EPISODE 29

[00:00:11] Luke Sonnen: Hi, I’m Luke Sonnen. Welcome to The COO Roundtable powered by PFI Advisors. Here’s your host, Matt Sonnen.

[00:00:24] Matt Sonnen: Welcome back everyone to Episode 29 of the COO Roundtable. Last month, we took a step back from our normal structure of interviewing two COOs at RIAs and instead spoke with Tony Parkin and Nikolee Turner from Schwab’s Business Consulting Group. When we launched the podcast, I thought it was important that we only interviewed folks that were sitting in the seat. I didn’t want to theorize about the role of professional management at RIAs.

I thought it was imperative that we only interview those that were at RIAs, who were dealing with these issues on a day-to-day basis, but I have to say, I found it incredibly insightful to, every once in a while, get out of the weeds and go up to that 10,000-foot level and speak with folks about the role of the COO and about the importance of professional management. With those conversations, we’re able to ask, “Where do RIAs get things wrong? What are some of the common mistakes RIAs make when trying to bring in professional management to free up the advisors to focus solely on clients and prospects?”

I thought that conversation last month was fantastic. We’ll continue to do that every once in a while. We’ll bring in consultants like that, who aren’t necessarily sitting in the COO chair, but who can talk about the benefits of professional management in our industry. I thought that episode was really great, but today we’re back to our normal format and we have two highly accomplished RIA professionals with us. They are going to share their insights gleaned from years in the operation seat, and we’ll all learn a lot from them.

From Colony Group (Colony is headquartered in Boston) we have the COO and general counsel, Gina Bradley, and in Chicago from Balasa Dinverno Foltz, (we’re just going to call it BDF) is the COO and CCO, Susan Corrine. Gina and Susan, thank you both for being here.

[00:01:59] Gina Bradley: Thanks for having me.

[00:01:59] Susan Corrine: Thank you.

[00:02:00] Matt: Awesome. Susan, I’m going to go to you first. I was introduced to you and BDF through Adam Larson. We had worked with Adam at his former firm, and when he joined his new firm, he introduced you and I. That’s how I got introduced to the firm, but I think many people probably know the name. One, it’s very hard to pronounce, but I think most people know the name because last summer – .

[00:02:22] Susan: You did a good job.

[00:02:24] Matt: Oh, thank you. Last summer, you guys made headlines. You partnered with CI Financial, and everybody knows CI Financial has been in the news a lot over the past 18 months or so. Many people probably know the name from that, but why don’t you go ahead and tell us a little bit more about the firm.

[00:02:39] Susan: Sure. Thank you. Well, I’ll go backward first before I talk about the CI partnership. We were founded in 1986. We have been around for a while and we’re currently at about 5.3 billion in AUM. We have 67 team members. When we think about an ideal client, we usually look in that $2 to $20 million AUM space, and we’re really looking at people who are interested in long-term investing. We’re not market chasers, we’re not market timers. It’s all about investing. It’s about planning and, really, we want to help people achieve their life’s dreams.

It’s not just about helping them achieve a certain investment protocol. That’s really who we look at for our ideal client. When I think about the evolution of BDF, the history of BDF, really all of our growth has historically been organic with the exception of a merger in 2001 which really brought the founders, the BD and the F if you will, together, all of our growth has been organic. Our founders really knew that to be a healthy, viable firm, we needed to grow and not only grow based on their capabilities of bringing in business but really spreading that out and having a lot of people across the firm be able to contribute to our growth.

That’s been a focus of ours for many years, and we’re really becoming successful at that. Then when I think about what’s at the heart of BDF, just from a cultural perspective, but also how we think about growth, it really comes down to our mission and our vision. Our mission is to help people enjoy a full life. Then our vision is all about our team. Then if we can live our mission and vision, well, then everything else falls into place. I would say we’re highly focused on attracting and retaining top talent.

We need to be able to passionately serve our clients at a very high level, and that’s all about the people on our team. We’re very thankful, and lucky, I guess, to have been recognized as one of the best places to work environment for many, many years now, both through InvestmentNews and Crain’s Chicago Business and really we focus on those things to make sure that we have an environment that people want to come to BDF, but also want to stay there. I think most importantly, too, once we find those people, then it’s really about training and education and coaching and providing a viable career path for them.

