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Speaker 1: This is Master's in Business with very Ridholts on Bloomberg Radio.

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Speaker 1: This weekend. On the podcast, I have a special guest.

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Speaker 1: His name is Dave Welling and he is the CEO

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Speaker 1: of Mercer Advisors. Dave is a fascinating guy who has

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Speaker 1: really a very interesting career path through everything from consulting

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Speaker 1: to private equity to technology all the way into the

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Speaker 1: financial services business. He brings a very different perspective to

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Speaker 1: that industry. He never was an advisor, but he has

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Speaker 1: worked in and around financial services his whole career, and

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Speaker 1: and that really gives him a unique perspective. He has

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Speaker 1: done quite an amazing job building Mercer from a seven

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Speaker 1: or nine billion dollar shop to a twenty one plus

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Speaker 1: billion dollar shop, one of the fastest growing firms in

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Speaker 1: the industry. Um I forgot to mention and during our

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Speaker 1: conversation that he was named CEO of the Year by

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Speaker 1: one of the financial magazines. He comes to us with

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Speaker 1: just a very straightforward, honest perspective about what the financial

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Speaker 1: services should be doing to both take care of its

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Speaker 1: clients and employees, but as well as being a force

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Speaker 1: for good in the world. I found this to be

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Speaker 1: a fascinating conversation, and I expect you will also with

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Speaker 1: no further ado. My conversation with Mercer Advisors Dave Wellen

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Speaker 1: vis is Masters in Business with Barry Ridholts on Bloomberg Radio.

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Speaker 1: My special guest this week is Dave Welling. He is

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Speaker 1: the CEO of Mercer Advisors, a Denver based r i

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Speaker 1: A with four hundred employees and over twenty one billion

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Speaker 1: dollars in assets under management. Dave Welling, Welcome to Bloomberg.

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Speaker 1: Barry is great to be here, looking forward to it.

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Speaker 1: So you have a really interesting job history that I

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Speaker 1: want to discuss before we start getting into the details

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Speaker 1: of Welling. You were at Adventance, you were Black Diamond,

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Speaker 1: Charles Schwab Banning Company. Tell us a little bit about

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Speaker 1: your career path. Sure, so, yeah, I think as you're

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Speaker 1: getting that very um maybe not the traditional head of

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Speaker 1: an advisory firm because I didn't start as an advisor,

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Speaker 1: but I spent close to the last thirty years of

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Speaker 1: my life supporting, enabling, and as I call it, clearing

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Speaker 1: the path for advisors. So I was very, very fortunate

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Speaker 1: back in the mid nineties to join Charles Schwab in

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Speaker 1: a really unique role and opportunity. I joined as a

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Speaker 1: chief of staff, which was a completely made up job

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Speaker 1: for one of the vice chairman running the advisor business

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Speaker 1: and the Floral wind Cave business. Actually had a chance

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Speaker 1: to review with Chuck as part of the job. So boy,

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Speaker 1: you know, talk about lucky is a way to enter

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Speaker 1: this industry and do it the right way and learn

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Speaker 1: the right principles. You know, had a had a chance

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Speaker 1: to work down the hall from Chuck and learned from him.

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Speaker 1: But that was that. And prior to that, I had

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Speaker 1: some experiences, but they were in management consulting, and like

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Speaker 1: a lot of management consultants, I dabbled in a lot

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Speaker 1: of industries. I worked in telco, I worked in consumer products,

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Speaker 1: I worked in technology, I worked in across the board,

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Speaker 1: actually worked in the private equity consulting practice of Baning Company,

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Speaker 1: And well, that was an awesome experience and a great

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Speaker 1: foundation for learning business and role. I found myself really

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Speaker 1: longing to find an industry that had a real purpose

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Speaker 1: and to find a company in a place in that

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Speaker 1: industry where you could really innovate, and Schwab became that

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Speaker 1: place for me at the beginning of my career. Obviously,

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Speaker 1: US had some other stops along the way, and I'm

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Speaker 1: sure we'll get to talk about those, But really lucky,

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Speaker 1: I spent twelve years a SUAB through the growth and

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Speaker 1: evolution of that business and to find the independent advisor industry,

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Speaker 1: and I just fell in love with it. You know,

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Speaker 1: there's there's challenges, there's market turbulences, but we we all

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Speaker 1: have this compass, which is the client and doing the

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Speaker 1: right thing for them. So it's been been very, very

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Speaker 1: very good to me over the years. So you you

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Speaker 1: had gone from Bain to Schwab, and after twelve years

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Speaker 1: of Schwab you left to go to Black Diamond, which

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Speaker 1: seems to be like a much more technologically focused, less

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Speaker 1: straight up wealth management company than Schwab. What was that

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Speaker 1: transition like? And did I mistake that it sounds like

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Speaker 1: they're two very different companies in a similar field. Well, yeah,

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Speaker 1: The Black Diamond, for those that don't know, is a

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Speaker 1: technology provider, most notably in web based cloud based development,

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Speaker 1: providing reporting two advisers to help them tell their stories,

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Speaker 1: whether they were managing portfolios or providing a broader wealth

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Speaker 1: management offering like Mercery Advisors does. And I gets similar

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Speaker 1: to the story about financial services I wasn't an engineer either, right,

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Speaker 1: I wasn't didn't grow up as a developer. I just

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Speaker 1: really understood the space and understood what advisors did. And

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Speaker 1: that was two thousand nine, so heels of the financial crisis,

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Speaker 1: I decided it was the right time to leave SWAB,

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Speaker 1: picked my family up from the San Francisco Bay Area

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Speaker 1: and joined a technology company in northeastern Florida. All of

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Speaker 1: my friends in the Bay area thought I was completely

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Speaker 1: nuts for leaving the safety and security of a big company.

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Speaker 1: Even despite the difficulties we were having, I was. I

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Speaker 1: was doing very well there. I was continuing to grow

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Speaker 1: and get be given more responsibilities. But I had this

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Speaker 1: idea that I wanted to get involved in technology. I

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Speaker 1: really felt like today, but especially at that time in

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Speaker 1: two thousand nine, the technology was going to be part

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Speaker 1: of solving the challenges that are industry based and the

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Speaker 1: consumers were clamoring for. So I had this this meta

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Speaker 1: investment pieces, if you will, that technology was going to

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Speaker 1: move from the back office to the front office, as

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Speaker 1: we talked about in advisory firms, and help advisors run

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Speaker 1: their businesses more efficiently with more scale, ill and more consistency.

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Speaker 1: But also give the consumer what they were demanding, which

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Speaker 1: was more transparency. At that time, I think, as you

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Speaker 1: know and might might even remember, it was very dynamic time.

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Speaker 1: Consumers wanted to know how they were doing, where they were,

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Speaker 1: and what Black Diamond did was on a daily basis

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Speaker 1: cheap plus one or next day was able to tell

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Speaker 1: clients at a very granular level how they were doing, uh,

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Speaker 1: not just pulling up the last quarterly performance report which

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Speaker 1: could have been two and a half or three months old,

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Speaker 1: given timing of how those those report out, and be

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Speaker 1: able to tell folks very dynamically. So it was a

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Speaker 1: great opportunity and a risk, if you will, on on

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Speaker 1: one level, but probably the best career decision I ever made.

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Speaker 1: You know, we all faced these opportunities and these these

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Speaker 1: roads that we that we meet in our careers, and

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Speaker 1: that was an opportunity for me to try my hand

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Speaker 1: at something that was much much more entrepreneurial. It was

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Speaker 1: very small when I joined. There's twenty employees, less than

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Speaker 1: two million annual revenues, a good product, but certainly not

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Speaker 1: a big business. So pretty big difference from from a

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Speaker 1: big company with a lot of resources to drop into

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Speaker 1: an environment that was still trying to break through, still

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Speaker 1: try to to get known and develop its footing. And yeah,

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Speaker 1: well I've left that part of my career behind. It

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Speaker 1: was over three years ago when I left that team.

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Speaker 1: There's now more than five people in Northeastern Florida. It's

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Speaker 1: one of the best companies to work for Northeastern Florida.

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Speaker 1: So you very proud of that part of my career heritage.

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Speaker 1: It didn't start that way. Um, but nothing like being

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Speaker 1: thrown into an entrepreneurial situation to figure out whether you've

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Speaker 1: you've got the goods to be able to to bootstrap

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Speaker 1: and do things yourself rather than rely on big, big

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Speaker 1: teams to do things for you. So let's talk about

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Speaker 1: the next entrepreneurial opportunity. Not too long ago, you end

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Speaker 1: up at Mercer Advisors. What was the transition like becoming

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Speaker 1: a CEO of a wealth management firm when you were

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Speaker 1: previously working in what really is a technology company. The

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Speaker 1: transition was was quick and it was a change. I

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Speaker 1: finished work at Black Diamond. At Black Diamond had, over

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Speaker 1: the years, had been acquired by Advent Software, which then

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Speaker 1: in turn had been acquired by SS and C Technology.

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Speaker 1: So I had gone from this small entrepreneurial company who

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Speaker 1: actually was running Advent, which is a international company with

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Speaker 1: offices all over the world as a division of S

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Speaker 1: S and c UM. You know, we're four million annual revenues,

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Speaker 1: you know, thousands of employees. Was with co leader of

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Speaker 1: that business. But I was longing again to get back

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Speaker 1: to something that was a little bit more entrepreneurial and

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Speaker 1: a little bit closer to home in terms of focusing

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Speaker 1: on the advisor business. But I finished work at six

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Speaker 1: pm on a Friday, uh six am the next morning,

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Speaker 1: I was on a plane, and then Sunday night I

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Speaker 1: had dinner with Dave Barton, who was the CEO of

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Speaker 1: Mercer for eight years prior to me joining. And the

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Speaker 1: juncture where Mercer was at the time was growing very

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Speaker 1: quickly organic way, but also had it had an opportunity

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Speaker 1: and interest to to go through some acquisitions and acquire

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Speaker 1: smaller practices of financial planners all over the country who

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Speaker 1: were looking for that solution. Dave went left, meaning Dave

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Speaker 1: jumped into a vice chairman role and started focusing on

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Speaker 1: mergers and acquisitions, and that created an opportunity for me

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Speaker 1: to join the organization and help lead the next chapter.

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Speaker 1: So very different, very different business. Probably the biggest different

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Speaker 1: structurally isn't what you'd think. Um, it's not technology versus

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Speaker 1: wealth management. It's people largely all in one place with

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Speaker 1: a sales teams right around the country, which is technology

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Speaker 1: to Mercer. And we're about four dred and fifty employees

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Speaker 1: today spread across forty five offices or so i'd like

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Speaker 1: to say, forty five leases that we're paying for in

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Speaker 1: different parts of the country. So it's very different to

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Speaker 1: lead a culture that's spread as thin as we are

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Speaker 1: and lead it as one team. So uh different, different

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Speaker 1: transition in that respect to figure out how to land

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Speaker 1: and earn the trust of the team and to leave

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Speaker 1: the organization when we're so dispersed, at least at least

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Speaker 1: physically dispersed. So I want to get to the issue

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Speaker 1: of growing through mergers and acquisitions, but before we go there,

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Speaker 1: I have to stick with two questions about your transition

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Speaker 1: to being CEO. The first one is how does an

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Speaker 1: outsider come into a relatively small, privately held company as

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Speaker 1: a CEO. That sounds like it's a big challenge. Tell

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Speaker 1: us a little bit about that transition. So the history

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Speaker 1: of Mercer is actually pretty unique and you know, my

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Speaker 1: position as CEO comes in after a long history of

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Speaker 1: ownership transition, leadership transition. So Kendrick Mercer, the founder of

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Speaker 1: the business, founded Mercer in We were one of the first,

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Speaker 1: the only financial planning firms in the country. Kendrick, you're

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Speaker 1: very unique guy, passionate about financial planning, but had a

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Speaker 1: lot of other life interests. Made a decision to bring

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Speaker 1: in a partner group early early nineties, brought on five partners.

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Speaker 1: Dave Barton, who I mentioned earlier, was one of those partners.

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Speaker 1: In two thousand and three we brought in our first CEO.

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Speaker 1: So I'm not the first CEO of the business, but

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Speaker 1: for a kind of transition of CEO as if you will.

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Speaker 1: And the interesting thing about Mercer when you look at

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Speaker 1: what's happening in our industry is we made this transition

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Speaker 1: from a single founder to a partnership, a partnership to

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Speaker 1: a CEO mandate to outside capital investments in private private equity.

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Speaker 1: So when we talk about mergers and acquisition, Mercer has

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Speaker 1: been down a lot of these paths. Um We've evaluated

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Speaker 1: the options and decisions at different junctures of our history.

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Speaker 1: Because we've been around for so long we've made those

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Speaker 1: decisions over the years. So my entry is CEO. Came

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Speaker 1: into a business that was used to having a CEO,

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Speaker 1: also had a lot of outside capital, and as I'm

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Speaker 1: sure you know, really important part of the CEO is

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Speaker 1: not just leading the business, but managed the investor base

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Speaker 1: as well of keeping them confident and comfortable and to

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Speaker 1: be able to pass pass the business forward. What was

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Speaker 1: tricky for me at the time of entering the business

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Speaker 1: and was to get the team to know me. So

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Speaker 1: the very first thing that I did was certainly not

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Speaker 1: sitting headquarters and try and do planning. I got on

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Speaker 1: a plane. At that time, we certainly could do that,

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Speaker 1: it's much unfortunately we can't do it now. And I

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Speaker 1: went to visit every single office. UM sat with the

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Speaker 1: team's talk to them about what was working, what was

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Speaker 1: not working, what they thought we should do to move forward.

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Speaker 1: The best thing I ever did because it both connected

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Speaker 1: me to the culture and team and inversely helped the

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Speaker 1: team understand who I was and where I was coming from.

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Speaker 1: Very interesting. So in the firm was under ten billion dollars.

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Speaker 1: Today you're over billion dollars. That's not that long a

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Speaker 1: time to more than Dublin size. Was that your vision

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Speaker 1: from day one to begin acquiring other advisory shops. How

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Speaker 1: did this approach come about? Yeah, I guess it was

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Speaker 1: certainly part of our most recent history. But the vision

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Speaker 1: and purpose of the organization is to help clients and

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Speaker 1: help them on their path the economic freedom. So, as

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Speaker 1: we talked about a little earlier, the firm has been

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Speaker 1: around thirty five years and we've only been doing acquisitions

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Speaker 1: over the last four. What what had happened over the

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Speaker 1: first thirty plus years is the business had grown to

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Speaker 1: be a national firm. We had eighteen offices all around

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Speaker 1: the country. We're about six billion at that time prior

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Speaker 1: to doing our first acquisition, and we had gone through

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Speaker 1: the work and figured out that working as eighteen different

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Speaker 1: teams wasn't going to work. We had a centralized investment team,

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Speaker 1: a common client experience. We had built our state planning

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Speaker 1: team and tax team. We had built the set of

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Speaker 1: services that we provide our clients, and had built a

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Speaker 1: culture of working together despite being because we separated across

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Speaker 1: those eighteen offices, and what we found was there was

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Speaker 1: both interest in an opportunity for other firms who were

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Speaker 1: like minded to join us. To get access to that

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Speaker 1: set of services and capabilities. And you know, in this

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Speaker 1: this industry, there's a lot of great professionals out there,

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Speaker 1: a lot of great independent investment advisors out there who

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Speaker 1: work as true fiduciaries that they have small practices. It's

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Speaker 1: a very fragmented interest industry, and some of those principles

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Speaker 1: that were at one time entrepreneurs had evolved from entrepreneurs

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Speaker 1: to starting to think about their retirement and they were

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Speaker 1: looking for a place to put their practice, put their business,

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Speaker 1: put their clients in the hands of a firm that

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Speaker 1: had shared interests, shared beliefs, and the shared value system.

