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EP 40 – Transcript

[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, everyone, to Episode 40. We have two extremely thoughtful and strategic guests with us today. You’re going to learn a lot from both their perspective and how they’ve structured their organizations to best serve both clients and employees. Let’s get right to it. Joining us from JMG Financial Group, just outside of Chicago, is Yonhee Gordon. She’s Principal, Chief Operating Officer, and Chief Marketing Officer.

Yonhee’s been with the firm almost since its inception 30 years ago. As you can imagine, she’s held numerous roles and has overseen the firm’s immense growth to 80 plus employees and almost 4 billion in assets under management. I was introduced to Yonhee by our mutual friend Stacey McKinnon, who most of our listeners know from Morton Wealth. Welcome to the podcast Yonhee.

[00:01:10] Yonhee Gordon: Thank you, Matt. Thank you so much for the opportunity and I’m looking forward to the conversation.

[00:01:15] Matt Sonnen: Great. Joining us from Gibson Capital in Wexford, Pennsylvania, which is outside of Pittsburgh, is Christine DeMao. She’s Chief Operating Officer and Managing Partner. Like Yonhee, Christine has held numerous roles at the firm spanning 13 years across two different stints with the company. In addition to advisory firms, she has worked at custodians, fund families, and broker-dealers, so she has an abundance of knowledge about our industry, and I’m very excited to talk with her today. Welcome, Christine, to the COO Roundtable.

[00:01:47] Christine DeMao: Thanks so much, Matt. I’m really excited to be here.

[00:01:51] Matt Sonnen: Great. Well, Yonhee, I’m going to start with you. Why don’t you tell us a little bit about JMG Financial Group?

[00:01:56] Yonhee Gordon: Yes, absolutely. Actually, we just celebrated 38 years of being incorporated this past Sunday in March. We’re excited to look back on 38 years of being in this business, although the business has evolved over time since I’ve joined. We’re reaching just about $4.7 billion. Hopefully, getting to that $5 billion mark sometime in the near future. We’ve just hired our 86th employee this year.

Actually, the count, I was just looking at it, we’re up to 35 new hires to our team since the beginning of 2020, which during a pandemic who would’ve even thought that? I can’t even believe it myself. Experiencing a tremendous amount of growth and also finding talent. We work with high-net-worth individuals. I’d say our specialty is we’re working with corporate C-suite executives and that’s because we do extensive tax planning. We’re actually in tax season at the moment. We prepare many tax returns. We are founded by accountants, so it has just come with the territory in the way that we do comprehensive planning.

We have a lot of business owners. I’d say our ideal client are the delegators who just appreciate that we can manage all aspects of their financial lives. I’d say that we have truly grown organically, which really comes from high client retention and high employee retention. As we have received referrals from existing clients over time, we’ve been able to promote from within the organization, since we have invested in our people and established career paths.

We have positions today that we didn’t have certainly five years ago or even a year ago because of our growth and our retention. Really in terms of looking at our vision for future growth, I think it’s just really to keep improving in and evolving as a business. The challenge, of course, is to maintain our brand while making sure we run efficiently. I think that that’s just been the true secret to our growth and the way that we’ve grown organically over time is building upon that foundation. That really is with our people.

[00:04:24] Matt Sonnen: Great. I love the delegators. I learned that from Michael Kitsis the delegators versus the do-it-yourselfers. Can totally assimilate with that one, for sure. Christine, give us an overview of Gibson Capital.

[00:04:38] Christine DeMao: We were founded in 1989. We are celebrating our 33rd year. We manage about $2.3 billion in assets for around 197 households across 37 states. We are only 15 employees. We’re currently looking to add two more to our team. Yonhee, I’m just in complete awe of your hiring trajectory. I’m going to have to get all sorts of tips from you. Our ideal client, we serve high-net-worth individuals and institutions all over the US. We’re not a regional firm here in Pittsburgh. We’re a national firm with a fairly large footprint.