Like I said before if we’re focusing on our mission, serving our clients and we’re focusing on our vision of serving our team, everything else falls into place. As we looked at what our future looked like and our decision to partner with CI, it was largely because we felt like there was a lot of cultural alignment there. That was one of our driving forces in terms of identifying who we wanted to work with in the years and the decades to come. I have to say CI has proven to be a wonderful partner, we actually joined forces with them last September. I can’t say enough things about it. It’s been a great partnership.

[00:05:27] Matt: I love that what you say about if you’re living your mission, everything else just falls into place. This week, I was listening to when Michael Kitces was a guest on Mindy Diamond’s podcast. He said the same thing throughout their conversation. He kept using the same phrase over and over again. If the vision is clear, the decisions get easy and that’s basically what you’re saying. I think that’s so powerful. I love that.

[00:05:47] Susan: Yes, I agree.

[00:05:48] Matt: Gina, obviously I met you in the Colony Group back when I was with Focus Financial. Colony Group is one of the larger firms and one of the best-known firms within the Focus family. Tell us a little bit about Colony.

[00:06:01] Gina: Sure, I’m happy to. Like Susan, I’ll step back a little bit to the pre-Focus days. The Colony Group is celebrating its 35th anniversary this year also, having been founded in ’86. We have since then developed into a national firm with 15 offices, we’ve got over 260 employees. Our assets under management are just over $13 billion at this point, along with that sort of numbers-based growth, we’re actually really proud of the development of our service model and that spans a wide profile of clients.

At our founding, we offer asset management and financial planning, and now 35 years later, we also offer a full suite of tax compliance services, family office, business management, institutional asset management. The core asset management and financial planning offering, which does specialize in high net worth and ultra-high net worth families, that core has also matured and now includes specific expertise for clients who are corporate executives, entrepreneurs, and business owners, entertainers, and professional athletes to name a few.

The ideal client ends up being quite a wide spectrum of what that could be based on their profile and then where that could fit into one of the verticals of our service at Colony. I actually loved the way Susan, you just talked about your mission and vision as well. When we develop our service model, it’s the same, it’s based on our mission. Our mission, we always talk about is “meaning and joy”. Again, just like BDF, we think about it from the client’s perspective and our employee’s perspective. We want to be a place that seeks to bring meaning and joy to the lives of others whether that person is a client or an employee who has joined our team.

That philosophy reaches into our growth strategy. Those growth areas, the service areas have been really intentional. Our strategic plan has gone through multiple iterations over the last several years. It always maintains both an organic growth prong as well as an inorganic growth prong. Our goal is for excellence in both of those areas. Since 2012, Colony has completed 12 mergers or strategic hires, and each one has had a strategic rationale rooted in what we’ve dubbed our “better than before” approach to mergers.

The combinations were not about growth for growth’s sake or the numbers, getting those statistics up there, but they’re about ways that Colony and our merger partner can enhance our collective offering after combining forces. As we grow and change, yes, the strategic plan will as well, but I’d venture to say, we likely will always continue the dual approach of the organic and the inorganic growth goals.

[00:08:37] Matt: Better than before, I love it as opposed to more AUM. That’s usually the goal of every acquisition. Well, we just want more AUM, but better than before.

[00:08:49] Gina: No, that does happen, but you can see how that’s not necessarily a guiding light for us. That’s more of, yes, that happens but if we are made better by our strategic partner and they’re made better by us, then we firmly believe that leads to long-term success when we’re bringing these two families together, these are often their long-term firms that people have grown up together. If we are better than before together, we’re much more comfortable on day one, knowing that lots of days from now, we’re still going to be in a good place.

[00:09:20] Matt: That’s awesome. I love it. I’m going to stay with you, Gina. I always joke, I stalk everybody on LinkedIn before we do these interviews. You’ve been at Colony for 15 years now and it looks like you joined them right out of law school. You came into the COO role actually through the general counsel seat. You were general counsel first and then slowly took over the COO role. Can you talk to us about that progression?

[00:09:44] Gina: Sure, you stalked correctly, Matt. I did join Colony as associate general counsel in 2005, right out of law school. A lot of colleagues in the legal profession have asked me since then, like, “How did you get to go in-house right out of school?” I take zero credit for that and have only providence to thank. At the time I was with a small legal team that was comprised of Colony’s general counsel, and chief compliance officer. I was number three, but it just so happened that Michael Nathanson, our current CEO was that general counsel and Vincent Gratch still our CCO was that he was the CCO at the time.