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Speaker 1: So it was this coming together of Mercer having an

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Speaker 1: appetite to grow and ability to grow, a desire to grow,

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Speaker 1: but also huge, huge demand from firms that were it's

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Speaker 1: like Mercer, We've acquired businesses that, while there are a

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Speaker 1: lot smaller, have also been around for thirty years and

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Speaker 1: some of the first the only financial planning firms in

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Speaker 1: the country. And what's different about acquisitions in in our

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Speaker 1: industry and our space and in this context is those

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Speaker 1: sellers are looking for much more than a transaction and

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Speaker 1: evaluation of their business. That's what I saw on technology.

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Speaker 1: You see it all the time when Amazon biased companies

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Speaker 1: or Google buas companies. You know they're buying the technology

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Speaker 1: they want the engineers. But it's very different than this industry. Uh.

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Speaker 1: These are for people who set out on their own,

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Speaker 1: have been running their own business for twenty years. It's

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Speaker 1: it's their life's work, and they're not going to put

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Speaker 1: their clients into a bad investment. And they're not going

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Speaker 1: to put their clients into a situation where the firm

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Speaker 1: that's that's taking over the business and becoming their sucception

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Speaker 1: plan for them doesn't share the same values and beliefs

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Speaker 1: and systems. So I think what is really propelled our

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Speaker 1: our acquisitions strategy is a combination of two things. One,

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Speaker 1: we've done quite a few of them. By the time

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Speaker 1: we finished this year, we will have done over forty

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Speaker 1: acquisitions in four years, so over ten a year on average.

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Speaker 1: And the second is all those firms believing their clients

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Speaker 1: are going to be better served after easy example, and

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Speaker 1: I think we might talk about this later. We have

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Speaker 1: a dedicated a state planning team and a dedicated tax team.

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Speaker 1: Not just g p a s and lawyers who are

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Speaker 1: practicing advisors. You have dedicated teams that all they do

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Speaker 1: is put together a state plans for clients, and those

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Speaker 1: are often huge uptick services for for clients in this context,

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Speaker 1: so the sellers see, hey, this is not just good

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Speaker 1: for me, this is going to be a good solution

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Speaker 1: for my clients. So I want to discuss the various

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Speaker 1: wealth management services mercer offers in a few minutes. Let's

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Speaker 1: focus now on the merger and acquisition process. You guys

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Speaker 1: have completed forty in four years. That that's quite a

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Speaker 1: robust number. Tell us a little bit about your pro says,

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Speaker 1: how do you find companies to acquire? Are you looking

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Speaker 1: for them? Do they come to you? Give us a

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Speaker 1: little uh, behind the scenes explanation as to what this

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Speaker 1: process is like. Yeah, there's a there's obviously a courtship process. Right,

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Speaker 1: There's there's a do we like them and do they

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Speaker 1: like us? Process, which picks up on the common I

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Speaker 1: may before and maybe we can come back what happens after, Right,

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Speaker 1: it's the the consummation, the acquisition itself, the closing date.

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Speaker 1: That's just a mile post on the building of a

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Speaker 1: broader relationship. But focusing on on before that mile post,

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Speaker 1: the more acquisitions we've done, the more people find their

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Speaker 1: way to us because we have now become a known

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Speaker 1: option that has a certain value proposition. Right, so we

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Speaker 1: we are, as I call it, an integrator, not an aggregator.

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Speaker 1: We're going to become one business, one integrated client experience.

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Speaker 1: That's very appealing not just to our shareholders and from

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Speaker 1: a business perspective, it's it's very relevant to the context

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Speaker 1: of some of the situations where we find sellers that

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Speaker 1: are looking for a succession plan or a place to

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Speaker 1: transition their practice or their business. We're very active in

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Speaker 1: the industry. My involvement in the industry for thirty plus years.

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Speaker 1: I've probably been in a thousand different advice for offices

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Speaker 1: around the country over the years, just physical offices. So

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Speaker 1: those relationships are really helpful because we're not starting from scratch.

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Speaker 1: There's some prior intersection. It may have been several years

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Speaker 1: where firms that I've known, principles that I've known over

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Speaker 1: the years, that I've had the fortune to build a

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Speaker 1: relationship with and helping them build that business or just

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Speaker 1: be on the be on the sidelines cheering for them.

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Speaker 1: UM is very relevant to the meeting and greeting part

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Speaker 1: of it. But once we kind of get the conversation going, UM,

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Speaker 1: we believe in a really rich interface of dialogue between

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Speaker 1: our firm and their firm. The best the best context

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Speaker 1: is there's several people deep in our our firm and

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Speaker 1: several people deep in theres who are talking to each other,

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Speaker 1: not about the valuation of the transaction. That's probably less

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Speaker 1: than five percent of the content. It's important, but it's

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Speaker 1: relatively straightforward, UM, and a place to land on whether

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Speaker 1: you're going to have a similar sense of what the

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Speaker 1: value the business is. The most important part is how

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Speaker 1: are we going to be better together than we were apart?

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Speaker 1: What is this going to be like for clients? UM?

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Speaker 1: What tools are in the tool chest both at mercer

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Speaker 1: or in the business that we're acquiring. We've acquired several

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Speaker 1: practices that have not just a wealth management firms that

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Speaker 1: had dedicated accounting teams themselves, right, So that's been really

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Speaker 1: appealing for us to build our tax business, build our

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Speaker 1: expertise in our tax business, and for them to know

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Speaker 1: the acquirer really believed in having that part of the business,

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Speaker 1: because not everybody in our industry really wants that to

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Speaker 1: be part of their core service. Offering, so uh that

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Speaker 1: that's you know, the rich interface. So by the time

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Speaker 1: we get to okay that we're going to do the

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Speaker 1: this acquisition and they closed a we have mutual clarity

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Speaker 1: on what we're trying to create together. We have a

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Speaker 1: vision of how things are to come together at a

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Speaker 1: pretty granular level. Um and you know, one of the

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Speaker 1: things that we didn't touch on earlier in my experience

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Speaker 1: when I was at Black Diamond. Black Diamond was bought

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Speaker 1: by by Advent. Advent was a public company, it was

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Speaker 1: bought by a se and given the scale of those transactions,

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Speaker 1: but mostly employees found out about it on a random Tuesday,

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Speaker 1: and then we were scrambling to figure out what the

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Speaker 1: strategy was and how the pieces were going to sit together.

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Speaker 1: We have an opportunity in the context of these acquisitions

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Speaker 1: to do a lot of work up front to make

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Speaker 1: sure that the uncertainty that that can be there in

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Speaker 1: these transitions is really limited to the uncertainty for clients

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Speaker 1: and uncertainty for employees, because we say, well, this is

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Speaker 1: going to look like and this is how it's going

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Speaker 1: to work. Huge opportunity and that that helps people feel

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Speaker 1: really confident when when they make these decisions. So under

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Speaker 1: normal circumstances, there's a lot of neat and great, there's

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Speaker 1: a lot back and forth. But obviously these are not

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Speaker 1: normal circumstances. How do you do these sorts of deals

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Speaker 1: that require a little bit of staring each other in

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Speaker 1: the eye and making sure everybody is comfortable with each

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Speaker 1: other during a pandemic where we're kind of limited to

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Speaker 1: zoom and not person in person meetings. What what's it

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Speaker 1: been like this year? Yeah, there's no question it's a

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Speaker 1: lot harder, right, Um, I think you know the the

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Speaker 1: uptick people look at the disadvantages, right, this is a

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Speaker 1: at its core, this is a kneecapped to kneecap business.

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Speaker 1: That's how advisors build their relationships with clients, particularly at

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Speaker 1: the beginning, and this bond of trust that needs to

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Speaker 1: form over an extended period of time of delivering value

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Speaker 1: is just as true in this context of acquisitions as

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Speaker 1: it is in the context of an advisor working with

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Speaker 1: our clients. And I'm sure many of your listeners that

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Speaker 1: will resonate with them. But what's been really interesting about

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Speaker 1: using zoom in the technology, It's actually enabled us to

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Speaker 1: have a much quicker cadence and to have more people

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Speaker 1: from the firms are requiring be engaged in the process,

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Speaker 1: and more people engaged on the Mercer team. We just

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Speaker 1: did a call yesterday morning that went three hours with

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Speaker 1: with the firm that's going to be joining us at

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Speaker 1: the end of the year, and we had eight people

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Speaker 1: from the Mercer team coming in in different time segments

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Speaker 1: talking about how they're the employee benefits are gonna work,

396
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Speaker 1: how the investment mapping is going to work, how our

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Speaker 1: state planning team is going to work. That would have

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Speaker 1: been hard for us to do in a different context

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Speaker 1: to fly eight people from Mercer across the country, get

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Speaker 1: all their employees in our one room and do that

401
00:22:41,359 --> 00:22:43,919
Speaker 1: um do that together. We we have a team and

402
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Speaker 1: have always done that, but it's interesting where we've been

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Speaker 1: able to engage multiple people and then there's some follow

404
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Speaker 1: up questions, so we we get back on the phone

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Speaker 1: right and get the zoom back from fired back up.

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Speaker 1: So I think our industry is wrestling with what is

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Speaker 1: life look like affort with all this technology. I think

408
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Speaker 1: we found that that it actually can be really enriching

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Speaker 1: and help pick up the cadence and avoid the scheduling

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Speaker 1: of where we're gonna fly across country to meet each other. UM.

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Speaker 1: I think we would love to add that back in.

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Speaker 1: But there's there's a real learning here for us as

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Speaker 1: an industry about how how the technology can help support

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Speaker 1: these relationships and conversations on a much quicker cadence UM

415
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Speaker 1: and involve more people where it's it's only an hour

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Speaker 1: investment of their time. You go right at the questions

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Speaker 1: that they have UM and address it. And if you're

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Speaker 1: you need somebody to come in because something comes up,

419
00:23:32,840 --> 00:23:36,199
Speaker 1: somebody can join join the session live rather than have

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Speaker 1: to jump on a plane and five clush country. So

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Speaker 1: I think a little bit surprised about how well it's gone,

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Speaker 1: a little bit of lemonade out of the pandemic, to

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Speaker 1: say the least. So in a previous conversation I discussed

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Speaker 1: the sort of multiples that that we've seen in the

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Speaker 1: industry with Peter Maluke of Creative Planning, and he pointed

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Speaker 1: out that things started out fairly and expensively, but there's

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Speaker 1: just such a wash of private equity money and with

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00:24:06,080 --> 00:24:09,400
Speaker 1: yields as low as they are, well run advisory firms

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Speaker 1: are very similar to a bond and that they throw

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Speaker 1: off a pretty decent yield with a very modest amount

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Speaker 1: of risk. What are you seeing in terms of multiples?

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Speaker 1: Have prices for advisory firms gotten out of hand or

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Speaker 1: or things a little more reasonable this year? Given all

434
00:24:28,000 --> 00:24:32,280
Speaker 1: the experience we've had with remote work and the pandemic,

435
00:24:32,880 --> 00:24:34,600
Speaker 1: this is one of the things where it has it

436
00:24:34,720 --> 00:24:38,560
Speaker 1: tastes been around this industry for quite a while, right, So,

437
00:24:39,720 --> 00:24:44,480
Speaker 1: having seen acquisitions, having seen how outside capital thinks about

438
00:24:44,480 --> 00:24:47,600
Speaker 1: our industry, I think there's some things happening that are

439
00:24:47,600 --> 00:24:50,280
Speaker 1: actually quite fundamental, you know. I think I think Peter's right,

440
00:24:50,400 --> 00:24:53,480
Speaker 1: you know, valuations, you're going up the right your your question.

441
00:24:53,880 --> 00:24:55,760
Speaker 1: But I think what's happening is people are starting to

442
00:24:55,800 --> 00:24:59,600
Speaker 1: realize the value. Right, So, who an independent are a

443
00:24:59,600 --> 00:25:02,600
Speaker 1: a is is? And why that's different than a wirehouse broker.

444
00:25:02,960 --> 00:25:05,360
Speaker 1: What does it really mean to be a fiduciary? There's

445
00:25:05,400 --> 00:25:08,879
Speaker 1: obviously been a huge narrative in our industry about the

446
00:25:08,880 --> 00:25:12,199
Speaker 1: poduciary standards and the importance of that. Still shocking to

447
00:25:12,320 --> 00:25:15,640
Speaker 1: me that not every advisor working with clients isn't required

448
00:25:15,680 --> 00:25:18,760
Speaker 1: to be a fiduciary. We of course are your firm

449
00:25:18,840 --> 00:25:22,000
Speaker 1: and and are, but that's not the way the rest

450
00:25:22,040 --> 00:25:24,280
Speaker 1: of our industry is so people are learning that. From

451
00:25:24,280 --> 00:25:29,000
Speaker 1: a business perspective, I think the outside capital who's really

452
00:25:29,040 --> 00:25:32,440
Speaker 1: starting to learn that these are quality businesses, very high retention,

453
00:25:32,920 --> 00:25:36,359
Speaker 1: very high recurring cash flow. Why because the advisors do

454
00:25:36,440 --> 00:25:38,320
Speaker 1: good work and the clients like it and they tell

455
00:25:38,359 --> 00:25:40,960
Speaker 1: more people about it. Right, So in a cash flow

456
00:25:41,040 --> 00:25:44,520
Speaker 1: business and a service business, for an outside investor, that's

457
00:25:44,520 --> 00:25:47,879
Speaker 1: a little hard sometimes to wrap your head around until

458
00:25:47,960 --> 00:25:50,959
Speaker 1: you see the patterns of success over a sustained period

459
00:25:51,000 --> 00:25:55,399
Speaker 1: of time. So what's happening in our industry, I think

460
00:25:55,600 --> 00:26:00,480
Speaker 1: is is the outside capital in particular final starting to

461
00:26:00,520 --> 00:26:05,240
Speaker 1: recognize the value of this industry most fundamentally in terms

462
00:26:05,240 --> 00:26:08,520
Speaker 1: of the value it provides the consumer and how this

463
00:26:08,640 --> 00:26:11,840
Speaker 1: industry continues to grow and how these businesses continue to grow.

464
00:26:11,880 --> 00:26:14,159
Speaker 1: So that's a that's a big y, right when you

465
00:26:14,160 --> 00:26:17,159
Speaker 1: look at macro versus micro trends. Now you come into

466
00:26:17,640 --> 00:26:19,719
Speaker 1: micro trends, you're you get to a little bit more

467
00:26:19,760 --> 00:26:22,679
Speaker 1: about what Peter may have been talking about, which is

468
00:26:22,800 --> 00:26:26,639
Speaker 1: there's a lot of well financed, purposeful buyers like Mercer

469
00:26:26,760 --> 00:26:30,600
Speaker 1: and others that are interested in investing in the space.

