth process for the business over the past two decades or so, what surprised you the most about building your own advisory business?

Margaret: I’m just thinking, that’s a big question. I don’t know that it’s surprising. But it’s a lot of work. And like they say, anything that’s great is on the other side of hard, right? So, it does take a lot of work. And I have been fortunate to have a team around, right? I’m in awe of people who are able to build an advisory business as a one or two- or three-person shop because of all the things that you have to ride herd over or ride… I mean, you have to do the planning and the business planning and investment management solutions. There’s so much that goes into it. So, I stand in awe of anyone listening who is in that category because, as we built the team over the years, we knew every year we do business plans, and we would see what was ahead of us and how the complexity of the clients’ lives was becoming more and more so. And so, building out the talent and infrastructure to be able to stand on top of that is very arduous, rewarding, and in many ways, it’s a very complex business.

Michael: And so, I guess that’s also part of the journey for you that it was one thing to decide to be independent at the stage that you did because of the size of the team and infrastructure that you had. But getting there meant being in a large firm environment that had that support and infrastructure to be able to grow the business and the team to be at that stage in the first place, is that a fair characterization?

Margaret: Yes.

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

Margaret: I would say that over the many decades of my career, the financial meltdown of 2008, 2009 was rough to say the very least. I don’t know that even today, we all fully comprehend how close we were to going into a financial abyss. And the anxiety…We had a client who called one of my partners Friday afternoon, he said, “I want you to print out all my accounts, all the holdings, because I’m not so sure your company’s going to exist, your wirehouse is going to exist on Monday morning.”

Michael: Because, frankly, you’re actually at that point now of like, “It’s not like we can even transfer it out fast enough, it’s going to blow up. We may as well just print all of it so at least we can commemorate it in the bankruptcy recovery proceeding.”

Margaret: Apparently. I think that was the weekend when Bear Stearns went out. You know, companies did go out of business. And that was a rough period in looking back at my career. That was a rough time for our clients, for the industry, for our people. It was, yeah, to call it rough is kind of an understatement.

Michael: So, what was that like when you’re living that in the New York wirehouse firm environment? Were clients asking questions about Morgan in particular?

Margaret: Sure, they were. And, to their credit, Morgan Stanley was very forthcoming with information and talking points and supported us wholly in the process. They could not have done a better job of keeping us up to speed with what was going on. But it was just a very scary time. I don’t know that we all want to reflect back on it fully because of the post-traumatic stress we might all have. But it was just a very tenuous time.

And I don’t know that clients, any other than the one, actually thought that the firm was going to go out of business. But the financial industry, in general, was very suspect at the time just because of all the data that was coming out in that regard.

Michael: So, as you look back on this journey over the past several decades of building. What do you know now about building advisory firms that you wish you could go back and tell you from 10, 20 years ago as, “Hey, just a tip. You know what I know now, here’s what you should probably know you’re getting into.”?

Margaret: Well, it sounds kind of, I don’t know, common sense. But really focus on what you can control. And there are so many, particularly these days where information is so free flowing. There’s social media, there’s headlines. We’re all, we have the attention spans of gnats sometimes, and it’s easy to get distracted by things that you can’t control, you can’t influence and, at the end of the day, don’t impact you.

So, approaching your life and your business with a focus around, what can you do? What can you control? What can you influence? I’m probably not alone in saying there were probably a lot of times I spent, I had, looking at your chart, doubts, disappointments, late nights worrying about things that I couldn’t influence, right? They were just subliminal exterior factors that were set in stone. And what I need to do was move forward.

Michael: What was the biggest thing that you got stuck on for a while that you wish you hadn’t gotten stuck on in retrospect?

Margaret: Well, let’s see. I would say, that’s a tough question to answer because there’s so many things over the years that are, or distractions, so to speak, but just speaking in general, through my career, I went through a number of mergers and acquisitions in the banking side of things, and then Morgan Stanley, Smith Barney.

And those things are very hard on clients and people. And there’s a lot of mental anxiety that goes into that. At the end of the day, it is what it is, right? You just have to keep moving it forward, you have to stay positive. And you just have to do the best you can with the cards that you’re dealt. And those were probably the most trying times where external factors seemed to be overwhelming, when at the end of the day, it was all going to move forward, it was all going to be fine. You just had to get to the other side.

Michael: So, what advice would you give newer advisors looking to come into business today?

Margaret: Well, we’re very focused on culture, as I know a lot of firms are cultural fit. I’d say if you’re looking to get into the business, understand, first of all, what is it you’re want to accomplish? Is it that you want to serve people? Do you have a heart for service? Do you really want to know people to the depth and breadth it takes to be able to do this work?