In my opinion, I came in and was just mentored by the best professionals and frankly, some of the best human beings in the RIA world. I was so blessed by that – right from the get-go fabulous mentoring. We had some leadership changes at Colony within my first couple of years, and I was promoted to general counsel in 2007. It was really in that role with an entrepreneurial leadership team around me who was committed to my flourishing that, as they say, the world was my oyster, I was given the opportunity to have a formal role on the finance team.

I just generally jumped into learning the business as a whole. They were really intentional about it. I remember distinctly walking into the office and I was talking to Michael, who was the president at the time and the chair of our board at the time and it wasn’t even review season, but they said, “We’ve been watching you work. How would you feel about taking a formal role in finance?” I said, “Great, I’d love to. I need to go take an accounting course.” So, I went to the Harvard Extension School so that I could take a formal accounting course.

They said, “Great, go for it. We like what you’re doing. We like the fact that you want to know more and contribute more.” They really supported me in that. I’m really the product of intentional internal succession planning because then when our longtime COO retired in 2011, I had been prepared to take on that role alongside the general counsel role. I always laugh about it though, thinking about that progression of it, because I definitely did not realize the full scope of the COO role at the time, but I am glad I was blissfully unaware because I don’t think I could have been prepared for it in that moment anyway.

It’s a bit like parenting, you get into it before you know what’s really going to be required of you and then you just learned it as you go. As Colony has grown, I have certainly grown in the COO role, and for now, I continue to wear both hats, albeit with a larger team around me and just some awesome colleagues and team members that I could not live without.

[00:12:20] Matt: That’s the first time I’ve heard the parenting analogy, but it’s so true. It’s, “be careful what you wish for” people get offered the COO job. If you really knew [laughs] how difficult it could possibly be, you might not take it, which is the same thing as parenting. I love it. Susan, like Gina, you’re juggling dual roles. You’ve got compliance responsibilities as well as operations. Again, my stalking, you joined BDF ten years ago from outside the industry, so give us a bit of your background and how you wound up with those dual roles that you’re holding today.

[00:12:52] Susan: Sure. I had an interesting journey and certainly, when I joined BDF, none of my background had been in financial (services). I actually, out of college, started at an advertising agency. That was what I wanted to do when I was going to grow up and so I went from there and then I went to a company that was in publishing, print and digital publishing research, that kind of thing. I ended up being the CEO there and then I went to a firm as president, that publishes psychometric assessments.

If you think about psychological tests that are used for hiring and career development, things like that, that’s what we published. BDF hired me because of my experience in running a company and that’s what they were looking for. They were looking for somebody who had operational understanding, finance understanding, managing people, that type of experience. When I came to BDF, I actually replaced, there was a director of operations, but there was a recognition that to continue to support the growth of the firm, we needed to bring somebody in at a higher level.

I came in as a COO and to Gina’s point, every day is a learning day. Whether that is through the role that I day-to-day cover or just compliance or investments, or I always tell people when they hear I work for a wealth management firm because I’m not client-facing, I’m not an investment person, but I know enough to be dangerous. I’ve loved my time at BDF. It’s an awesome company. It’s an awesome firm. I loved hearing Gina, how she was talking about the people that mentored her, the mentoring that I got from our president, who just recently retired, Armond Dinverno, was amazing.

When I think about all the resources and time that he gave to me, which were very special to me, but came into this role. When I came in, we were at about $1.7 billion, so it was different needs in terms of support and it was sort of like, okay, I’m managing everything, everything from operations to HR, finance. We did have another CCO at the time. I didn’t take the CCO hat until probably, I don’t know if it was three, maybe four years after I joined the firm, but I was wearing a lot of hats at the time. Really, the recognition of what we needed to create and build out from an infrastructure standpoint to support a growing firm was what we’ve been working on, I would say the past six to seven years.

We recognized that we needed more than just me. One person can only do so many things, there’s limited time in a day. We worked at building out an executive team. We now have 6 people on our executive team that covers operations and compliance, which is myself, investments, planning, client delivery, client experience, and growth, and then technology. It’s really been roofed for all of us, understanding that as the firm grows, we need to have people who specialize in different areas and so like I said, it’s been a great journey for me, very thankful that I found a BDF and that BDF found me.

We continue to look forward to the future in terms of “how do we build out the firm and how do we support what we see as significant growth in the years to come?”

[00:15:51] Matt: You both touched on it already in your answers, but I always joke that the COO’s job description is basically just do everything around here that’s not getting done and that’s usually a very long list of items that cover HR, technology, business administration. In some cases, it involves furniture, assembly, and electrician work. I always say a good sense of humor is vital for a COO as well as some really good time management skills. In addition to your electrician skills and your furniture assembly tasks, you both have those, we talked about the legal and compliance roles as well.