470
00:26:30,680 --> 00:26:34,720
Speaker 1: You have sellers who are interested in a transition for

471
00:26:34,760 --> 00:26:37,919
Speaker 1: their clients, as I said earlier, a transition that feels

472
00:26:37,960 --> 00:26:41,080
Speaker 1: like they're putting them in a home that's similar or

473
00:26:41,119 --> 00:26:44,320
Speaker 1: the same in terms of values and offering that they've

474
00:26:44,320 --> 00:26:47,560
Speaker 1: built up over the years. Uh. And you get a

475
00:26:47,600 --> 00:26:52,320
Speaker 1: lot more interest in this space. But fundamentally, um, you know,

476
00:26:52,359 --> 00:26:55,760
Speaker 1: it's a good investment for us. You know, acquisitions we do,

477
00:26:56,240 --> 00:27:01,720
Speaker 1: we average retention for years after the fact, even in

478
00:27:02,000 --> 00:27:05,800
Speaker 1: years after principle may be retired. And I was on

479
00:27:05,840 --> 00:27:08,199
Speaker 1: the phone and I mentioned that stat too. You know

480
00:27:08,240 --> 00:27:10,679
Speaker 1: one of firms who recently sold the business that I

481
00:27:10,720 --> 00:27:14,200
Speaker 1: basically Mercer didn't screw things up right, and we added

482
00:27:14,240 --> 00:27:18,080
Speaker 1: some value, but fundamentally that's what the business was before

483
00:27:18,119 --> 00:27:21,360
Speaker 1: we BoNT it. So that's that's why these things are

484
00:27:21,480 --> 00:27:25,800
Speaker 1: interesting where Mercer really can add values in expanding the

485
00:27:25,880 --> 00:27:28,600
Speaker 1: services for those clients to the clients are experiencing more

486
00:27:28,680 --> 00:27:31,960
Speaker 1: value and we're often able to get growth turned back

487
00:27:32,080 --> 00:27:34,800
Speaker 1: on in a business that maybe grew at one time,

488
00:27:34,840 --> 00:27:37,880
Speaker 1: but over the last few years maybe had slowed significantly

489
00:27:37,880 --> 00:27:42,480
Speaker 1: on growth. Um from a market perspective, but I think, yes, yes,

490
00:27:42,560 --> 00:27:45,439
Speaker 1: valuations are going up, but that's because there's value and

491
00:27:45,480 --> 00:27:48,199
Speaker 1: people are starting to recognize it. So I have a

492
00:27:48,240 --> 00:27:51,399
Speaker 1: bunch of more questions about this space on culture and

493
00:27:51,480 --> 00:27:55,679
Speaker 1: lessons and the role of Barton as former CEO and

494
00:27:55,720 --> 00:27:58,199
Speaker 1: now your head of M and A. But before I

495
00:27:58,280 --> 00:28:01,679
Speaker 1: go there, I have to ask how important is private

496
00:28:01,720 --> 00:28:05,600
Speaker 1: equity to these deals? How are they usually structured? Is

497
00:28:05,640 --> 00:28:09,320
Speaker 1: it part cash, part turnout over time? What do these

498
00:28:09,359 --> 00:28:13,480
Speaker 1: look like? Sure? So you know, deal structures evolved in

499
00:28:13,520 --> 00:28:15,560
Speaker 1: the industry, and you know, people like to say the

500
00:28:15,560 --> 00:28:19,080
Speaker 1: market sex prices and the market set the deal structure too.

501
00:28:19,240 --> 00:28:23,000
Speaker 1: We talked about valuation, but but you know, structure is

502
00:28:23,080 --> 00:28:26,760
Speaker 1: just as important, um, I would say as the actual valuation.

503
00:28:27,359 --> 00:28:30,960
Speaker 1: So you know, I think the structures vary, but usually

504
00:28:31,040 --> 00:28:34,840
Speaker 1: there's a significant amount of cash or capital up front. Uh,

505
00:28:34,880 --> 00:28:38,040
Speaker 1: there's there's some in and turn out to make sure

506
00:28:38,120 --> 00:28:41,720
Speaker 1: the business transitions well on retention stays in place, so

507
00:28:42,080 --> 00:28:45,720
Speaker 1: that affilllates over time from maybe sixty percent up front

508
00:28:45,760 --> 00:28:51,120
Speaker 1: and in and turnout focused around focused around retention and

509
00:28:51,280 --> 00:28:55,720
Speaker 1: effective transition to the business. So that's that's from a

510
00:28:55,800 --> 00:29:01,520
Speaker 1: structural standpoint. We provide opportunity for people to to have

511
00:29:01,640 --> 00:29:05,560
Speaker 1: equity immerser. We have the opportunity actually for every employee

512
00:29:05,560 --> 00:29:08,600
Speaker 1: of the company to buy into the company. So that's

513
00:29:09,000 --> 00:29:11,560
Speaker 1: may sound strange given the fact that we have private

514
00:29:11,560 --> 00:29:15,880
Speaker 1: equity investors, but really important, you know, and I think,

515
00:29:16,160 --> 00:29:18,520
Speaker 1: you know, we maybe unpack the private equity piece a

516
00:29:18,560 --> 00:29:22,360
Speaker 1: little bit fundamentally what what private equity ownership does for

517
00:29:22,520 --> 00:29:25,240
Speaker 1: us and being a person that that is leading a

518
00:29:25,280 --> 00:29:29,160
Speaker 1: business that's had private equity involvement since since you know

519
00:29:29,720 --> 00:29:32,960
Speaker 1: the two thousand eight right was was our our first

520
00:29:32,960 --> 00:29:37,120
Speaker 1: private equity investment. It is made the CEO C in

521
00:29:37,160 --> 00:29:41,080
Speaker 1: the business accountable to become what we're capable of becoming. Right,

522
00:29:41,160 --> 00:29:43,960
Speaker 1: So I am accountable to the board. If I don't

523
00:29:44,000 --> 00:29:46,800
Speaker 1: do my job, well, um, I can be fired or

524
00:29:46,880 --> 00:29:49,040
Speaker 1: let go And and fundamentally I think that's good for

525
00:29:49,080 --> 00:29:52,440
Speaker 1: employees and good for the clients. Right, which is you know,

526
00:29:52,600 --> 00:29:55,600
Speaker 1: is this is this business delivering on its promise to

527
00:29:55,600 --> 00:29:58,200
Speaker 1: to its clients and if it's not, you know what

528
00:29:58,320 --> 00:30:00,840
Speaker 1: responsibility is the CEO? Who for that? So I think

529
00:30:00,920 --> 00:30:02,800
Speaker 1: I think people miss that they just talk about it

530
00:30:02,840 --> 00:30:05,560
Speaker 1: as as capital and actually think about it more as

531
00:30:05,560 --> 00:30:11,320
Speaker 1: accountability and and responsibility and something for the business to

532
00:30:11,320 --> 00:30:15,040
Speaker 1: to become what it's capable of coming. Quite quite interesting.

533
00:30:15,480 --> 00:30:20,240
Speaker 1: Let's stick with this space and discuss the corporate culture.

534
00:30:20,680 --> 00:30:24,640
Speaker 1: How do you, as CEO, maintain a corporate culture when

535
00:30:25,360 --> 00:30:29,520
Speaker 1: first everybody is in far flung locations and forty five

536
00:30:29,920 --> 00:30:33,200
Speaker 1: separate offices. We we do something similar on a smaller scale.

537
00:30:33,600 --> 00:30:38,120
Speaker 1: And second, you're adding new bodies, new organizations, and new

538
00:30:38,920 --> 00:30:42,440
Speaker 1: people to a company that might have had a somewhat

539
00:30:42,480 --> 00:30:47,000
Speaker 1: different prior culture. How do you integrate all of that? Yeah,

540
00:30:47,080 --> 00:30:50,080
Speaker 1: I think when we're we just talked about acquisition, the

541
00:30:50,480 --> 00:30:54,680
Speaker 1: first test is really culture. Right, So there's culture, there's strategy,

542
00:30:54,760 --> 00:30:57,800
Speaker 1: and then there's financials. So it needs to make cultural

543
00:30:57,880 --> 00:31:01,680
Speaker 1: sense and strategic sense before you even bother talking about

544
00:31:01,880 --> 00:31:06,480
Speaker 1: valuation of the business. So fortunately, we focused on buying

545
00:31:06,480 --> 00:31:10,200
Speaker 1: financial planning firms. We focused on buying firms who believe

546
00:31:10,240 --> 00:31:13,840
Speaker 1: and operate under the fiduciary standards UM, and we focused

547
00:31:13,880 --> 00:31:17,560
Speaker 1: on firms who have a similar but not maybe always

548
00:31:17,600 --> 00:31:23,160
Speaker 1: identical investment philosophy, but but investment philosophy that's rooted as

549
00:31:23,200 --> 00:31:26,320
Speaker 1: an outcome of the financial plan rather than in alpha

550
00:31:26,360 --> 00:31:30,720
Speaker 1: shop focusing on a particular sleeve or sector or or

551
00:31:30,760 --> 00:31:34,600
Speaker 1: investments type. So UM that's really important because you're starting

552
00:31:34,640 --> 00:31:37,600
Speaker 1: from a place where there's there's good cultural alignment in

553
00:31:37,680 --> 00:31:40,960
Speaker 1: terms of values, principles and a belief in how the

554
00:31:41,040 --> 00:31:45,240
Speaker 1: client could be served. So when we're spread all across

555
00:31:45,240 --> 00:31:48,760
Speaker 1: the country, the immersioner for years did a big annual event,

556
00:31:49,000 --> 00:31:51,480
Speaker 1: and you know, as we got bigger, the event got bigger.

557
00:31:52,200 --> 00:31:56,000
Speaker 1: We broke from that over two years ago and started

558
00:31:56,040 --> 00:31:58,480
Speaker 1: doing a lot of smaller events. We were just growing

559
00:31:58,520 --> 00:32:03,120
Speaker 1: so quickly that we could add fifty sixty employees in

560
00:32:03,360 --> 00:32:06,280
Speaker 1: three months after the event happened. I think the biggest

561
00:32:06,280 --> 00:32:10,760
Speaker 1: annual event happened. So we moved the corporate headquarters back

562
00:32:10,760 --> 00:32:14,400
Speaker 1: in the beginning of eighteen out at California to Denver, Colorado.

563
00:32:15,040 --> 00:32:17,800
Speaker 1: Part of the purpose of that was to be central Um.

564
00:32:17,840 --> 00:32:20,520
Speaker 1: We called it not headquarters, we call it Central Hub.

565
00:32:21,160 --> 00:32:25,720
Speaker 1: And in non COVID pandemic years, we would hold close

566
00:32:25,760 --> 00:32:29,480
Speaker 1: to thirty different pier sessions in the Hub where people

567
00:32:29,520 --> 00:32:32,320
Speaker 1: would come in meet their peers from other offices around

568
00:32:32,360 --> 00:32:35,120
Speaker 1: the country. So we wouldn't take the Santa Barbara team

569
00:32:35,160 --> 00:32:37,000
Speaker 1: and bring the Santa barbar team in. We'd take all

570
00:32:37,000 --> 00:32:40,520
Speaker 1: the financial planners and get them talking to their peers,

571
00:32:40,560 --> 00:32:45,920
Speaker 1: and that that helped foster the cultural cultural connection. Coincidentally,

572
00:32:45,960 --> 00:32:48,920
Speaker 1: this is a play from the Bin playbook. In a

573
00:32:49,000 --> 00:32:51,040
Speaker 1: Bin and a Company, where I work at offices all

574
00:32:51,080 --> 00:32:54,480
Speaker 1: over the world, they take consultants at each rank, and

575
00:32:54,560 --> 00:32:57,080
Speaker 1: they take new managers from all over the world, and

576
00:32:57,120 --> 00:33:00,560
Speaker 1: you'd build relationships with people working other parts of the

577
00:33:00,600 --> 00:33:02,920
Speaker 1: world who maybe could be helpful for you as you

578
00:33:03,000 --> 00:33:06,520
Speaker 1: got to a project later. So that was really helpful

579
00:33:06,800 --> 00:33:09,000
Speaker 1: in helping build a culture. We also have a number

580
00:33:09,000 --> 00:33:14,680
Speaker 1: of programs and initiatives, including our Investors Program, employee resource

581
00:33:14,720 --> 00:33:17,720
Speaker 1: groups that write different kinds that allow employees an opportunity

582
00:33:17,800 --> 00:33:22,959
Speaker 1: to engage with peers and individuals who who maybe not

583
00:33:23,000 --> 00:33:24,760
Speaker 1: only are in the same position, but care about the

584
00:33:24,760 --> 00:33:27,880
Speaker 1: same things that they care about. UM, that's been that's

585
00:33:27,880 --> 00:33:31,600
Speaker 1: been really productive in amportment. In the pandemic, we've had

586
00:33:31,600 --> 00:33:34,120
Speaker 1: to work a lot harder. All of us are trying

587
00:33:34,120 --> 00:33:37,120
Speaker 1: to figure out how to do those things virtually. UM,

588
00:33:37,160 --> 00:33:39,560
Speaker 1: it has to be much more purposeful. I think there

589
00:33:39,560 --> 00:33:42,600
Speaker 1: were things that in non vandemic time that could be

590
00:33:42,720 --> 00:33:46,200
Speaker 1: organic and a little bit free form. But we've we've

591
00:33:46,240 --> 00:33:49,720
Speaker 1: evolved to a state where we're doing virtual happy hours,

592
00:33:49,840 --> 00:33:53,880
Speaker 1: we're doing sessions where people are making Christmas cookies together

593
00:33:54,200 --> 00:33:57,640
Speaker 1: or holiday celebrations together, depending on their faith. So it's

594
00:33:57,680 --> 00:34:01,200
Speaker 1: it's been it's been purposeful, a little bit more centrally

595
00:34:01,200 --> 00:34:04,360
Speaker 1: coordinated to remind people that this is an important part

596
00:34:04,360 --> 00:34:07,240
Speaker 1: of building our culture. Um. So you know, as you

597
00:34:07,280 --> 00:34:09,960
Speaker 1: talk about acquisitions, you know, I can touch on that briefly.

598
00:34:10,520 --> 00:34:13,760
Speaker 1: You know, I think we have similar origin stories and beliefs,

599
00:34:13,800 --> 00:34:17,480
Speaker 1: but we it's important for us to recognize that we

600
00:34:17,560 --> 00:34:22,480
Speaker 1: are this tapestry of of different businesses that have different

601
00:34:22,480 --> 00:34:29,560
Speaker 1: origin stories. So people sometimes confuse culture with norms and

602
00:34:29,719 --> 00:34:35,480
Speaker 1: habits and traditions, right, So traditions are are important parts

603
00:34:35,480 --> 00:34:38,640
Speaker 1: of a culture, sure, but fundamentally we think about it

604
00:34:38,680 --> 00:34:42,799
Speaker 1: as principles and have people be willing to adapt and

605
00:34:42,840 --> 00:34:45,000
Speaker 1: not just adapt to the mercer way. We we adopt

606
00:34:45,000 --> 00:34:48,920
Speaker 1: practices at firms that we acquire, so you in some

607
00:34:48,960 --> 00:34:52,640
Speaker 1: ways preserve, recognize and celebrate the heritage that was the

608
00:34:52,640 --> 00:34:55,279
Speaker 1: way there some of the businesses that have joined us

609
00:34:55,320 --> 00:34:59,560
Speaker 1: as well. Very interesting and my final question on the

610
00:34:59,680 --> 00:35:02,400
Speaker 1: M and A practice, there had to be some interesting

611
00:35:02,480 --> 00:35:06,920
Speaker 1: lessons you've picked up along the way doing forty acquisitions

612
00:35:06,920 --> 00:35:09,399
Speaker 1: in just a few short years. What did you learn

613
00:35:09,480 --> 00:35:12,279
Speaker 1: what are some of the pitfalls to be avoided. Yeah,

614
00:35:13,080 --> 00:35:15,520
Speaker 1: So I'm an analogy guy and the one that I'll

615
00:35:15,600 --> 00:35:17,880
Speaker 1: use here and like to use his paddle boarding. Right.