I would say that our ideal client would probably be a business owner or retiring professional who has $3 million or more to invest. Our specialty is really people with really complex and unique financial planning issues, somebody who’s interested in a collaborative portfolio design process. We don’t in-house offer tax or legal services. We’re really agnostic on that front, which means that we can really work with anybody’s team of professionals.

Our founder, Roger Gibson wrote the seminal book, Asset Allocation: Balancing Financial Risk in 1990. Then he spoke about it internationally for about three decades. We really grew organically as a result of his writing and speaking and his commitment to giving back to the profession. Our growth plan for the future is really to continue to do more of the same. We just want to continue to do exceptional work for exceptional clients and believe that if we’re focusing on the right things, the business will follow.

We’re really fortunate to have developed some really positive relationships with tax and estate professionals who refer clients to us. We want to continue to invest in those centers of influence. Our hope for the future is that we can continue to create meaningful career opportunities and secure financial futures for our team. We’re a little unusual in that we don’t have sales quotas or mandates about growth ratios and our team is paid purely on salary.

We really take seriously this commitment to not sacrificing the clients we have today for the ones we could have. Hopefully, if we’re paying attention to the right things, we will continue to be as successful in the future as we have been in the past.

[00:07:21] Matt Sonnen: Great. Well, I talked about your vast experience across the wealth management spectrum, Christine. Tell us about your career path that led you to where you are today.

[00:07:30] Christine DeMao: Sure. It’s funny. When I look back on my career path, I’m really conflicted. On the one hand, none of this was supposed to happen. This is a huge accident. On the other hand, it all makes perfect sense. When I was a little kid, I loved to make my baby sister and my neighborhood friends play business with me. I would painstakingly create forms and applications with a ruler and a roll of laser printer paper, the ones with the holes on the side. If I stumbled upon a piece of carbon paper or an adding machine with a tape, those are the holy grails.

The signs were all there. Anytime I recount this story to my colleagues, I point out that I’m literally living my childhood dream.

[00:08:31] Matt Sonnen: That’s amazing.

[00:08:32] Christine DeMao: Yes. Not the most typical kid. The road here was fairly bumpy and I’ve had a lot of detours and pit stops. You talked a bit in my intro about the sorts of places that I’ve been. I really did break all of the rules about staying put and not being transient. In fact, when I filled out my application for my Series 7 license, at that time, you had to list every place that you had lived in the prior 10 years. I was mortified to discover when I did that first application that I had moved 17 times in the 10 years.

I started my career in finance as a part-time bank teller. In the corner of the branch that I worked in was a gentleman who sold mutual funds. He wasn’t there every day during the week, but he was there a couple of days a week and I would help him fill out the paperwork. I loved it and I had some aptitude for it. He said, “Hey, you should check out the Capital Group.” I did. I actually went and moved to Hampton Roads and worked in the transfer agency arm of American Funds in their shareholder services group.

They had this amazing nine-week training program where they taught you everything you’d need to know about their funds. At the end of every week was a test and it was no joke. You would pass or fail and if you failed, your training was done. By the time we got to the graduation ceremony about half of our class had been whittled out. The organization itself was so demanding and structured, it was really quite impressive. I still use some of the things that I learned in that training today.

I was young and I knew that I wanted to experience living in different cities in different places. I gave myself this commitment that I would spend at least one year in each role and then I’d reevaluate. My resume was dotted with quite a few 13-month stints. By the time I showed up at Gibson Capital, I had worked for the largest producer, one of the most successful regional brokerage houses here in Pittsburgh. I had been an institutional relationship administrator serving the RIA group at Federated Funds.

I had moved to San Francisco to help Fidelity launch what was one of their first regional institutional wealth services offices. That pit stop in particular was a really influential one for me. I was working as a senior client service manager solving problems for about 16 of the biggest and best RIA firms west of the Mississippi, so I had this really big, broad view under the hood to see the way that these firms were structured, what their cultures looked like, how they treated their clients and employees.