Gina, I’ll ask you first, how on earth do you get everything done every single day?

[00:16:34] Gina: I don’t, not even close. It is a rare day when I lay my head down and rest easy thinking I’ve done enough for the day. I tell you that, not because I think I am unique or special, or I work harder than anybody, but it’s because actually, I don’t think it’s much different than what others experience in my role. I figured I might as well be honest with you and offer a shared sense of comradery in the challenge, instead of pretending that I get to check off all the things every day. It’s actually something I struggle with a bit because you are completely right about the description of the COO role.

It’s one of the things I like about it, that it’s always something different. You joked about furniture assembly. We have lots of office moves. One of my favorite things is just infrastructure management and maybe a new office and helping in the design of things, which is completely different from thinking about client service models or technology. It’s everything from technology and HR to that office management, lease management, partnership matters. I guess I always come back to the fact– and I’m growing this, this is one of my growth areas.

I come back to the growth area and the fact that my assessment of “getting everything done” is really a choice on my part. We at the Colony Group use the 15 Commitments of Conscious Leadership as a construct for culture. It’s a book that we all have read, and we offer new employees the opportunity to read as well. We have forums around it and one of the commitments or one of the choices of conscious leadership is to choose the experience of I have enough of everything including time. For me, just my own application, the commitment also includes the choice to believe that I am enough for Colony, for our team, for our clients, for my family, frankly.

If I move into my day really believing and choosing to believe that I’m enough, if I put in my best effort, then whatever I get done that day is also enough. Some days, that “getting everything done” looks like your typical packed calendar, where you got back-to-back calls and meetings (Zooms now).with a whole lot of unread e-mails to tackle after my kids go to bed. Other days, I do get to have that satisfying feeling of checking off to-dos that are on my list for a while. Not going to lie — it’s one of my favorite things, to check (items) off my to-do list.

Other days I have to think “enough” just looks like having that one hard conversation with a colleague that maybe I had been dreading, but being thankful that it went well. I have had to shift my mentality so that it’s not about getting everything done, but it’s about redefining daily and a discipline for myself – what “enough is enough” means for me – and then being supported in that by my partners and my team. They are supportive. I often think about people asking me when I’m in stressor moments like that I haven’t done enough.

I say, “Well, who is telling you, you haven’t done enough?” and basically 10 times out of 10 it’s just me. It’s the voices in my own head. I’m super thankful that my partners and the team around me have encouraged me that I have enough and so despite not getting everything done, that it still seems to work.

[00:19:46] Matt: That’s great, and I love the honesty that, everyone listening to this, I think struggles with the same thing. I love it. Susan tell us your strategy for tackling your to-do list every morning.

[00:19:55] Susan: I think one of the benefits of the COO role is and I’m sure Gina has experienced, obviously this, you see the whole firm. You see everything across the firm and so it does give you a different perspective. It gives you experience in everything, but it also lets you see things from a higher level, if you will like. Like Gina, like probably everybody listening to this podcast, my to-do list is never-ending.

As soon as I get to a point where I think, “Wow, this is getting close,” five things that are immediately needing my attention pop up. Frankly, I don’t get it done all as well, and the way that I think about it is it’s really just a constant juggling of reprioritization. Like Gina, like the Colony Group, we are really big on certain books and supporting people and helping grow their mindset and that kind of thing. We’re big believers in a growth mindset. One of the books that we have that we give everybody when they join BDF is called the Four Agreements and one of those agreements is always do your best.

When I look at things, particularly, maybe if I have a day that I’ve been working a ton, but feel like I just didn’t get accomplished what I wanted to, I have to fall back and say, “did I do my best?” Sometimes that has to be good enough because you do have your family. You do have things you have to stop working for at some point. One of the things that we’ve tried to help our team with, which of course has helped me with as well, several years ago, we recognized that we needed to give people time on their calendar to work. When I say work, I’m not talking about being in client meetings.

It’s like actually quiet time to work. This is a big project that we worked on where we created what we call PWT, which is private work time. People can put the PWT on their calendar and we literally have them put it on their calendar. Maybe it’s an hour. Maybe it’s two hours, at least two to three times a week. Unless something really urgent, a client issue comes up or some sort of emergency that we have to deal with, unless that happens, then that’s supposed to be time that people don’t disturb you. You shouldn’t call somebody first. You should look at their calendar to see if they’re in PWT.