And then, if the answer is yes, find a firm or advisor or an environment that’s really going to support, that lines up with your values and your goals on what you want to accomplish. It’s a very rewarding business. It is very hard work. And you need to be in a positive environment that lines up with what you want to accomplish. I know that sounds very general, but I’ve seen people very misplaced over the years with who they were working with and what they were trying to accomplish. And it just didn’t line up. And as a result, one or both or all failed, when they could have been successful, had they just gone right instead of left.

Michael: And I guess just can you give me an example or like just for people coming in the industry who don’t know what the different environments are and what the different things are that they could even be misaligned on, what kinds of things does someone new coming in the industry need to be watching out for if they don’t have any of the context, aside from after the fact you’ll probably realize that was the wrong environment? Which doesn’t always help after the fact?

Margaret: Well, I’m going to try to answer this, Michael, hopefully I do your question justice. But we’ve all seen people in this business that are successful with very different skill sets, right? You have people who are very aligned with…they’re people people, right? They really have a heart for service. They really want to be able to help people. You have people that are very sales driven. They see the carrot, and they really want to go get new business and find new business, but not so much in serving the clientele after the fact. We’ve seen people that are very organized and structured, who maybe line up in the more the client service side of things or you have a passion for investment management and the investment acumen.

So, you need to be in the right seat for this to be a career for you just because the things we talked about. It’s hard work. There’s a lot of different moving parts. So, I guess when I say, “Find someplace that’s going to give you the opportunity to be in the seat that best suits you…” And I know that’s probably making it sound very simple because it’s not that simple.

But with the opportunity in our industry today, you have all of these advisors and people who are looking at kind of the sunset of their career and they need young, talented, driven people to come in and help them. There must be opportunities out there for people who sit in one of those seats to be able to add value to a business and their clients. Maybe I’m wrong.

What Comes Next For Meridian And What Success Means To Her [01:16:22]

Michael: So, what comes next for you and 6 Meridian?

Margaret: Well, we’re continuing to build out our team here, adding expertise and talent to better serve our clients. So, and again, I think I mentioned we’ve brought in a number of next generation professionals to be able to continue our business for as long as our clients will continue to support us. So, we’re just working to stay ahead of our clients and what they want from us from that perspective.

From my perspective, you know, I’m just very proud of what we’ve built here. And the way that we’ve been able to do it. It’s a great business, serving great clients, full of great people. And hopefully, I get to be around for a few more years to watch it continue to thrive and succeed.

Michael: So, when you look at this environment of trying to hire and expand the team to, I guess, you put like, to stay ahead of the clients and the ever-rising demands from clients. What do you look at as the next thing that you have to be hiring for, doing, or delivering to stay ahead of them? When you say you’re adding expertise in town, where are you adding it in the firm? What do you feel needs to be hired to stay competitive and stay ahead?

Margaret: Well, first, we’re always looking at the capacity to be able to spend the kind of time with clients that we need to. So, we continue to look at adding to our service team and our infrastructure support group.

And then, from an advisor perspective, we’ll continue to look for financial planners, people who want to become financial planners. We’re at kind of a precipice, so to speak, where do we want to partner strategically with third parties and build out somewhat of a family-office type of structure? Do we want to look at building that in-house? Some of those things where our clients are starting to, they’re asking questions about, “Do you have bill-pay capabilities? Do you have the ability to do taxes in house?”

So, I’m not, I don’t, we’re not. That’s kind of where we are. So, do we build that structure in house? Do we partner with a third-party local providers to build that kind of alliance? Those are the kind of the questions that we ask ourselves every day.

Michael: Because you’re getting more affluent clients further up market who are asking for things like bill pay, in-house tax returns, all in one kind of shop.

Margaret: Correct. Yeah.

Michael: So, as we wrap up, this is a podcast about success. And one of the themes that always comes up is just the word success means different things to different people. And as someone who’s built an incredibly successful, multi-billion-dollar advisory firm, how do you define success for yourself at this point?

Margaret: Well, first, there was a lot of help in that firm, though, it’s always been a team effort all along the way. But my success comes from getting to do work that I enjoy every day with people I really do honestly love.

And secondly, one of my biggest goals in my career was to help younger people come into this business and to give them an opportunity to thrive in an environment that’s healthy and supportive. And we have definitely built that here. So, when I sit here today being, I won’t tell you how old I am, but the fact that those two things are true today is definitely my definition of success.

Michael: Oh, very cool. I love it. I love it. Thank you so much, Margaret, for joining us on the “Financial Advisors Success Podcast.”

Margaret: You’re very welcome. It’s absolutely my pleasure.

Michael: Thank you.