By the time I decided I was ready to come back home to Pittsburgh, and by the time I landed back at Gibson Capital, I had moved around enough that I had a really clear picture in my mind of the kind of place that I wanted to be at. I was ready to settle down. Homeownership in Northern California was out of the picture for me. I got lucky. I interviewed at Gibson Capital for a portfolio administrator position, and I had this picture in my mind of a really quiet, small, simple life. I thought Gibson Capital, Custody to Fidelity. I had worked at Fidelity. How hard could this be?

It’s going to be a total cakewalk and I got all that wrong too. [chuckles] I grossly underestimated the challenges of working in a firm where the standards of perfectionism and exactitude and continual improvement are part of the fiber. I did not get a simple life with a neat and tidy work life but what I did get instead was something altogether different.

It was a real opportunity to be a part of this incredible legacy of thought leadership in the profession of doing the right things for clients, a place where a really positive and progressive culture flourished, and where I could use all the best parts of my skillset in really creative ways to help build a firm where my work life and life are fully integrated.

My path was really about gap filling. I think that’s a theme that is probably often heard in the life of a COO. You really find ways to make yourself indispensable and to do the things that need done that maybe nobody else is interested in doing or tenacious enough to do. I spent a lot of years really working like an owner before I was one. Ultimately, I think, I just got really lucky.

[00:13:48] Matt Sonnen: Great. That’s a great story. It’s funny because I always joke. Nobody grows up dreaming to be a COO of an RIA, but you almost did. It’s a great story.

[00:14:00] Christine DeMao: Thank you.

[00:14:01] Matt Sonnen: Well, Yonhee, I don’t know if we’ve ever had a chief marketing officer on the podcast in addition to your COO duty. Talk to us about all the different roles you’ve held as GMG has grown over the years and what your role is today.

[00:14:13] Yonhee Gordon: Yes. I have to smile as I’m listening to Christine’s story because I also used to pretend working business. Also being a teacher, my younger sister was my student. Maybe that’s a common thread, but in addition, I’m laughing too, Christine, because I’m wondering how many people in the audience know what carbon paper is because I do.

[00:14:38] Christine DeMao: I sort of dated myself, didn’t I?

[00:14:41] Yonhee Gordon: I know. They can all Google it and look it up. [chuckles] I was also very fortunate. The firm started in ’84. I joined in ’86. When I joined, there was 13 employees at the firm. I’ve been very lucky to have so many careers at the firm as the firm has evolved. I mean, back in the early ’80s, there really was no financial planning industry. It was really insurance sales and high-commission brokerage firms.

My dad is a CPA, he’s also a professor. My mom was a pharmacist. I’m also a Korean immigrant, immigrated to this country when I was very young. Growing up in my culture, it was either, “Yonhee, be a doctor or a lawyer,” and in my case marry one. I didn’t do any of those things, but that’s all I knew. I actually did not like accounting. My dad, he actually said, “This is your major,” and I didn’t like it, and I switched majors to communications, and I minored in English with an emphasis on organizational behavior.

It’s so funny because today I use more of that in my role. It was just setting, I guess, the foundation for my future. When I graduated from college, I really had no idea what I wanted to do. I went to a college fair being very naive and I got sucked into a job called financial planning and I thought, “Oh, that sounds really interesting.” What I didn’t realize at the time it was insurance sales. I showed up and we were in a classroom learning how to get our licenses and passing out of the exams.

Then the question of make your list of friends and family and we will go sell them universal and whole life policies. It was awful. I did it for a month and I realized this is not what I want to do. I was actually considering to go back and get my MBA. Just by chance, I ran into my old high school Sunday school teacher, he had just started at JMG and had his JD and his CPA. He came from a big accounting firm and we were talking and he said, “How about you consider working at our firm?” I said, “I don’t know.”

I was just so gun shy at the time. He said, “Well, let’s do this. I’ll give you some projects and you can go to my house and I’ll leave you a tape recorder, Wall Street Journal–” which I had never read before. I should say he was also Korean and knowing him through church and knowing his wife and his wife is expecting their first child also, he didn’t pay me and he said, “Why don’t you do this for a couple of weeks and see what you think?”