You shouldn’t schedule meetings during their PWT. It doesn’t happen all the time, no, but we really are trying to create an environment where people have solid, quiet time that they can work. Coupled with that, which is I try to do at least a few times a day during the week, it’s really, to me about, I’ve got typically on Fridays when my schedule is usually a little bit lighter. I’ll look a week or two in advance. What’s coming up. What projects am I working on? What deadlines do I need to hit? What meetings do I have? What kind of planning do I need to do to hit those goals and to hit those deadlines?

I just, again, take a little bit broader view on what those two weeks might look like, then it’s about, “what do I need to accomplish in this next week?” That list can be pretty long. Every day it’s, “what are the three to five things I need to accomplish today or tomorrow?” It really is at the end of every day, looking at that list. Sure I get the satisfaction of crossing a few of those things out, but more than likely I’m reworking that list because new things have come up, different things, more important things.

To me and to everybody really, I guess, it’s about the most important things. Sometimes the most urgent or the most pressing things are not necessarily the most important. You really do have to think about what are the most important things and what are the things that only I can do because it may be easier for me to do something, but if I hand it off, if I delegate it, A, I’m getting it off my plate, B, I’m giving somebody else an opportunity to work on something. I really do try to look at things through a lens of, “Is this just something that I can do or can somebody else do it?”

We do a lot of work at BDF about good and proper delegation and what does that look like and how it helps you, plus how it helps the team that you’re working with. It’s easy to fall away from it. It really does require some discipline, but it’s important. I think the other thing as I think about it, particularly having gone through the pandemic and of course, as we were going through the pandemic, we were also going through the process of the partnership with CI. A lot of really important and urgent things happening altogether. I think it really heightened my awareness of the fact that I need to carve out time for myself.

In order for me to be the best that I can for BDF, I have to do things for me. I have to exercise regularly. Deep breathing, meditation. It’s like I need time to let the stress go away. I have gotten better I would say probably over the last six, seven, maybe eight months at making sure I schedule those things. I often joke if it’s on my calendar, it will happen. If it’s not, no guarantees. I literally schedule that kind of stuff in and make sure that I make a commitment to myself and sometimes a commitment to other people because I started playing tennis again, which I’m doing with other people.

I have to commit to be there, and it really has made a difference. Those are some things that helped me at least.

[00:24:42] Matt: I’m going to drop the mic for both of you. I think we’re done. I think this is the end of this. The answers you both just gave to that question were fantastic. We’re going to talk about COVID here in a minute. Everyone’s struggling with what the new world’s going to look like and everyone’s been struggling for so many months on work from home and home and work getting intertwined and everything. The answers you just gave to that, we’re done. [laughs] Did you guys get taught the answer to that question? Thank you both. That was really amazing. That really, really was.

We are going to continue. I’m kidding but that was really great. You talked about it, the impossible to-do lists and you also both talked about the growth of your organizations. Both of your firms are larger than the average RIA and both are growing faster than the average RIA, so you both have your hands full, just balancing all of that. Susan, I’ll go to you first on this one. How do you balance that classic chicken and egg scenario? Do you build the infrastructure ahead of the growth or do you wait until the growth kicks in before you invest heavily in technology tools and systems and processes and hire a bunch of people, et cetera, how do you handle that?

[00:25:48] Susan: The philosophy at BDF has really always been to create the infrastructure first. I say that and at the same time that the caveat is we haven’t gotten it right. One of the things that I think we luckily got very right from a technology standpoint about a year before the pandemic hit, is we gave everybody laptops. I mean everyone, our administrative staff, our receptionist, our president, everybody. When that pandemic hit, yes, we had to do some things to help people get more of a workplace set up at home, but really they took their laptops home and we hit the ground running.

I think about that and I think about the cost that was associated with it, which was not insignificant, but what it helped us do and how it helped us perform for our clients during arguably one of the most stressful periods over the last 20 years. We do aim and we do plan to create that support, that infrastructure for the growth that we’re projecting. One of the other things that we do usually about twice a year, is we look at our hiring projections. We look at our growth expectations and we look at the team and the resource that we have to manage that.

We like to try to get out ahead of that and again, it doesn’t always happen. Sometimes we get in a little bit of a crunch, but one of the reasons BDF hired me in the first place was the recognition that if we’re going to grow, we need somebody focused on the business. Not on our clients, because we’ve got a group of people that are doing that really well, but somebody focused on the business. Our executive team is charged with, of course, not only everybody running their area, but having that 30,000-foot view of, “What is the business need?”