616
00:35:17,960 --> 00:35:19,840
Speaker 1: So I used to live in Florida when I was

617
00:35:19,840 --> 00:35:22,720
Speaker 1: working at Black Diamond, and we lived on the ocean,

618
00:35:22,760 --> 00:35:24,399
Speaker 1: and I had a paddle board. Right. So if you've

619
00:35:24,520 --> 00:35:27,040
Speaker 1: even if you've done it on vacation, you know, you

620
00:35:27,040 --> 00:35:28,520
Speaker 1: get out on a paddle board and you get in

621
00:35:28,560 --> 00:35:30,200
Speaker 1: the shop, and you get in the waves, and you

622
00:35:30,239 --> 00:35:33,120
Speaker 1: see people kind of stand still and try and get

623
00:35:33,160 --> 00:35:36,359
Speaker 1: their balance. Um. And anybody who's been on a paddle board,

624
00:35:36,400 --> 00:35:38,880
Speaker 1: whether it's just you know, on a vacation or is

625
00:35:38,880 --> 00:35:41,040
Speaker 1: actually owned one like I did, you know, the best

626
00:35:41,080 --> 00:35:42,759
Speaker 1: way to keep your balance at a paddle board is

627
00:35:42,800 --> 00:35:46,200
Speaker 1: to get it moving, right, So momentum plus having the

628
00:35:46,239 --> 00:35:50,080
Speaker 1: paddle in the water are critical to keeping stability. So

629
00:35:50,160 --> 00:35:54,400
Speaker 1: I think you know, early on we tried to go

630
00:35:54,560 --> 00:35:57,560
Speaker 1: very slow. We had this phrase of quote, do no harm,

631
00:35:58,120 --> 00:36:01,680
Speaker 1: and unfortunately, do no harm maybe started to turn into

632
00:36:01,719 --> 00:36:05,080
Speaker 1: doing no good. We weren't on the same systems together.

633
00:36:05,640 --> 00:36:09,560
Speaker 1: We hadn't set up the umbilical cord to connect people

634
00:36:09,600 --> 00:36:11,880
Speaker 1: with our estate planning team and tax team which were

635
00:36:11,880 --> 00:36:15,080
Speaker 1: off and services that they haven't had, and well, the

636
00:36:15,480 --> 00:36:19,759
Speaker 1: paces is measured and cautious for all a whole bunch

637
00:36:19,800 --> 00:36:22,520
Speaker 1: of good reasons. I think the biggest lesson is you

638
00:36:22,560 --> 00:36:25,160
Speaker 1: have to have momentum, and the momentum needs to start

639
00:36:25,200 --> 00:36:29,480
Speaker 1: from the very beginning um. And that's that's been really

640
00:36:29,560 --> 00:36:33,200
Speaker 1: critical to to get a clear plan in place, the

641
00:36:33,280 --> 00:36:36,560
Speaker 1: clear destination um. I think the other key learning we have,

642
00:36:37,120 --> 00:36:39,160
Speaker 1: and this comes from me being a guy who is

643
00:36:39,400 --> 00:36:42,880
Speaker 1: part of the business that was acquired twice and and wishing,

644
00:36:43,000 --> 00:36:44,600
Speaker 1: you know, a couple of times I had to do

645
00:36:44,680 --> 00:36:47,480
Speaker 1: over is one of the things that we do just

646
00:36:47,600 --> 00:36:50,399
Speaker 1: before firm joins us. So we're gonna have a couple

647
00:36:50,440 --> 00:36:52,680
Speaker 1: of firms join us here. At the end of the year,

648
00:36:53,120 --> 00:36:56,440
Speaker 1: we do an internal call at Mercer with all the

649
00:36:56,440 --> 00:36:58,840
Speaker 1: heads of the departments, not just the executive team, but

650
00:36:58,880 --> 00:37:02,080
Speaker 1: there's maybe twenty bole on this call, and we walk

651
00:37:02,160 --> 00:37:05,920
Speaker 1: through who is this firm, Who are the people, what

652
00:37:06,000 --> 00:37:09,760
Speaker 1: are their hopes, dreams, fears and aspirations. What's the vision

653
00:37:09,880 --> 00:37:13,319
Speaker 1: of what we're trying to create together. Because this relationship

654
00:37:13,400 --> 00:37:17,240
Speaker 1: that was formed in the courtship process maybe didn't involve

655
00:37:17,239 --> 00:37:20,360
Speaker 1: all those people and it's important for them to understand

656
00:37:20,400 --> 00:37:22,640
Speaker 1: all that and to be walked through that. So it

657
00:37:23,040 --> 00:37:25,799
Speaker 1: gives the selling ento the a running start, if you will,

658
00:37:25,840 --> 00:37:29,440
Speaker 1: that the entire mercer team understands what we're trying to

659
00:37:29,480 --> 00:37:32,920
Speaker 1: create and understands what the discussions were. It understands what

660
00:37:32,960 --> 00:37:36,080
Speaker 1: their concerns were of how things are going to go,

661
00:37:36,320 --> 00:37:39,440
Speaker 1: or a certain piece of their client experience that needed

662
00:37:39,440 --> 00:37:42,319
Speaker 1: to stay in place, whatever the discussion was. That those

663
00:37:42,360 --> 00:37:45,719
Speaker 1: two things have been really important. What's interesting is there

664
00:37:46,160 --> 00:37:50,040
Speaker 1: kind of more vision oriented versus tactical planning, right, so

665
00:37:50,239 --> 00:37:53,360
Speaker 1: sort of an understanding in terms of how are we

666
00:37:53,400 --> 00:37:55,439
Speaker 1: going to come together and where are we going and

667
00:37:55,920 --> 00:37:58,760
Speaker 1: we're going to move together, right, and having the teams

668
00:37:58,840 --> 00:38:02,920
Speaker 1: understand that quite interesting. Let's talk a little bit about

669
00:38:03,040 --> 00:38:08,080
Speaker 1: the lack of diversity in the financial services industry. Your

670
00:38:08,120 --> 00:38:12,480
Speaker 1: firm puts on something called Investors, which is a woman's

671
00:38:12,520 --> 00:38:16,719
Speaker 1: initiative design to promote diversity in the advisor space. Tell

672
00:38:16,800 --> 00:38:20,120
Speaker 1: us a little bit about that. Yeah, So invest hers

673
00:38:20,840 --> 00:38:25,160
Speaker 1: a t R S Capitalized is a program that we

674
00:38:25,239 --> 00:38:28,920
Speaker 1: put in place a little over three years ago, and

675
00:38:29,280 --> 00:38:31,480
Speaker 1: I think you know, in our entire industry knows we

676
00:38:31,480 --> 00:38:34,520
Speaker 1: we really struggle with diversity. A lot of the industry

677
00:38:34,600 --> 00:38:39,239
Speaker 1: is still male, stale and pale as as folks like

678
00:38:39,320 --> 00:38:43,680
Speaker 1: to say, And and the question is how do you

679
00:38:43,719 --> 00:38:48,280
Speaker 1: affect change and something that feels at the outset very

680
00:38:48,320 --> 00:38:50,960
Speaker 1: difficult to change. So yeah, I'd like to go back

681
00:38:50,960 --> 00:38:54,280
Speaker 1: and talk about like where where that idea came from?

682
00:38:54,440 --> 00:38:59,000
Speaker 1: And when I joined the businesses CEO in I mentioned

683
00:38:59,160 --> 00:39:01,239
Speaker 1: a little bit earlier in the podcast that the first

684
00:39:01,239 --> 00:39:03,880
Speaker 1: thing I did was travel the country and visit our

685
00:39:03,920 --> 00:39:07,400
Speaker 1: then thirty offices were now closed to fifty offices, but

686
00:39:07,440 --> 00:39:09,879
Speaker 1: the thirty offices, and the first thing that I saw

687
00:39:10,080 --> 00:39:14,080
Speaker 1: was we had and we're very fortunate to have a

688
00:39:14,200 --> 00:39:17,520
Speaker 1: number of incredibly talented women who are already part of

689
00:39:17,520 --> 00:39:23,799
Speaker 1: our organization um as advisers, financial planners, the state planning team,

690
00:39:23,840 --> 00:39:27,040
Speaker 1: on and on and on, and and then about of

691
00:39:27,080 --> 00:39:30,640
Speaker 1: our client advisory staff where women today we're we're a

692
00:39:30,640 --> 00:39:34,640
Speaker 1: little over closer to um So we had a we

693
00:39:34,680 --> 00:39:38,120
Speaker 1: had a good starting point. Uh, those folks didn't happen

694
00:39:38,160 --> 00:39:40,439
Speaker 1: to be in leadership positions at the time, and we've

695
00:39:40,480 --> 00:39:44,040
Speaker 1: also changed that both through this program and through merit.

696
00:39:44,080 --> 00:39:46,680
Speaker 1: And these are talented people. We weren't doing it as

697
00:39:46,680 --> 00:39:49,320
Speaker 1: any sort of just like, hey, let's become more diverse.

698
00:39:49,400 --> 00:39:52,160
Speaker 1: These are talented people that we asked a step into

699
00:39:52,719 --> 00:39:56,600
Speaker 1: leadership roles all around the country. The second thing was

700
00:39:56,640 --> 00:40:00,280
Speaker 1: I attended an event, um, and there was a animal

701
00:40:00,320 --> 00:40:04,760
Speaker 1: of women leaders in our industry who were talking about

702
00:40:04,880 --> 00:40:07,680
Speaker 1: all the trends around women in wealth and now women

703
00:40:07,719 --> 00:40:10,200
Speaker 1: are going to live longer, and how many women are

704
00:40:10,200 --> 00:40:12,400
Speaker 1: head a household a bunch of things that being a

705
00:40:12,880 --> 00:40:16,080
Speaker 1: being a guy who loves data, we're all kind of

706
00:40:16,080 --> 00:40:18,600
Speaker 1: clear to me and intuitive to me. Um, what I

707
00:40:18,600 --> 00:40:21,640
Speaker 1: was stuck on was exactly what we should do next? Right,

708
00:40:21,680 --> 00:40:25,759
Speaker 1: So I understood the problem, I understood the metrics and

709
00:40:25,960 --> 00:40:28,920
Speaker 1: why it was important, but trying to figure out what

710
00:40:28,960 --> 00:40:32,680
Speaker 1: to do next was a real challenge. And uh, fortunately,

711
00:40:32,760 --> 00:40:34,880
Speaker 1: go back to this. We have these talented people in

712
00:40:34,920 --> 00:40:37,319
Speaker 1: the organization. I pad a couple of them on the

713
00:40:37,320 --> 00:40:40,080
Speaker 1: shoulder and I said, look, we I really want to

714
00:40:40,160 --> 00:40:42,960
Speaker 1: launch this thing. Um, I don't know what to call it.

715
00:40:43,000 --> 00:40:44,520
Speaker 1: You're gonna have to figure out what to call it,

716
00:40:44,520 --> 00:40:47,040
Speaker 1: because we don't need a male, stale and pale, middle

717
00:40:47,080 --> 00:40:50,120
Speaker 1: aged white dude decide what what we should call a

718
00:40:50,160 --> 00:40:52,640
Speaker 1: program like this, but I need your leadership and I

719
00:40:52,680 --> 00:40:55,839
Speaker 1: will give you unconditional support, but you need to tell

720
00:40:55,840 --> 00:40:58,160
Speaker 1: me what you're going to do. And what they landed

721
00:40:58,200 --> 00:41:01,919
Speaker 1: on was a charter that had both both a leg

722
00:41:01,960 --> 00:41:04,799
Speaker 1: of our strategy and purpose and charter that program to

723
00:41:04,920 --> 00:41:08,200
Speaker 1: drive more diversity in our business and in the industry.

724
00:41:08,600 --> 00:41:11,719
Speaker 1: The second was to make sure we were really relevant

725
00:41:11,800 --> 00:41:14,640
Speaker 1: and in tune with the needs of our female clients.

726
00:41:14,640 --> 00:41:17,640
Speaker 1: So it has an internal purpose and an external purpose

727
00:41:17,880 --> 00:41:20,880
Speaker 1: and at least for us, that's that's kind of the

728
00:41:20,880 --> 00:41:25,840
Speaker 1: biggest learning is having both UM has been really important

729
00:41:25,880 --> 00:41:30,040
Speaker 1: to get the flywheel on this turning and start to

730
00:41:30,080 --> 00:41:33,600
Speaker 1: start to help us make progress. The the elevation and

731
00:41:33,640 --> 00:41:37,080
Speaker 1: empowerment of the talented women in our organization has helped

732
00:41:37,120 --> 00:41:40,960
Speaker 1: us from recruiting, has helped us bring more talented the organization.

733
00:41:41,040 --> 00:41:44,799
Speaker 1: We do scholarships, we have relationships with universities UM that

734
00:41:44,800 --> 00:41:47,320
Speaker 1: that go to word this cause, but it's it's really

735
00:41:47,400 --> 00:41:50,319
Speaker 1: the engagement of the women professionals in our organization that

736
00:41:50,400 --> 00:41:53,120
Speaker 1: has been a draw for talent. And then our clients

737
00:41:53,120 --> 00:41:56,480
Speaker 1: see that, right, our clients see affirm that reflects them,

738
00:41:56,520 --> 00:41:59,960
Speaker 1: reflects their values and it's helped us externally. UM. All

739
00:42:00,080 --> 00:42:02,200
Speaker 1: those things work together to help propel it. It It. It

740
00:42:02,280 --> 00:42:05,040
Speaker 1: was it was hard to get started and hard to

741
00:42:05,080 --> 00:42:08,640
Speaker 1: know what exactly to do first, but you know, we

742
00:42:08,680 --> 00:42:11,440
Speaker 1: had we had this great starting point of having talented

743
00:42:11,440 --> 00:42:14,839
Speaker 1: women already in our organization who were passionate about this

744
00:42:14,960 --> 00:42:18,880
Speaker 1: and and you know, had the energy and had had

745
00:42:18,880 --> 00:42:22,760
Speaker 1: my support, um, whether it was funding or just verbal

746
00:42:22,800 --> 00:42:25,400
Speaker 1: support help get things going. So it's it's been a

747
00:42:25,400 --> 00:42:28,160
Speaker 1: big success for us and the steering committee and the

748
00:42:28,880 --> 00:42:30,960
Speaker 1: now hundreds of women that have been involved in that.