He left me with this little computer and I had to figure out Lotus 1-2-3 at the time. For those listeners out there, that was pre-Excel. Reading the Wall Street Journal, looking up stock prices, and reading a book on investments terminology. I did that for a while and I said, “Okay. This sounds okay. I’ll give it a try.” What I didn’t realize until later is that he was just really trying to prepare me and trying to give me a little confidence because I was new, I was very young to the staff of just 13 people in the minority.

That’s what he did and I learned a lot from that. To this day, that’s why I spend a lot of time preparing candidates and letting them know, being very transparent about what this job is like so that when somebody joins us, there’s no surprise in terms of what they will be doing. That was the beginning for me. I learned whatever I could, even learning how to prepare a tax return. I didn’t even know what a 1040 was.

I just took the approach of I will learn what I can and I will be a sponge and learn from everybody. To Christine’s point, you learn everything. Then as opportunities arise, I was given that chance. I have a knack for training, so then I started to train other people. I organized staff meetings at the very beginning. Then I started to be given the challenge of hiring people. I’ve been able to do that and so that has evolved over time. I was the first staff person to be promoted to a client-facing advisor role.

I think that’s when leadership realized, “Hey, we can train our people internally and develop them in-house.” Then as clients get referred to us, we can promote from within and that’s really how we have grown over time. I was able to work on the career pathing. Then what happened was I had two kids. They were very young at the time and there was an opportunity in management and they asked me if I’d be interested. I really did more so for personal reasons at that time.

That was over 20 years ago. There was no internet, no fancy cell phones that we could work remotely. I had to be in the office. I knew also that I didn’t want to give up working because I knew the kids would be growing up and leaving the house and I would want to maintain my career. Now they’re 29 and 25 today. They know exactly what I’m doing and I’ve always included them in my career as well. I think that’s another lesson learned for all of you working moms out there to include the kids in what you do so that they can be part of your career.

I think in hindsight, that was the best decision for me personally because I’m in a very unique position because I know what it’s like to be a client-facing advisor. In fact, I still know my clients today over 35 years. I also know what it’s like to be in a support position, learning from the ground up and progressing at the firm and so I know what it takes to progress. I know what advisors need. I think that I’m very fortunate to be in that position. The marketing officer position is somewhat new for our firm.

That’s just because we have grown just to make sure that we continue to grow. Obviously, I know Christine has this challenge too, is finding talent out there, but it’s more, I think for me, it’s about educating our young people. It’s talking to that next generation because there are so many different business models out there and there are so many different career options today. Areas that weren’t even in existence, compliance, my goodness, operations, what we’re talking about today.

Just client-facing, business development, marketing initiatives, so many things out there, even the technology. I think there’s so many more opportunities and options, but a lot of times, students don’t know that coming out of school. It’s an important decision for them. I’m glad to be able to share those lessons learned, if you will, to that next generation.

[00:22:41] Matt Sonnen: Amazing stories, both of you. That’s fantastic. As everyone knows, my goal with this podcast is to highlight the importance of professional management in the RIA industry. I use this platform to showcase the amazingly talented individuals who are running these firms. You both have reached the pinnacle. You’re both owners of your organizations, which unfortunately is a bit rare in our industry. Yonhee, you did say you have some client relationships, but most RIAs reserve ownership strictly for advisors and don’t even allow that opportunity for operations folks.

I’ll go to Yonhee first. Can you tell us how you’ve achieved that and what advice you can share on how we can promote more RIA ownership for non-revenue-producing roles?

[00:23:23] Yonhee Gordon: Oh, absolutely. I will absolutely love to talk about that. I’ll also say, currently we have 17 owners who are all employees of the firm. Four of us are non-revenue-producing employees and owners. I think that’s wonderful that our firm recognizes that. I think if you look at leadership, there’s usually a visionary and then somebody who has to execute, and that falls under the operations. It is the same person in the very beginning, but then that person’s going to have to make a decision as the organization grows.

They come to a crossroads, “Am I going to going to work on clients on the business development side or am I going to work on the business on the operations side?” I think that’s a big decision early on with an organization. A wise person once told me that a business is like a three-legged stool. You have purpose, you need people, and you need to have structure. As one changes, the others have to too, to keep that stool even. I always challenge employees in terms of how do you add value to the firm?