When I think about our hiring goals and our growth, one of the important things is obviously you have to understand what resources you’re going to need to support the growth, but it’s also what does that hiring look like and so we have a pretty comprehensive hiring process. We want to make sure that if we’re going to hire somebody, they’re a good fit for BDF, that we’re a good fit for them and that they want to be here for the long term. Our hiring process is relatively comprehensive and we’ve gotten a lot of great feedback from people that they love it because they get to talk to a lot of people and really understand what we’re all about.

Once you get that person in their seat, if you will, then it becomes about training them, coaching them, and giving them education so that they can grow in their career. Several years ago we created something called BDF University. It’s a tool that we heavily use in the onboarding process. If you look at the first, probably eight to 10 weeks of somebody’s career at BDF, heavily focused on BDF University, giving them everything from the big picture 30,000-foot view to down to how do you use your software in your computer.

We also have BDFU sessions that we have as master’s sessions, if you will, as people are going on and progressing in their career and they want to learn more about specific subjects. We also twice a month, have our wealth management committee, which is all of our client-facing people come together, and really that’s about sharing of ideas. It’s about education. We’ve got our investment committee and our financial planning committee and they present all sorts of things twice a month. They’re learning what’s going on.

We’re all getting aligned as a firm and we’re hearing what’s going on with our clients. What are they saying? How do we need to think about serving them in a way based on what’s happening in the marketplace? Also our director of financial planning has created sessions that fulfill certain CE credits. So that’s been very helpful. We can create a session. We present it at our wealth management committee once or twice a month and they’re getting CE credits for it. It’s a constantly changing marketplace so it requires us to constantly adapt, learn new software, educate ourselves about what’s going on.

More recently we’re looking at putting together probably between six and eight sessions this summer, and there’ll be BDF University sessions. It’s more about our team, personal financial planning. Many of our client-facing people know a lot of that, but there are some areas that they’re asking for more education and information. Then our non-client facing team, this is what we do day in and day out, so our bread and butter. We’re going to take all that knowledge and we’re going to help them in the areas that they want help with, whether that’s saving for college or budgeting or estate planning and that kind of thing.

We’re going to have these sessions happening this summer. Very excited about that. We’ve got a lot of interests within the team on that, and we’ll see how that goes.

[00:30:10] Matt: It’s great. Gina, you talked about it a little bit earlier, in addition to impressive organic growth, Colony is also managing inorganic growth across a bunch of offices. Talk to us about the infrastructure that you have in place and how you time the re-investment going back into your back-office tools and putting back into the business to support that growth.

[00:30:30] Gina: Sure, absolutely. Over the last couple of years, just in terms of basic infrastructure for client service, we’ve really transitioned our hub to the CRM. We transitioned to Salentica powered by Salesforce. As I said that hub, if you think of a hub and spokes of client service infrastructure. Tamarac, we continue to use for portfolio management and eMoney for financial planning. They still comprise obviously very critical components of that technology core, but we believe that utilizing Salesforce as a chassis source, that’s going to frame and support the other technologies is going to offer us longer-term leverage.

As much as I would love to snap my fingers and integrate all of our growth and the offices into the power and the structure of that hub and spoke approach with Salentica, that is just not realistic. We work with our teams to outline a plan that makes sense, both for Colony as a whole, and for the merger team, generally who’ll be transitioned to tools that could change the way they work really. We typically have anywhere from a 6- I like to say 6 to 12-month plan for these transitions, but to be honest, Matt, it’s often longer depending on the complexities of how the infrastructure pre-merger and the infrastructure post-merger will change.

Our investment obviously follows lockstep in with those transition plans. Generally stepping back from just the question of merger integration, I would say the timing of our infrastructure enhancement or reinvestment, as I think you called it, typically I think about it with two main considerations. There’s the business risk assessment on the one hand and then the very practical assessment of the ability of our people to absorb the change on the other hand. As we all know and talk about all the time there’s a whole information tech infrastructure that generally is behind the scenes and focused on cybersecurity, which more and more is becoming that thing that keeps people up at night.

For something like that, of course, we’re trying to stay ahead of the curve on those systems before the growth to support that growth because the level of business risk in not investing in cyber and IT infrastructure is really high and often great. We can implement those enhancements with fairly low impact to all the employees as well. That’s a win-win from my perspective. Back office and client service technology on the other hand, sometimes lower risk in terms of the going concern of the business. I will look at it and say like, “Oh, we need to do more. We need to do better. We need to enhance.”