749
00:42:31,040 --> 00:42:34,480
Speaker 1: We just did our virtual We usually do an annual

750
00:42:34,600 --> 00:42:38,320
Speaker 1: event around investors at a nice retreat for a couple

751
00:42:38,320 --> 00:42:40,720
Speaker 1: of days. We did that virtually over a two week period.

752
00:42:40,760 --> 00:42:43,239
Speaker 1: We just wrapped that up and had more than half

753
00:42:43,280 --> 00:42:46,520
Speaker 1: of our company participate that. In concluding some men right

754
00:42:46,560 --> 00:42:50,040
Speaker 1: who participated in that, who want to be better advocates,

755
00:42:50,080 --> 00:42:52,960
Speaker 1: want to be better allies, UM, and and are just

756
00:42:53,000 --> 00:42:55,480
Speaker 1: as committed to the cause as our women professionals are.

757
00:42:55,880 --> 00:42:58,279
Speaker 1: You have a quote I really like tell us what

758
00:42:58,320 --> 00:43:01,759
Speaker 1: we can do to quote stand together and do the

759
00:43:01,800 --> 00:43:06,760
Speaker 1: next right thing. Yeah. So this came out of the

760
00:43:06,880 --> 00:43:11,839
Speaker 1: very challenging times that we have had in around more

761
00:43:11,880 --> 00:43:15,920
Speaker 1: broadly diversity in our country and the systemic inequalities that exist.

762
00:43:16,200 --> 00:43:19,080
Speaker 1: And yeah, I think, like a lot of leaders, I

763
00:43:19,400 --> 00:43:22,600
Speaker 1: tend to note to the team talking about what we

764
00:43:22,640 --> 00:43:27,160
Speaker 1: stood for and reminding them that in the air of diversity,

765
00:43:27,239 --> 00:43:29,279
Speaker 1: there is there is, you know, we really needed to

766
00:43:29,320 --> 00:43:31,480
Speaker 1: do the right thing. And then it became, with some

767
00:43:32,800 --> 00:43:35,160
Speaker 1: encouragement from some folks on my team, I posted it

768
00:43:35,200 --> 00:43:38,000
Speaker 1: to social media together and it was talking right on

769
00:43:38,040 --> 00:43:41,880
Speaker 1: the heels of the death of George Floyd and and

770
00:43:41,400 --> 00:43:44,880
Speaker 1: and others just just tragic, and the team was just

771
00:43:45,120 --> 00:43:48,520
Speaker 1: you know, had gut wrenched right and and I think

772
00:43:48,520 --> 00:43:51,040
Speaker 1: stuck in this place of we know this is wrong,

773
00:43:51,080 --> 00:43:54,880
Speaker 1: but we're not quite sure what to do next. And

774
00:43:55,360 --> 00:43:57,880
Speaker 1: I think, you know, as we have embarked on this,

775
00:43:57,960 --> 00:44:02,040
Speaker 1: and I you know, far less progress to to be

776
00:44:02,160 --> 00:44:04,799
Speaker 1: able to relay at this stage then we've made in

777
00:44:04,840 --> 00:44:08,520
Speaker 1: our women's program and women's initiative. You know, I got

778
00:44:08,520 --> 00:44:12,120
Speaker 1: to this point where it's we we've a needed to

779
00:44:12,160 --> 00:44:15,799
Speaker 1: say something, being more importantly needed to listen. Um so

780
00:44:15,840 --> 00:44:18,680
Speaker 1: that there was a huge desire and remains a huge

781
00:44:18,680 --> 00:44:21,520
Speaker 1: desire to quote do something. The first thing that I

782
00:44:21,560 --> 00:44:23,880
Speaker 1: felt like it was important was to listen. So we

783
00:44:24,040 --> 00:44:27,960
Speaker 1: held probably a dozen, maybe as many as twenty internal

784
00:44:28,000 --> 00:44:31,680
Speaker 1: forums for our employees to talk about UM the issues

785
00:44:31,680 --> 00:44:35,440
Speaker 1: around diversity and inequalities in our country. And that was

786
00:44:35,480 --> 00:44:39,000
Speaker 1: really powerful. There was this desire to do something, but

787
00:44:39,960 --> 00:44:42,120
Speaker 1: I think all of us are recognizing that we needed

788
00:44:42,160 --> 00:44:45,879
Speaker 1: to ground ourselves and in understanding and listening first. So

789
00:44:46,520 --> 00:44:48,840
Speaker 1: I think where we are today, We've we've taken a

790
00:44:48,920 --> 00:44:53,120
Speaker 1: number of actions. We've we've I've joined a group here

791
00:44:53,160 --> 00:44:56,080
Speaker 1: in Colorado called Inclusive Economy. It's a group of about

792
00:44:56,160 --> 00:45:00,120
Speaker 1: twenty five ceo s with some nonprofit UM nonprofit an

793
00:45:00,200 --> 00:45:05,560
Speaker 1: involvement as well around helping Colorado become a more diverse economy.

794
00:45:05,800 --> 00:45:08,280
Speaker 1: And I think what I've landed on them. I'm a

795
00:45:08,280 --> 00:45:11,360
Speaker 1: liberal arts undergrad guy, so this has got an alliteration

796
00:45:11,600 --> 00:45:15,120
Speaker 1: coming here. But it was about actions. You're taking actions.

797
00:45:15,280 --> 00:45:19,240
Speaker 1: It's also about creating allies. I've connected with a number

798
00:45:19,520 --> 00:45:23,280
Speaker 1: of advisors in our profession who care about the same things,

799
00:45:23,280 --> 00:45:25,920
Speaker 1: and we're trying to work together on these issues. And

800
00:45:26,400 --> 00:45:30,480
Speaker 1: the Inclusive Economy program in Colorado is about allies, about

801
00:45:30,880 --> 00:45:34,839
Speaker 1: twenty CEOs of companies in Colorado working together to try

802
00:45:34,880 --> 00:45:38,600
Speaker 1: and drive effect to change. And it's it's also about accountability, right.

803
00:45:38,800 --> 00:45:42,200
Speaker 1: Being being part of that male, pale and stale crowd,

804
00:45:42,280 --> 00:45:44,560
Speaker 1: I think part of part of my job, you know,

805
00:45:44,680 --> 00:45:48,319
Speaker 1: part of our job, is to hold my peers accountable, right.

806
00:45:48,560 --> 00:45:52,399
Speaker 1: And I think that's something that I've really learned this

807
00:45:52,520 --> 00:45:55,319
Speaker 1: year is is you need to do more than just

808
00:45:55,440 --> 00:45:58,719
Speaker 1: do the right thing yourself. You need to step up,

809
00:45:58,719 --> 00:46:01,440
Speaker 1: particularly those of us are fortunate enough to be in

810
00:46:01,520 --> 00:46:05,839
Speaker 1: leadership roles and hold others accountable. Um. And we need

811
00:46:05,840 --> 00:46:08,520
Speaker 1: to be emboldened that we need to make progress, but

812
00:46:08,560 --> 00:46:12,279
Speaker 1: not be discouraged that our starting point sucks. Right. We

813
00:46:12,400 --> 00:46:14,799
Speaker 1: don't like where we are, we don't like what we can,

814
00:46:14,880 --> 00:46:17,200
Speaker 1: but there's there's no option in my mind. The other

815
00:46:17,239 --> 00:46:20,680
Speaker 1: phrase that's in that that article that I put together

816
00:46:20,760 --> 00:46:24,439
Speaker 1: is about relentless forward progress. Um. I've got some good

817
00:46:24,480 --> 00:46:28,400
Speaker 1: friends who are who are ultramarrathonors, and when I have

818
00:46:28,520 --> 00:46:30,080
Speaker 1: the time, one of the things I do is going

819
00:46:30,360 --> 00:46:33,680
Speaker 1: I support them on these two mile runs and crazy

820
00:46:33,719 --> 00:46:37,600
Speaker 1: parts of the world. And you know their mantras, relentless

821
00:46:37,640 --> 00:46:41,680
Speaker 1: forward progress doesn't matter if you're tired, right, and doesn't

822
00:46:41,680 --> 00:46:43,840
Speaker 1: matter if you think you want to stop right, you

823
00:46:44,160 --> 00:46:47,279
Speaker 1: have to make progress right, and I think that's you

824
00:46:47,280 --> 00:46:50,520
Speaker 1: know what we're trying to do. Quite interesting, you signed

825
00:46:50,760 --> 00:46:54,640
Speaker 1: the u N Principles for Responsible Investing some years ago.

826
00:46:55,480 --> 00:46:59,160
Speaker 1: How has that affected the way Mercer is a steward

827
00:46:59,200 --> 00:47:04,839
Speaker 1: of capital? Yeah, so, our our TIEF investment officer, John Kelcagny,

828
00:47:05,360 --> 00:47:08,080
Speaker 1: brought that to me and was a real advocate advocate

829
00:47:08,160 --> 00:47:10,680
Speaker 1: for it um and it was one of those moments

830
00:47:10,719 --> 00:47:13,160
Speaker 1: where you know you have me at hello, which was

831
00:47:13,760 --> 00:47:17,359
Speaker 1: we we wanted to be part of change and um

832
00:47:17,360 --> 00:47:19,719
Speaker 1: we felt like it was an important change and a

833
00:47:19,800 --> 00:47:22,399
Speaker 1: number of our we worked all a number of separate

834
00:47:22,400 --> 00:47:26,840
Speaker 1: account managers who also have been co signatories to to

835
00:47:26,960 --> 00:47:31,200
Speaker 1: the UN Principles for Responsible Investing as well. What's interesting

836
00:47:31,520 --> 00:47:34,160
Speaker 1: is not only are we signatories, we we actually have

837
00:47:34,320 --> 00:47:38,600
Speaker 1: some pretty unique capabilities under the hood and Mercers Investment

838
00:47:38,680 --> 00:47:42,080
Speaker 1: Offering to provide s R I or E s T

839
00:47:42,719 --> 00:47:47,560
Speaker 1: investing capabilities that are very customized and come at no

840
00:47:48,000 --> 00:47:52,280
Speaker 1: additional expense to the investors, so very very cost advantage

841
00:47:52,320 --> 00:47:55,080
Speaker 1: and even even more cost advantage than some of the

842
00:47:55,120 --> 00:47:57,960
Speaker 1: funds and resources that are available through Vanguard and other

843
00:47:58,000 --> 00:48:01,600
Speaker 1: places that are known for being low expect us and

844
00:48:01,640 --> 00:48:04,640
Speaker 1: I think a lot of the industry, the internal narrative,

845
00:48:04,800 --> 00:48:07,920
Speaker 1: right has been well, this is something important, but it

846
00:48:07,920 --> 00:48:10,359
Speaker 1: it feels very small and it's certainly not as as

847
00:48:10,400 --> 00:48:14,040
Speaker 1: big as it has been in Europe. Um And but

848
00:48:14,120 --> 00:48:18,400
Speaker 1: I think you're starting to see uh interest from investors

849
00:48:18,400 --> 00:48:23,560
Speaker 1: and that interest turned into capital investments in so um

850
00:48:23,600 --> 00:48:27,240
Speaker 1: pocketed now regionally in different parts of the country where

851
00:48:27,840 --> 00:48:33,080
Speaker 1: investors really are interested in seeing their advisor have these capabilities,

852
00:48:33,520 --> 00:48:36,960
Speaker 1: um so that they can tail or tailor investment portfolios too,

853
00:48:37,480 --> 00:48:40,239
Speaker 1: things that they care about, right. So um. You know

854
00:48:40,400 --> 00:48:43,000
Speaker 1: this this extension of we need to act a certain

855
00:48:43,080 --> 00:48:45,160
Speaker 1: way in the world, but we we want our money

856
00:48:45,239 --> 00:48:47,960
Speaker 1: to act in the same way. Right. So um, it's

857
00:48:47,960 --> 00:48:50,640
Speaker 1: just been hard. It's been hard to access for for

858
00:48:50,719 --> 00:48:53,200
Speaker 1: the regular consumer. And you know, we're happy to be

859
00:48:53,200 --> 00:48:57,040
Speaker 1: playing a small part in helping democratize that access and

860
00:48:57,080 --> 00:48:59,560
Speaker 1: have people be able to do the right thing with

861
00:48:59,600 --> 00:49:02,480
Speaker 1: their money but not haven't have to cost them more

862
00:49:02,520 --> 00:49:06,640
Speaker 1: money or or come with inefficient portfolio. So um. So

863
00:49:06,760 --> 00:49:08,920
Speaker 1: it's been a it's been a good success for us.

864
00:49:09,040 --> 00:49:14,120
Speaker 1: Very interesting. So let's discuss the future of financial advice.

865
00:49:14,520 --> 00:49:17,799
Speaker 1: You're the perfect person to ask this question, how have

866
00:49:18,000 --> 00:49:23,600
Speaker 1: client expectations evolved over the past few years. Well, I

867
00:49:23,640 --> 00:49:27,840
Speaker 1: think investors now expect a lot more than an asset

868
00:49:27,880 --> 00:49:32,480
Speaker 1: allocation strategy and investment portfolio. Right. That is important. It's

869
00:49:32,480 --> 00:49:37,719
Speaker 1: an important part of somebody's financial plan. And obviously consumers

870
00:49:37,760 --> 00:49:41,719
Speaker 1: remains very interested in investments. It's just those those options

871
00:49:41,760 --> 00:49:45,080
Speaker 1: and the role of an advisor helping put things together.

872
00:49:45,120 --> 00:49:47,319
Speaker 1: In for an investor, there's a lot of places they

873
00:49:47,360 --> 00:49:50,160
Speaker 1: can get that now from you know what the industry

874
00:49:50,239 --> 00:49:55,160
Speaker 1: might call robo advisors, to large retail shops that used

875
00:49:55,200 --> 00:49:57,440
Speaker 1: to be known as discount brokera shops, but now are

876
00:49:57,520 --> 00:50:00,359
Speaker 1: making those things available and that's good for the consumer. UM.

877
00:50:00,400 --> 00:50:03,880
Speaker 1: For for us UM, we've been following the path of

878
00:50:03,960 --> 00:50:09,240
Speaker 1: the consumer to provide more services right beyond beyond asset

879
00:50:09,239 --> 00:50:13,200
Speaker 1: allocation and investments. So that has manifested itself in a

880
00:50:13,239 --> 00:50:17,120
Speaker 1: business that offers comprehensive financial planning, which has always been

881
00:50:17,160 --> 00:50:20,040
Speaker 1: part of our core offering, has manifested itself and us

882
00:50:20,080 --> 00:50:23,400
Speaker 1: having a dedicated a state planning team, we will draft

883
00:50:23,440 --> 00:50:28,200
Speaker 1: documents for the clients and not cookie cutter plans, customized plans.