I’m sure that Susan does that too, as you said we see across the entire company, and I for one always have that next enhancement in mind, but the reality is that the firm is steady and healthy in its current state we’re just adding to that. Again, in terms of the going concern of the business, there’s not as much risk there that you’re talking about when you think about a cybersecurity enhancement. For those, I’m much more apt to think about timing of enhancements and with how much our team has absorbed. I love that Susan talked about their university. We likewise call it Colony University.

It’s not just about the timing of investment. It is about the investment in training,In the materials that you’re putting together. Are you putting tools in front of team members that they’re going to be able to use well? It’s one thing to, again, check it off as an initiative implemented, but if you’re not getting adoption in the parts of the company that you need it, then I’m not really sure that that was a good investment, or maybe the timing of the investment was off. It really depends on both, which we try to stagger it based on how much change management is going to be necessary, how much training is going to be necessary.

Of course, it should also go, stated explicitly, that it depends on whether these enhancements are going to touch our clients. Back office, maybe not so much, but of course now more than ever, the tools and the infrastructure that we’re using to render the services are being touched by the clients as well. Whether it’s financial planning from a client portal, or secure transmission back and forth. We want to be really intentional about that too. I always say, especially with a wide client base, we’ve got different profiles of clients to think about.

Some clients would love a barrage of new technology. Technology all the time. They love it. On the other side of the spectrum, there are clients that would be perfectly happy to just keep meeting with their advisor, cannot wait to get off Zoom. Just low-technology touch clients. Then you’ve got those in the middle. I actually consider myself one of those middle people if I were considering myself as a client consumer where like, I love technology that makes my life easier, but I don’t want more tools just for the sake of more tools.

That’s just more logins, more password management. I want to know how it makes my life easier. Honestly, I think our team members, our employees at Colony, that’s what they want too. Yes, they want to offer first-rate service. Yes, we want an infrastructure that is strong and supporting what we have now, plus the growth that we see coming down the pike, but they want us to be offering them tools that make their life easier. That’s really the goal. Sometimes we throttle back a little bit on the timing because we know that just based on changes that have been going on at the company, it’s just, it’s not the ideal time to roll out an enhancement or a new tool.

Even though we could invest in it and we think like, all right, we’re there, we wait a little bit because we know that the adoption will be better later on.

[00:36:05] Matt: There was a headline this morning that said the Schwab-TD integration is going to (surprise, surprise) it’s going to cost more money than they anticipated and is going to take longer than they anticipated. [laughs] I laughed. I’m not laughing at them at all. I’m not.

[00:36:20] Gina: No, of course, it is.

[00:36:23] Matt: I’m laughing because there are so many– and I’m putting air quotes around buyers. There are so many “buyers” out there that say, “This will be easy.” Again, we said it earlier – “More AUM! I love the idea of going and acquiring! It’ll be super easy and integration will be a piece of cake!” It always takes longer and costs more than you think it is.

[00:36:42] Gina: Yes, that’s right. It’s one thing if you were just putting together technologies, but like I said, whether it’s the clients or our team members, especially not at all. It’s actually about putting together people and it’s putting together the workflows and changing the way people do business on a day-to-day basis. Some people absorb that and can roll with that really well. For other people, it’s more of a challenge. I think recognizing that and being able to really recognize that it’s not just infrastructure. Give me a server or an IT infrastructure combination any day, easy.

Tell people they’re going to be kicked off for a little bit and that when you’re really talking about the technology that makes our business run, that’s when you get to people. Yes, it’s going to take longer and there’s going to be challenges and that’s okay.

[00:37:31] Matt: Talking about just, you guys have captured so much in that last answer, managing people and infrastructure and everything else, businesses of all types are facing a monumental decision right now that impacts how we’re all going to do business moving forward. Obviously, the repercussions of COVID and the stay-at-home orders of 2020 are going to have long-lasting effects on all of us. As we all know, the RIA space has held up better than many industries. We’ve really proven that our businesses can sustain and even flourish with employees working remotely.

I won’t hold you guys to your answers because it’s obviously still in flux. We’re recording this in late April of 2021, and the situation is still somewhat fluid across the country and it’s different in every single state. I won’t hold you to your answers that you’re giving today, but I’d love to hear your thoughts, what the working environment will be for both of your organizations moving forward. Gina, I’ll let you go first on that one.

[00:38:22] Gina: As you said, Matt, it’s definitely fluid, but we wanted to give our employees a lot of lead time on announcing changes to the long-term work environment. We’ve actually already announced to everyone that when offices reopened in some sort of normal state, not all, but most roles will have the flexibility to work up to two days per week remotely. As you can imagine, there just are some roles that don’t work remotely at all, but for those that do, we’re going to start out with the flexibility at that two-day-per-week mark.

We are currently right now in the midst of crafting the details of that policy, which is likely to have a good amount of nuance in it. Even as we draft it, we keep coming up with, “Well, what about this? What about this? What about this?” We’re trying to strike a balance between the benefits that some employees do experience from remote work and the benefits to Colony of this social capital formed and strengthened when teams work together in person. Though, in addition to the book, all of our team members also watch a fabulous Ted Talk by Margaret Heffernan.

It’s entitled Why it’s time to forget the pecking order at work, which I highly recommend to anyone listening. It’s short and it’s fabulous. In it, she talks about how social capital gives companies momentum and is the actual interdependency that builds trust. Then she goes on to say how it really does take time together to develop that trust that you need for real candor. That that’s what ends up building the value of a company over time. It’s actually not your widget, but internally is that trust and candor and then momentum that actually fuels growth. The Colony Group agrees with her, we just really agree with her wholeheartedly and we believe it’s critical over the long-term for the social capital at The Colony Group to be really strong and really deep, which does take significant levels of togetherness. That’s our balance for now. We want to be together again, but we also want people to have some benefit of the remote work, so we’re going with the two days per week opportunity for people in those roles.

[00:40:25] Matt: I like it. Susan, what are your plans as of today? [laughs]

[00:40:31] Susan: As of today, it’s definitely a fluid situation. As we look back the past 13, 14 months, we had a record year in 2020. We’re on pace to have a record year in 2021. If the question is, can we work remotely, the answer is, of course, yes. We’ve proven that. We can work remotely. In our eyes, that’s not really the question. The question is, “what does flexibility look like for our team? It is role-dependent, certainly. What does the flexibility look like at BDF so that we can maintain our culture?”

Our culture includes collaboration, and teamwork, and coaching, and mentoring. It’s not that that can’t happen remotely because certainly, that was happening over the past 14 months. We were doing all of those things and it’s just different. Tina made a great point, you’ve got to be together. Gosh, what have we had, I think 9, 10 people over the year-plus that we’ve been gone. Those people have never stepped foot in our office, and they typically spend time with the people in their group or their department.

We want our whole team to know each other. We want our whole team to work together. How do we design something, design whether it’s a policy, or whatever we call it that enables that collaboration? You’ve got to be able to build trust. A lot of that comes through personal vulnerability. You’re working with people side by side, you’re seeing the wins that they make, and you’re seeing the mistakes that they make, and you’re both learning from that. How do you enable that to happen? Give people flexibility.

They love the fact that they now take their kids to school in the morning and get to have lunch with them. We don’t want to take that away. The way that we’re looking at this and we haven’t made any final decision, but it is how do we maintain that culture, but it’s also an opportunity for us to reimagine what our business looks like going forward. From a flexibility standpoint, we were probably a little bit ahead of many firms, pre-pandemic. We had already given people the opportunity to work at least a day a week remotely. We think that that will be more going forward.

We also want to make sure that we’ve got what we’re calling collaboration days. I talked earlier about our wealth management committee meetings, we’ve got a full firm team meeting that we do once a month. There’s certain meetings, events, opportunities for us to bring everybody together. We wanted to do the most that we can with those, have as much interaction, have as much learning, and really have fun. Part of our culture is not only to get to know each other, and help each other, and that kind of thing, but it’s to have fun together. We have a ton of fun together.

We’ve done a lot of those things remotely over the year to help sustain that, but really, it can’t take the place with one-on-one interaction. We don’t know yet where it’s going to land. We know it’s going to be a little bit more flexibility than we had before with the idea that we need to be very intentional about creating time and space to create those collaboration moments.

[00:43:31] Matt: You probably think I say this at the end of every episode, [laughs] but this has really been one of my favorite conversations. Both have been so fantastic in sharing your thoughts. This is such a unique time in our industry. I really can’t thank you both enough. Susan and Gina, thank you so much.

[00:43:47] Gina: You’re welcome. Thanks for having us.

[00:43:48] Susan: Yes, thank you very much.

[00:43:49] Matt: Well, that is a wrap on Episode 29. We will talk to everybody soon for Episode 30.