884
00:50:28,239 --> 00:50:31,160
Speaker 1: We have a tax team that does individual and business

885
00:50:31,520 --> 00:50:34,600
Speaker 1: work together. But I think one of the other ingredients

886
00:50:34,640 --> 00:50:37,680
Speaker 1: that's really important about Mercer is the way that the

887
00:50:37,719 --> 00:50:40,280
Speaker 1: team is aligned is to work all as one team

888
00:50:40,320 --> 00:50:45,520
Speaker 1: together and not multiple different departments. Right. So, um, you know,

889
00:50:45,600 --> 00:50:48,080
Speaker 1: having been a guy who had the fortune to live

890
00:50:48,200 --> 00:50:50,400
Speaker 1: near one of the Mayo clinics, um when I was

891
00:50:50,440 --> 00:50:54,120
Speaker 1: living in Jacksonville, Florida, you know, Mayo Clinic does a

892
00:50:54,239 --> 00:50:59,359
Speaker 1: very nice job of this in medicine, where it's not

893
00:50:59,480 --> 00:51:01,799
Speaker 1: just your going in for heart surgery or cancer, it's

894
00:51:01,800 --> 00:51:03,680
Speaker 1: it's a place you want to go if if you

895
00:51:03,680 --> 00:51:06,360
Speaker 1: think something's wrong with you but you're not sure, because

896
00:51:06,400 --> 00:51:10,280
Speaker 1: all those professionals across those different disciplines are there to

897
00:51:10,320 --> 00:51:13,640
Speaker 1: help diagnose and figure out what's going on. So, fortunately,

898
00:51:13,680 --> 00:51:16,640
Speaker 1: when we need consumers, there's not a health crisis, but

899
00:51:16,719 --> 00:51:19,880
Speaker 1: there is a lot of uncertainty about their financial affairs,

900
00:51:20,000 --> 00:51:22,680
Speaker 1: and they're they're looking for somebody to help solve a

901
00:51:22,760 --> 00:51:25,560
Speaker 1: problem that maybe is becoming more complex. Right, they have

902
00:51:25,600 --> 00:51:28,719
Speaker 1: an investment problem, and they have some tax questions, they

903
00:51:28,719 --> 00:51:32,600
Speaker 1: have some issues around their estate, or there's a recommendation

904
00:51:32,680 --> 00:51:35,239
Speaker 1: that may need to involve all of those parties. Right,

905
00:51:35,239 --> 00:51:38,000
Speaker 1: if you want to set up a acid protection trust, right,

906
00:51:38,120 --> 00:51:40,839
Speaker 1: They they simply don't want to have to go talk

907
00:51:40,880 --> 00:51:44,160
Speaker 1: to three different professionals to to get that put together

908
00:51:44,239 --> 00:51:46,759
Speaker 1: and have the meter running at least two of those

909
00:51:46,800 --> 00:51:49,080
Speaker 1: three places to be able to put together that strategy.

910
00:51:49,239 --> 00:51:53,520
Speaker 1: So I think as investors and the consumers have both

911
00:51:53,560 --> 00:51:58,279
Speaker 1: aged and matured, there's an expectation for for those of

912
00:51:58,360 --> 00:52:00,880
Speaker 1: us that are in the seat at the professional advisor

913
00:52:01,280 --> 00:52:04,640
Speaker 1: to help them ease that complexity. And part of the

914
00:52:04,640 --> 00:52:07,800
Speaker 1: complexity the exist in our industry is that it's still

915
00:52:08,520 --> 00:52:10,640
Speaker 1: it's still split up in a lot of places, so

916
00:52:10,760 --> 00:52:14,480
Speaker 1: you know, mergers, vision and ideas, to bring those expertise

917
00:52:14,520 --> 00:52:17,919
Speaker 1: all under one roof um, and then to align those

918
00:52:17,920 --> 00:52:23,360
Speaker 1: professionals around one standard, which is, let's let's work together

919
00:52:23,440 --> 00:52:26,320
Speaker 1: to provide the best set of recommendations and the best

920
00:52:26,360 --> 00:52:30,440
Speaker 1: execution of those recommendations to get the plan in place

921
00:52:30,440 --> 00:52:34,080
Speaker 1: and to get it finished. UM. So that's certainly where

922
00:52:34,080 --> 00:52:37,000
Speaker 1: we're going. But I think there's part of a broader

923
00:52:37,040 --> 00:52:40,960
Speaker 1: secular shift of of the sophistication and evolution of our

924
00:52:41,080 --> 00:52:45,480
Speaker 1: entire industry. So let's stay with the concept of that evolution.

925
00:52:45,880 --> 00:52:49,759
Speaker 1: I'm intrigued by the idea of a state planning as

926
00:52:49,800 --> 00:52:55,319
Speaker 1: well as tax planning, not as discrete departments within a

927
00:52:55,360 --> 00:52:59,560
Speaker 1: big company, but as something that is integral to the

928
00:52:59,719 --> 00:53:03,439
Speaker 1: entire or financial planning process. How do you manage to

929
00:53:03,560 --> 00:53:07,080
Speaker 1: keep this part of the regular process and not have

930
00:53:07,160 --> 00:53:11,000
Speaker 1: these become their own little neighborhood separate from the rest

931
00:53:11,040 --> 00:53:15,880
Speaker 1: of the wealth planning process. Yeah, well, that goes to culture,

932
00:53:16,040 --> 00:53:19,719
Speaker 1: but it also goes to the mandate, right, it's going

933
00:53:19,760 --> 00:53:22,680
Speaker 1: to so we we don't charge for the state planning.

934
00:53:22,800 --> 00:53:27,040
Speaker 1: It's included as part of our advisory fee for clients. UM.

935
00:53:27,160 --> 00:53:31,040
Speaker 1: So it's complementary if you will. Two, And we don't

936
00:53:31,120 --> 00:53:34,800
Speaker 1: charge hourly rates in either a state planning group or

937
00:53:34,960 --> 00:53:37,960
Speaker 1: our tax group. Right, So we do charge an annual

938
00:53:38,040 --> 00:53:42,040
Speaker 1: fee for preparing the tax return or especially if there's

939
00:53:42,080 --> 00:53:45,279
Speaker 1: a business return, there would be a fee for that

940
00:53:45,360 --> 00:53:47,919
Speaker 1: as well, to get us to prepare their turns. That's

941
00:53:47,960 --> 00:53:51,000
Speaker 1: commensurate with what folks would experience in the industry. But

942
00:53:51,719 --> 00:53:57,960
Speaker 1: our lawyers and our accountants also thereby or not measure

943
00:53:58,040 --> 00:54:00,000
Speaker 1: the way it happens in other parts of the industry

944
00:54:00,040 --> 00:54:04,080
Speaker 1: around bill of all hours. UM. Our principle is serve

945
00:54:04,160 --> 00:54:07,799
Speaker 1: a client, follow through and deliver the estate plan that

946
00:54:07,920 --> 00:54:10,960
Speaker 1: was part of the recommendation in the financial plan. And oh,

947
00:54:11,000 --> 00:54:13,680
Speaker 1: by the way, if there's an outside of state planning

948
00:54:13,719 --> 00:54:16,600
Speaker 1: attorney that the client knows that they've worked within the past,

949
00:54:16,760 --> 00:54:19,320
Speaker 1: maybe they have existing documents in place that need to

950
00:54:19,360 --> 00:54:22,239
Speaker 1: be updated. Our lawyers will get on the phone with

951
00:54:22,280 --> 00:54:26,000
Speaker 1: their lawyers. Right, So we're we're not trying to to

952
00:54:26,080 --> 00:54:29,160
Speaker 1: earn a buck on on fulfilling the estate planning. We're

953
00:54:29,200 --> 00:54:32,319
Speaker 1: just trying to help the client finish the recommendations that

954
00:54:32,360 --> 00:54:35,239
Speaker 1: are in the financial plan. So to pull this off,

955
00:54:35,280 --> 00:54:37,120
Speaker 1: you need to have a little bit more scale, and

956
00:54:37,160 --> 00:54:40,320
Speaker 1: there's where still it's still it's twenty one billion dollars.

957
00:54:40,400 --> 00:54:45,200
Speaker 1: We're small in the landscape of of other firms out there,

958
00:54:45,200 --> 00:54:47,040
Speaker 1: but we're big enough to be able to have these

959
00:54:47,040 --> 00:54:51,719
Speaker 1: dedicated departments with individuals. So we we also keep every

960
00:54:51,760 --> 00:54:55,520
Speaker 1: client is assigned a point advisor who manages the relationship.

961
00:54:55,840 --> 00:54:58,399
Speaker 1: If you want to use the medical analogy, that's that's

962
00:54:58,440 --> 00:55:02,279
Speaker 1: the general practitioner, but the specialists are deployed into that

963
00:55:02,360 --> 00:55:07,479
Speaker 1: relationship based on either a client request or be more

964
00:55:07,640 --> 00:55:11,960
Speaker 1: more frequently, the point advisor's recommendation of let's get our

965
00:55:12,080 --> 00:55:14,840
Speaker 1: estate planning team involved, and then the estate planning team

966
00:55:15,040 --> 00:55:17,560
Speaker 1: is involved right being able to help take care of

967
00:55:17,560 --> 00:55:20,319
Speaker 1: the clients. So I think where this is broken down

968
00:55:20,360 --> 00:55:23,280
Speaker 1: in other parts of our industry. Um, there's some large

969
00:55:23,320 --> 00:55:27,120
Speaker 1: tax firms that have wealth management practices, and maybe that's

970
00:55:27,120 --> 00:55:30,920
Speaker 1: something that you're referencing. They are different departments and it

971
00:55:31,040 --> 00:55:33,200
Speaker 1: feels like that to the consumer, you might as well

972
00:55:33,280 --> 00:55:37,120
Speaker 1: be going to a separate accounting firm altogether, because you

973
00:55:37,160 --> 00:55:40,279
Speaker 1: are jumping into a different silo. So you have to

974
00:55:40,280 --> 00:55:42,719
Speaker 1: tear down the silos and not let them let them

975
00:55:42,760 --> 00:55:46,080
Speaker 1: get built, I think, and and make sure that that

976
00:55:46,200 --> 00:55:48,640
Speaker 1: everybody understands the same principle is that there's one goal

977
00:55:48,640 --> 00:55:51,080
Speaker 1: in mind at serving a client. That makes perfect sense

978
00:55:51,120 --> 00:55:54,840
Speaker 1: to me. You mentioned that a twenty one billion dollars,

979
00:55:55,080 --> 00:55:59,239
Speaker 1: you're relatively small. This is kind of the fascinating thing

980
00:55:59,280 --> 00:56:02,640
Speaker 1: about the r are industry. It's kind of weird in

981
00:56:02,680 --> 00:56:07,480
Speaker 1: that nobody really has meaningful market share. So how do

982
00:56:07,520 --> 00:56:11,839
Speaker 1: you think about the competition and do they even matter? Yeah?

983
00:56:11,880 --> 00:56:14,879
Speaker 1: I think I think it depends on how you frame it, right,

984
00:56:14,960 --> 00:56:18,320
Speaker 1: So I think I think Fidelity is probably the largest

985
00:56:18,560 --> 00:56:21,879
Speaker 1: financial services firm in our country yet it's still meant

986
00:56:21,960 --> 00:56:24,880
Speaker 1: that you measure it maybe has mid single digit market share,

987
00:56:25,560 --> 00:56:30,680
Speaker 1: So very very fragmented industry. So at twenty one billion UM.

988
00:56:31,160 --> 00:56:35,000
Speaker 1: From a financial advisory perspective, you have the wirehouses out

989
00:56:35,000 --> 00:56:38,359
Speaker 1: there Mortgage Stanley, Merrill, Lynch that are our trillions, right,

990
00:56:38,400 --> 00:56:41,799
Speaker 1: So they're much much larger than we are. To me,

991
00:56:42,480 --> 00:56:48,120
Speaker 1: that's the that's the competition or or the exact opposite

992
00:56:48,160 --> 00:56:49,880
Speaker 1: of what we are and what we want to become.

993
00:56:50,239 --> 00:56:54,040
Speaker 1: We operate under a fiduciary standard. We serve our clients

994
00:56:54,120 --> 00:56:57,920
Speaker 1: were purely an independent registered investment advisor. We don't have

995
00:56:57,960 --> 00:57:00,799
Speaker 1: an investment banking division, we don't have other things that

996
00:57:00,880 --> 00:57:04,400
Speaker 1: could introduce conflicts into the client relationships. So when you

997
00:57:04,640 --> 00:57:07,360
Speaker 1: talk about fragmented, then you get in the segment of

998
00:57:07,400 --> 00:57:11,800
Speaker 1: the industry that are registered investment advisors or produce series.

999
00:57:11,920 --> 00:57:16,000
Speaker 1: I think a lot of us leading these firms recognize

1000
00:57:16,080 --> 00:57:19,040
Speaker 1: that there's more to be gained from us working together

1001
00:57:19,560 --> 00:57:24,720
Speaker 1: UM than from us seeing or perceiving each other as competitors.

1002
00:57:24,880 --> 00:57:29,040
Speaker 1: So I'm part of an industry study group. I've been

1003
00:57:29,120 --> 00:57:31,680
Speaker 1: part of that group for over fifteen years. I'm very

1004
00:57:31,720 --> 00:57:37,240
Speaker 1: active in events. We share information on around our initiatives

1005
00:57:37,240 --> 00:57:40,840
Speaker 1: with each other because we believe that helping the entire

1006
00:57:41,080 --> 00:57:44,600
Speaker 1: category grow UM firms that are adhering to that produciary

1007
00:57:44,640 --> 00:57:47,080
Speaker 1: standard is in is in the best interest of the

1008
00:57:47,120 --> 00:57:50,200
Speaker 1: consumer and ultimately helps us. Right, we can we can

1009
00:57:50,240 --> 00:57:53,440
Speaker 1: help each other, UM punch above our weight class if

1010
00:57:53,440 --> 00:57:55,680
Speaker 1: you will, from an industry perspective when we when we

1011
00:57:55,760 --> 00:57:59,040
Speaker 1: work together. So I think that's uh, I think that's important.

1012
00:57:59,080 --> 00:58:01,520
Speaker 1: I think you can look at you, look at look

1013
00:58:01,600 --> 00:58:04,720
Speaker 1: look at competition as well. They provide similar service to

1014
00:58:04,880 --> 00:58:08,400
Speaker 1: us at the margin. You know, I'm interested if the

1015
00:58:08,440 --> 00:58:11,560
Speaker 1: client doesn't choose us, that they find another good home

1016
00:58:11,720 --> 00:58:14,080
Speaker 1: that's going to serve them in the right way. UM.

1017
00:58:14,200 --> 00:58:16,480
Speaker 1: So I don't think of that as competition. I look

1018
00:58:16,520 --> 00:58:18,960
Speaker 1: at that as another consumer that was better served if

1019
00:58:19,000 --> 00:58:21,920
Speaker 1: they made the right choice. So, UM, I think it's

1020
00:58:21,960 --> 00:58:24,160
Speaker 1: interesting and it is a little weird, right. It's very

1021
00:58:24,240 --> 00:58:28,560
Speaker 1: different than how it felt when I was in technology

1022
00:58:28,600 --> 00:58:31,240
Speaker 1: and there in any category there are two or three

1023
00:58:31,280 --> 00:58:36,040
Speaker 1: main players. That was that was competition. Um. Every everybody

1024
00:58:36,040 --> 00:58:38,400
Speaker 1: looking at buying your piece of technology was looking at

1025
00:58:38,400 --> 00:58:42,000
Speaker 1: the direct competitor and evaluating against each other. That's competition.

1026
00:58:42,120 --> 00:58:44,680
Speaker 1: This is this is not right. This is this is

1027
00:58:44,680 --> 00:58:47,439
Speaker 1: different and I think has been one of the things

1028
00:58:47,440 --> 00:58:49,720
Speaker 1: that is really drawn and attracted me to this industry

1029
00:58:49,800 --> 00:58:54,520
Speaker 1: is this collegiality. Uh that that mercer doesn't have all

1030
00:58:54,520 --> 00:58:56,960
Speaker 1: the good ideas cornered and hasn't figured a lot of

1031
00:58:56,960 --> 00:59:00,720
Speaker 1: things out as an industry. You know, all of us

1032
00:59:00,720 --> 00:59:02,880
Speaker 1: are smarter than any any one of us, So it's

1033
00:59:02,920 --> 00:59:05,120
Speaker 1: it's great that we have that culture to be able

1034
00:59:05,160 --> 00:59:07,280
Speaker 1: to share best practices and share learnings and to help

1035
00:59:07,320 --> 00:59:10,439
Speaker 1: each other. So let's stick with the industry as a whole.

1036
00:59:11,000 --> 00:59:14,439
Speaker 1: We just had a giant merger announced earlier this year,

1037
00:59:14,720 --> 00:59:18,120
Speaker 1: the Schwab TD merger. How do you think this is

1038
00:59:18,120 --> 00:59:21,680
Speaker 1: gonna impact the industry at large? And is there going

1039
00:59:21,720 --> 00:59:26,960
Speaker 1: to be more consolidation in the custodial space. Yeah, I'm

1040
00:59:27,000 --> 00:59:30,280
Speaker 1: you know, short term bearish, long term bullish on this one.

1041
00:59:30,520 --> 00:59:32,720
Speaker 1: And as we talked about earlier, I worked at SWAB

1042
00:59:32,800 --> 00:59:35,880
Speaker 1: for twelve years, so I've I've got some insight, not

1043
00:59:36,080 --> 00:59:39,000
Speaker 1: just a SWAB but from the other side of it.

1044
00:59:39,160 --> 00:59:42,400
Speaker 1: I think, you know, ultimately it's it's good for our

1045
00:59:42,440 --> 00:59:46,000
Speaker 1: industry and and you know, frankly, the writing was on

1046
00:59:46,040 --> 00:59:49,960
Speaker 1: the wall when we go to zero dollar transaction piece.

1047
00:59:51,000 --> 00:59:53,960
Speaker 1: I can't remember working at Schwab where we dropped price

1048
00:59:54,040 --> 00:59:58,479
Speaker 1: in and it was a better company moment, right, and

1049
00:59:58,640 --> 01:00:01,200
Speaker 1: that was back in the I think, you know, a

1050
01:00:01,280 --> 01:00:05,240
Speaker 1: long time ago, and um, you know, it's a really

1051
01:00:05,320 --> 01:00:08,840
Speaker 1: great transition that we're going through. But I think these

1052
01:00:08,840 --> 01:00:11,960
Speaker 1: businesses are going to come together. Uh, they're going to

1053
01:00:12,040 --> 01:00:15,000
Speaker 1: put the capabilities of the two organizations together. The short

1054
01:00:15,120 --> 01:00:18,840
Speaker 1: term bearishes, it's going to take some time for that

1055
01:00:18,960 --> 01:00:22,760
Speaker 1: to happen and maybe divert interest around operational issues in

1056
01:00:22,800 --> 01:00:26,160
Speaker 1: the short term, but long term, I think it'll create

1057
01:00:26,160 --> 01:00:29,480
Speaker 1: a healthy partner. And ultimately that's the most important outcome

1058
01:00:29,480 --> 01:00:33,160
Speaker 1: of this is as an advisor, when you work with

1059
01:00:33,200 --> 01:00:36,640
Speaker 1: a custodian, you really need that custodian to be healthy.

1060
01:00:36,760 --> 01:00:39,040
Speaker 1: And for that custodian to be healthy, they need to

1061
01:00:39,040 --> 01:00:41,720
Speaker 1: not only have a good business serving advisors, they need

1062
01:00:41,760 --> 01:00:44,400
Speaker 1: to have a good retail business as well. And the

1063
01:00:44,440 --> 01:00:48,360
Speaker 1: better those businesses are doing, the better it It results

1064
01:00:48,360 --> 01:00:52,680
Speaker 1: in investment and in support for firms like US. So

1065
01:00:53,200 --> 01:00:56,360
Speaker 1: I'm I'm bullish on sort of the opportunity and what

1066
01:00:56,360 --> 01:01:01,800
Speaker 1: it might mean. I'm not concerned about consolidation of different custodians.

1067
01:01:01,800 --> 01:01:04,800
Speaker 1: There's there's enough choices out there, and there's new ones

1068
01:01:04,840 --> 01:01:08,840
Speaker 1: that could emerge top solve that issue. Quite interesting, I

1069
01:01:08,880 --> 01:01:10,920
Speaker 1: want to throw you a little bit of a curveball.

1070
01:01:11,880 --> 01:01:15,920
Speaker 1: In the nineties when you left Bain, you were deciding

1071
01:01:15,960 --> 01:01:19,440
Speaker 1: on two companies. You ended up going to Schwab, but

1072
01:01:19,600 --> 01:01:22,520
Speaker 1: the other one was a little startup in Seattle that

1073
01:01:22,720 --> 01:01:26,560
Speaker 1: ended up growing into Amazon. When you look back on

1074
01:01:26,640 --> 01:01:29,560
Speaker 1: that decision, what are your thoughts had had you been

1075
01:01:29,600 --> 01:01:33,480
Speaker 1: employee number fifty, I gotta imagine those stock options would

1076
01:01:33,480 --> 01:01:37,720
Speaker 1: have been pretty valuable. Yeah, who knows, right? Who knows?

1077
01:01:38,280 --> 01:01:40,360
Speaker 1: Maybe maybe I would have sucked and gotten fired in

1078
01:01:40,440 --> 01:01:42,520
Speaker 1: six months and it would have been a disaster, right,

1079
01:01:42,800 --> 01:01:46,760
Speaker 1: You don't you don't, You don't know, right, And I think, yeah,

1080
01:01:46,760 --> 01:01:49,480
Speaker 1: it was a great opportunity. I had the instincts that

1081
01:01:49,520 --> 01:01:54,120
Speaker 1: it was a great opportunity um at the time. But

1082
01:01:55,120 --> 01:01:57,040
Speaker 1: you know, as we talked about a little bit earlier,

1083
01:01:57,680 --> 01:01:59,920
Speaker 1: my entry point to Schwab was pretty unique, and I

1084
01:02:00,560 --> 01:02:03,880
Speaker 1: stepped into an interesting chair as the chief of staff

1085
01:02:03,920 --> 01:02:06,280
Speaker 1: to the vice chairman, and I got to work down

1086
01:02:06,360 --> 01:02:10,800
Speaker 1: the hall from Chuck Chua my office, the office directly

1087
01:02:10,840 --> 01:02:14,560
Speaker 1: next to me was Chuck's driver, and and you know,

1088
01:02:14,720 --> 01:02:17,439
Speaker 1: Chuck would walk by my office every morning, right and

1089
01:02:17,480 --> 01:02:19,760
Speaker 1: he'd say hello, and he'd stopped and sometimes you'd have

1090
01:02:19,760 --> 01:02:22,320
Speaker 1: a chat. And yeah, I think it was just a

1091
01:02:22,440 --> 01:02:27,120
Speaker 1: unique opportunity to join a highly entrepreneurial organization to work

1092
01:02:27,360 --> 01:02:30,400
Speaker 1: down the hall from you know, just somebody having an

1093
01:02:30,480 --> 01:02:33,720
Speaker 1: immense respect for and was part of shape in the industry.

1094
01:02:33,800 --> 01:02:36,680
Speaker 1: And it represented what I was really looking for at

1095
01:02:36,680 --> 01:02:38,800
Speaker 1: the time, even if I couldn't have put words on

1096
01:02:38,840 --> 01:02:41,600
Speaker 1: it in the moment, was to join an industry, join

1097
01:02:41,680 --> 01:02:45,200
Speaker 1: a profession, join a business that had a real purpose,

1098
01:02:45,800 --> 01:02:49,840
Speaker 1: and a purpose that was something other than yourself or

1099
01:02:50,320 --> 01:02:53,960
Speaker 1: or the company itself. Was about serving clients and some

1100
01:02:54,080 --> 01:02:56,600
Speaker 1: things that have become we're at the time and had

1101
01:02:56,600 --> 01:02:58,280
Speaker 1: become a big part of why it's stuck around this

1102
01:02:58,360 --> 01:03:01,480
Speaker 1: industry for so long. So yeah, maybe it would have

1103
01:03:01,520 --> 01:03:04,800
Speaker 1: worked out great. Yeah, you know, maybe it wouldn't. I

1104
01:03:04,800 --> 01:03:06,720
Speaker 1: wouldn't have stucked, and maybe I would have done well.

1105
01:03:06,880 --> 01:03:09,480
Speaker 1: But you know, you can't make those kind of choices,

1106
01:03:09,680 --> 01:03:13,520
Speaker 1: you know, or or kind of use that in hindsight, Well,

1107
01:03:13,520 --> 01:03:15,880
Speaker 1: what if I chose this, I'm I kind of feel

1108
01:03:15,920 --> 01:03:19,520
Speaker 1: like there's probably four or five decisions like that that

1109
01:03:19,640 --> 01:03:22,520
Speaker 1: I've I've made in my career to go right and

1110
01:03:22,560 --> 01:03:25,040
Speaker 1: set a left and in all the past would have

1111
01:03:25,080 --> 01:03:27,800
Speaker 1: been would have been great. Right. So you just youve

1112
01:03:27,800 --> 01:03:30,000
Speaker 1: got to enjoy the road you're on and enjoy the

1113
01:03:30,040 --> 01:03:32,840
Speaker 1: journey and enjoy the opportunities that you have right now

1114
01:03:32,880 --> 01:03:35,480
Speaker 1: and not not look back on anything like that with regret.

1115
01:03:35,480 --> 01:03:38,760
Speaker 1: I certainly don't. I like that philosophy. I don't know

1116
01:03:38,800 --> 01:03:41,680
Speaker 1: if you've had the same experience, but I've had to

1117
01:03:41,720 --> 01:03:45,400
Speaker 1: convince people that Charles Schwab is a real guy and

1118
01:03:45,440 --> 01:03:47,560
Speaker 1: the person you see on TV is not an actor.

1119
01:03:48,160 --> 01:03:50,880
Speaker 1: Have you ever had people raise that question with you?

1120
01:03:51,440 --> 01:03:54,840
Speaker 1: I actually haven't, But you know, he he is this

1121
01:03:55,000 --> 01:03:57,800
Speaker 1: you know, larger than life figurehead, right, and this this

1122
01:03:58,000 --> 01:04:02,760
Speaker 1: huge company that's his namesake, UM, which which is interesting.

1123
01:04:02,800 --> 01:04:06,360
Speaker 1: You know. The interesting thing about Chuck and is uh,

1124
01:04:06,480 --> 01:04:09,600
Speaker 1: he's quite shy, right, you know, So he's and I

1125
01:04:09,640 --> 01:04:12,240
Speaker 1: don't mean that as a sperience. He's you listen to

1126
01:04:12,320 --> 01:04:14,520
Speaker 1: every word that he says and meeting so it's I

1127
01:04:14,840 --> 01:04:17,720
Speaker 1: just think I look back on that with so much fondness,

1128
01:04:17,760 --> 01:04:20,280
Speaker 1: and that's something that I hope to represent in the

1129
01:04:20,800 --> 01:04:23,600
Speaker 1: in a CEO chair. Now you got to look at

1130
01:04:23,640 --> 01:04:28,000
Speaker 1: how he made decisions internally, and it was always about

1131
01:04:28,000 --> 01:04:33,160
Speaker 1: the clients right and him mathematically. Some decisions were very

1132
01:04:33,240 --> 01:04:37,120
Speaker 1: brave from from a financial perspective. That you be sitting

1133
01:04:37,120 --> 01:04:39,320
Speaker 1: and meetings and there'd be an intense debate over a

1134
01:04:39,320 --> 01:04:42,640
Speaker 1: particular issue, and Chuck could just be quiet for forty

1135
01:04:42,680 --> 01:04:45,480
Speaker 1: five minutes of the beating and he finally just lean

1136
01:04:45,560 --> 01:04:49,360
Speaker 1: in and very quietly say, look, there's only one choice here,

1137
01:04:50,600 --> 01:04:54,440
Speaker 1: what what's right for the client? And um, you know,

1138
01:04:54,520 --> 01:04:56,840
Speaker 1: it's such a great environment to have had the great

1139
01:04:56,920 --> 01:05:00,640
Speaker 1: fortune and to to grow up in and those kind

1140
01:05:00,680 --> 01:05:04,240
Speaker 1: of decisions made right. Business. Business is about a lot

1141
01:05:04,240 --> 01:05:06,600
Speaker 1: of things, but at the core, it's hard to build

1142
01:05:06,600 --> 01:05:08,760
Speaker 1: a great business if you're not doing the right thing

1143
01:05:08,800 --> 01:05:11,920
Speaker 1: for clients, and clients don't like you, and your employees

1144
01:05:11,960 --> 01:05:14,640
Speaker 1: don't like coming to work. So um, yeah, I think

1145
01:05:15,080 --> 01:05:17,440
Speaker 1: those are those are really important things. So I take

1146
01:05:17,480 --> 01:05:19,920
Speaker 1: away from now quite interesting. I know I only have

1147
01:05:20,000 --> 01:05:22,520
Speaker 1: you for a few more minutes, So let's jump to

1148
01:05:22,560 --> 01:05:25,600
Speaker 1: our speed round. These are our favorite questions we ask

1149
01:05:26,040 --> 01:05:29,160
Speaker 1: all of our guests, and we run through them quickly.

1150
01:05:29,480 --> 01:05:32,880
Speaker 1: Let's jump into them. We're all working from home these days.

1151
01:05:33,080 --> 01:05:37,080
Speaker 1: What are you streaming? What do you doing to entertain yourself?

1152
01:05:37,080 --> 01:05:42,160
Speaker 1: Give us your favorite Netflix or Amazon Prime shows you're watching. Well,

1153
01:05:42,200 --> 01:05:43,880
Speaker 1: I think, like a lot of people, we've burned through

1154
01:05:43,920 --> 01:05:48,360
Speaker 1: just about everything, right, so from from streaming or watching.

1155
01:05:48,480 --> 01:05:53,080
Speaker 1: So I think the the podcast. I'm a big podcast listener.

1156
01:05:53,200 --> 01:05:55,200
Speaker 1: I still like to get out and hike and run.

1157
01:05:55,320 --> 01:05:59,040
Speaker 1: So you know, I love Cereal, both both the classic

1158
01:05:59,320 --> 01:06:02,880
Speaker 1: episodes as well as some of the later series. Um,

1159
01:06:02,960 --> 01:06:05,680
Speaker 1: you know, I love how stuff works. Um yeah, I

1160
01:06:05,720 --> 01:06:08,800
Speaker 1: love sort of learning and getting something that's really out

1161
01:06:08,800 --> 01:06:11,880
Speaker 1: of field and out of out of industry, right from

1162
01:06:11,880 --> 01:06:15,720
Speaker 1: from a learning perspective. My son and I started rewatching

1163
01:06:15,720 --> 01:06:18,439
Speaker 1: old old episodes in the office together, which is which

1164
01:06:18,440 --> 01:06:20,280
Speaker 1: is I had a lot of fun. He's fifteen, and

1165
01:06:20,560 --> 01:06:22,480
Speaker 1: it's fun to go back and sort of have that

1166
01:06:22,560 --> 01:06:26,880
Speaker 1: moments of nostalgia and rewatch some things. Because again we've

1167
01:06:26,920 --> 01:06:30,360
Speaker 1: we've burned through so many different different mini series. I'm

1168
01:06:30,400 --> 01:06:33,520
Speaker 1: looking for some recommendations too. I'll shoot you a list

1169
01:06:33,520 --> 01:06:36,960
Speaker 1: of my favorites. Uh. Let's let's jump over to mentors

1170
01:06:36,960 --> 01:06:41,400
Speaker 1: who helped shape your career. Well, we talked about Uh,

1171
01:06:41,680 --> 01:06:44,280
Speaker 1: you know career. We talked about some of the experiences

1172
01:06:44,320 --> 01:06:46,400
Speaker 1: that I had a swab in other places. I think

1173
01:06:46,480 --> 01:06:48,360
Speaker 1: the the thing that I think of a lot, and

1174
01:06:48,400 --> 01:06:52,320
Speaker 1: particularly this year is my mom um uh and my mom.

1175
01:06:52,560 --> 01:06:55,760
Speaker 1: My mom passed away earlier this year, not COVID related,

1176
01:06:55,880 --> 01:06:59,200
Speaker 1: just from age and and wear and tear. So you know,

1177
01:06:59,240 --> 01:07:01,640
Speaker 1: it's gave me a lot a chance to reflect on

1178
01:07:01,760 --> 01:07:05,560
Speaker 1: the lessons that that she taught me that are more

1179
01:07:05,600 --> 01:07:08,720
Speaker 1: important than than business and life. So she's a Kiwi.

1180
01:07:08,920 --> 01:07:12,360
Speaker 1: She's a New Zealander. The first moved to London, then

1181
01:07:12,400 --> 01:07:14,880
Speaker 1: moved to New York in her early twenties and you

1182
01:07:15,040 --> 01:07:16,840
Speaker 1: met my dad and stayed. But but like a lot

1183
01:07:16,840 --> 01:07:20,440
Speaker 1: of Kiwi's, she's this intrepid spirit. She was an adventurer

1184
01:07:21,400 --> 01:07:24,280
Speaker 1: um did a lot of mountain climbing and skiing uh

1185
01:07:24,440 --> 01:07:27,480
Speaker 1: in New Zealand that you became part of a family tradition.

1186
01:07:27,720 --> 01:07:30,640
Speaker 1: But like a lot of Kiwi's into all my family

1187
01:07:30,640 --> 01:07:32,040
Speaker 1: that are in that part of the world, they have

1188
01:07:32,160 --> 01:07:37,640
Speaker 1: this this wonderful elegance to enjoy life, to live life

1189
01:07:37,720 --> 01:07:41,560
Speaker 1: and not worry about sort of the little things and

1190
01:07:41,600 --> 01:07:43,920
Speaker 1: the clear things true in an incredible sense of humor.

1191
01:07:44,040 --> 01:07:47,920
Speaker 1: So I think as we've gotten into and you know,

1192
01:07:47,960 --> 01:07:51,240
Speaker 1: not only the loss of her, but sort of all

1193
01:07:51,280 --> 01:07:54,400
Speaker 1: the other challenges you were facing. So as this this

1194
01:07:54,840 --> 01:07:59,000
Speaker 1: you know, disposition right to sort of enjoy, enjoy the

1195
01:07:59,040 --> 01:08:02,200
Speaker 1: journey you're on other than you know, regrets or worries

1196
01:08:02,320 --> 01:08:05,120
Speaker 1: or whatever where challenge you're facing, just to overcome it.

1197
01:08:05,200 --> 01:08:08,480
Speaker 1: She was she tough cookie. Um, so you know she's been.

1198
01:08:08,600 --> 01:08:10,920
Speaker 1: She's in my beacon throughout this year. Tell us about

1199
01:08:10,960 --> 01:08:13,000
Speaker 1: some of your favorite books. What are you reading now

1200
01:08:13,040 --> 01:08:16,120
Speaker 1: and what are your some of your old time favorites. Yeah,

1201
01:08:16,200 --> 01:08:17,960
Speaker 1: I think you know. I'm a huge I was a

1202
01:08:18,040 --> 01:08:22,160
Speaker 1: huge fan of the Gladwell books. Um, you know nothing Gladwell's.

1203
01:08:22,320 --> 01:08:25,360
Speaker 1: Of course, there's sort of a lesser known for folks

1204
01:08:25,360 --> 01:08:28,120
Speaker 1: that like those that I've I've reread this year because

1205
01:08:28,120 --> 01:08:31,960
Speaker 1: I enjoyed it so much. Called The Talent Code and

1206
01:08:32,120 --> 01:08:35,679
Speaker 1: the Culture Code by by Daniel Coyle. So a couple

1207
01:08:35,680 --> 01:08:38,519
Speaker 1: of great books that that build on some of the

1208
01:08:38,600 --> 01:08:42,120
Speaker 1: principles that Gladwell talks about. So the Talent Code short

1209
01:08:42,240 --> 01:08:45,320
Speaker 1: version and everybody knows the ten thousand hours Gladwell talks about.

1210
01:08:45,800 --> 01:08:48,280
Speaker 1: Daniel takes that a couple of steps further and talks

1211
01:08:48,320 --> 01:08:52,400
Speaker 1: about actually how those ten thousand hours really should work UM,

1212
01:08:52,520 --> 01:08:55,760
Speaker 1: and how the brain works when it's learning. It's not

1213
01:08:55,840 --> 01:09:01,240
Speaker 1: just the hours, it's actually the kind of practice, purposeful practice,

1214
01:09:01,280 --> 01:09:03,799
Speaker 1: and a key part of practice is actually making mistakes,

1215
01:09:04,280 --> 01:09:07,240
Speaker 1: so we learn more when we're making mistakes, the way

1216
01:09:07,280 --> 01:09:10,280
Speaker 1: the brain actually works to be able to learn. So

1217
01:09:10,320 --> 01:09:13,120
Speaker 1: I think it's a really important principle to hold when

1218
01:09:13,160 --> 01:09:15,800
Speaker 1: you're trying to build a growing enterprise. You're just just

1219
01:09:15,920 --> 01:09:19,120
Speaker 1: navigating life. It's not about being perfect. It's actually about

1220
01:09:19,160 --> 01:09:23,080
Speaker 1: the experimenting and learning from those experiments about what worked

1221
01:09:23,080 --> 01:09:27,040
Speaker 1: and what didn't. The Culture Code builds that into the

1222
01:09:27,120 --> 01:09:30,639
Speaker 1: power of small teams and how teams in general should

1223
01:09:30,640 --> 01:09:33,800
Speaker 1: operate UM. Some of the key principles about keeping it

1224
01:09:33,880 --> 01:09:39,599
Speaker 1: very flat, about creating safety and vulnerability and honesty UM

1225
01:09:39,640 --> 01:09:43,200
Speaker 1: in that environment. So a lot of great vignettes throughout,

1226
01:09:43,720 --> 01:09:46,760
Speaker 1: So highly recommend both of those and their good rereads.

1227
01:09:47,160 --> 01:09:50,640
Speaker 1: In the environment we're in, Huh quite interesting. I'm in

1228
01:09:50,680 --> 01:09:55,040
Speaker 1: the middle of a recent Gladwell book called Talking to Strangers,

1229
01:09:55,080 --> 01:10:00,879
Speaker 1: which really makes sense, and Uh, this period of political discord,

1230
01:10:01,040 --> 01:10:04,439
Speaker 1: I'm finding it quite quite intriguing. Every everything he writes,

1231
01:10:05,200 --> 01:10:09,160
Speaker 1: is always a fascinating narrative. He tells really interesting stories.

1232
01:10:10,280 --> 01:10:12,559
Speaker 1: What sort of advice would you give to a recent

1233
01:10:12,760 --> 01:10:18,559
Speaker 1: college grad who was interested in a career in financial services? Yeah,

1234
01:10:18,680 --> 01:10:21,400
Speaker 1: I think there's the general advice i'd give, and then

1235
01:10:21,439 --> 01:10:25,360
Speaker 1: specific to this industry, it definitely applies, is join an

1236
01:10:25,360 --> 01:10:28,439
Speaker 1: industry that's growing and interesting to you. Join a company

1237
01:10:28,479 --> 01:10:33,080
Speaker 1: that's making a dent um and and growing um as well.

1238
01:10:33,479 --> 01:10:36,920
Speaker 1: Worry a little bit less about the position, right, the

1239
01:10:37,000 --> 01:10:39,920
Speaker 1: specific role right. So I've had the fortune to join

1240
01:10:39,960 --> 01:10:43,200
Speaker 1: a great industry, to join great companies that were in

1241
01:10:43,240 --> 01:10:47,639
Speaker 1: those industry. All those things created opportunities for me well

1242
01:10:47,680 --> 01:10:50,360
Speaker 1: beyond the first job that I got as part of

1243
01:10:50,360 --> 01:10:54,200
Speaker 1: those organizations. So um simplified version of all that is,

1244
01:10:54,280 --> 01:10:57,680
Speaker 1: growth is really important. So a lot of great, very

1245
01:10:57,720 --> 01:11:00,160
Speaker 1: talented millennials that work for us, The best thing I

1246
01:11:00,160 --> 01:11:02,439
Speaker 1: can do for them is to have an enterprise that's

1247
01:11:02,479 --> 01:11:06,720
Speaker 1: growing um and gives them opportunities to jump around in

1248
01:11:06,760 --> 01:11:10,200
Speaker 1: a ladder or two, maybe even before they think they're ready. Right,

1249
01:11:10,240 --> 01:11:12,800
Speaker 1: So those are that's really really critical. I think this

1250
01:11:13,000 --> 01:11:17,160
Speaker 1: profession is changing, right, So this profession has become more

1251
01:11:17,200 --> 01:11:20,920
Speaker 1: about client care in that bedside manner, if you will,

1252
01:11:20,920 --> 01:11:24,080
Speaker 1: of working with clients, then it has become about the math. Right,

1253
01:11:24,160 --> 01:11:27,160
Speaker 1: So I think the financial service industry the urgent. Yet

1254
01:11:27,200 --> 01:11:30,120
Speaker 1: this is really ultimately about caring for clients and helping people,

1255
01:11:30,400 --> 01:11:33,479
Speaker 1: and and that's where the industry is going. That's where

1256
01:11:33,479 --> 01:11:37,240
Speaker 1: our professionals are going. That the math is still critically important,

1257
01:11:38,000 --> 01:11:40,240
Speaker 1: but the mask can be done by machines, the mask

1258
01:11:40,320 --> 01:11:43,040
Speaker 1: can be done by focus groups of people, whether that's

1259
01:11:43,080 --> 01:11:46,280
Speaker 1: on our investment team or other or accounting team, um

1260
01:11:46,360 --> 01:11:49,240
Speaker 1: in two areas. But I think that's where the industry

1261
01:11:49,280 --> 01:11:51,280
Speaker 1: is changing, and I think in a very very positive way.

1262
01:11:51,720 --> 01:11:54,479
Speaker 1: And our final question, what do you know about the

1263
01:11:54,520 --> 01:11:57,719
Speaker 1: world of investing today that you wish you knew twenty

1264
01:11:57,720 --> 01:12:01,320
Speaker 1: five years or so I ago? When you refer getting started, well,

1265
01:12:01,360 --> 01:12:03,959
Speaker 1: I think it's just that just open up the account

1266
01:12:04,080 --> 01:12:09,120
Speaker 1: and get started. I think as an industry, we there

1267
01:12:09,200 --> 01:12:13,240
Speaker 1: is complexity, but you sometimes wonder whether it's created complexity

1268
01:12:13,320 --> 01:12:17,000
Speaker 1: or whether the complexity is real. And and they're right.

1269
01:12:17,000 --> 01:12:20,080
Speaker 1: I can remember sitting with my dad once. I had

1270
01:12:20,160 --> 01:12:22,599
Speaker 1: some means and you know, had a couple of good

1271
01:12:22,600 --> 01:12:26,799
Speaker 1: summer jobs painting houses, and you know, had some for

1272
01:12:26,800 --> 01:12:29,120
Speaker 1: for college kids, some good income for that. And I'm like, well,

1273
01:12:29,160 --> 01:12:31,880
Speaker 1: what should I do with this? And I remember it's

1274
01:12:31,920 --> 01:12:37,880
Speaker 1: feeling very complicated and intimidating, and fortunately, you know, pushed

1275
01:12:37,880 --> 01:12:40,679
Speaker 1: all the papers aside and all the different fund choices aside,

1276
01:12:40,720 --> 01:12:43,479
Speaker 1: and he said, let's just do this, like, let's just

1277
01:12:43,560 --> 01:12:46,439
Speaker 1: open the account and let's just make this one investment

1278
01:12:46,479 --> 01:12:48,320
Speaker 1: and we'll see how it goes. I think, just just

1279
01:12:48,400 --> 01:12:52,000
Speaker 1: get started. Um, it's not as scary as as you

1280
01:12:52,040 --> 01:12:55,479
Speaker 1: think it is. And there's there's no substitute for best

1281
01:12:55,520 --> 01:13:01,080
Speaker 1: investment strategy to start early and have patients right. So that's, um,

1282
01:13:01,120 --> 01:13:03,280
Speaker 1: that's really key. And I think I think all of

1283
01:13:03,360 --> 01:13:06,200
Speaker 1: us to take hard end right. The complexity that surrounds

1284
01:13:06,200 --> 01:13:08,479
Speaker 1: this industry, how do we how do we simplify it

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01:13:08,520 --> 01:13:11,120
Speaker 1: and get get our clients and others to make some

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01:13:11,800 --> 01:13:15,080
Speaker 1: very fundamental, basic decisions that are to be really important

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Speaker 1: for them for the long term. Fascinating stuff. Dave, thank

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Speaker 1: you for being so generous with your time. That was

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Speaker 1: Dave Wellen. He is the CEO of Mercer Advisers, a

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Speaker 1: firm that runs about twenty one billion dollars in assets.

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Speaker 1: If you enjoy this conversation, Well, be sure and check

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Speaker 1: out any of the previous seventy five or so we've

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Speaker 1: had over the past six years. You can find that

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Speaker 1: at iTunes, Spotify, wherever you get your podcast fixed satisfied.

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Speaker 1: We love your comments, feedback and suggestions right to us

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Speaker 1: at m IB podcast at Bloomberg dot net. Give us

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Speaker 1: a review on Apple iTunes. You can sign up for

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Speaker 1: my daily reading list at ridals dot com. Check out

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Speaker 1: my week the column on Bloomberg dot com slash Opinion.

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Speaker 1: Follow me on Twitter at rid Holts. I would be

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Speaker 1: remiss if I did not think our crack staff that

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Speaker 1: helps put these conversations together each week. Rufal is my

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Speaker 1: audio engineer. Michael Boyle is my producer. Michael Batnick is

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Speaker 1: my head of research ATKA. Valabrunn is our project manager.

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Speaker 1: I'm Barry Riholts. You've been listening to Masters in Business

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Speaker 1: on Bloomberg Radio.