I think leadership needs to recognize that everybody adds value. Everybody has different personalities. We all communicate differently, but there has to be a respect for one another and that complements one another and that’s so critical in an organization. Yes, you need to have business developers, you need to have client-facing individuals, but you also need a very strong infrastructure to provide that service. It’s a dependent relationship.

If you don’t have good support, and that is under operations, you’re not going to have support to service those clients. Then the clients are going to leave. They’re not going to be happy with their service. It is a balance and I always tell the employees, “You want to have an impact on the culture.” When leadership looks at that, they have to look at the impact of the culture, impact on the business, productivity. Then they should be given opportunities for ownership.

It just makes all the sense in the world and because again, if you look at that model of the three components to a business, purpose, people, and structure, and they all are dependent on one another. That’s why I think it’s so important for leadership to recognize that and offer those ownership opportunities to the people in the operations and the non-revenue-facing positions

[00:26:08] Matt Sonnen: Here here. Christine, you have an interesting take on the benefits of ownership for practice management folks. Can you share that with us?

[00:26:18] Christine DeMao: Yes, sure. I share a lot of Yonhee’s perspective on this. I think it is bigger than skillset differences. It’s bigger than personality differences. It’s really about focus. You want people represented who have dedicated focus to the things that will keep the firm afloat. I have to start by confessing that I am the beneficiary of working at a firm where I’ve not had to convince the leadership of the value of the contributions of the practice management team.

That bias was already in place when I got to Gibson Capital, but I can talk about how I think we’ve maintained that perspective. I think that at the most basic level, it’s really about making visible the work on the non-producing side. People can’t value what they can’t see. It really starts with an openness and transparency about what is the work of the firm. We exist to take care of our clients. That is absolutely true, but the work of the firm is so much bigger than that.

I think the last two years have been the perfect representation of why non-revenue-producing partners matter. Literally overnight, we had to transform our business structure. That focus on practice management, that dedicated focus that is outside of client focus is really what made that possible for us having to rework every workflow, having to reconsider the ways that our employees are working, the technology that they’re using, what happens to paper, what implications are there from a risk perspective?

All of these things are perfectly suited to the practice management team. In our firm, we have intentionally structured our managing partners as a team of three. Our chief compliance officer, our chief investment officer, and myself as COO, and we look at every issue that affects the firm as a triumvirate. We are there to challenge, advocate, support, and hold each other accountable. Our leadership group, the composition, likewise, mirrors those functional roles.

We’re really working to make sure everybody can see what is the work of the firm so that we do value it when it’s time to make new partnership decisions and approaching those conversations and those problems from a place of deep respect and appreciation for what strengths and skills the other people bring to the table is key. I think probably all of us have been in places where there can at times be an adversarial relationship between those segments of the firms.

I think it’s really important from the top down to have a different tone about those roles being in partnership with each other. I think that the last two years have been the perfect example of why it’s so critical for the partnership group to be more broad than simply the client-facing roles.

[00:30:03] Matt Sonnen: Given that you’re both in charge of the day-to-day execution and running of the businesses, can you share with us what metrics you’re tracking to gauge the health of your organizations? I’ll go to Yonhee first on this one.

[00:30:17] Yonhee Gordon: That’s always challenging. I think for us, we keep track of our time. Maybe that’s because our firm was founded by accountants and we’re used to keeping timesheets and things, but we still do that today. We have our own internal timekeeping system and it’s really a good way from a management tool, also, to see where people are spending their time from a training perspective, to see if we need to help people in time management.

If you think about it, that’s what we sell because we don’t sell any product. We’re fee-only. Any given time, a client can also ask, “Hey, how much time did your staff work on my stuff?” From an advisor standpoint in managing a set of clients, looking at realization, productivity, and that’s all about running a business. I think timekeeping for us has been critical and has been a great tool for us to use internally for so many reasons.

In addition, we have other things that we do. We have a team new business bonus, and so everybody knows about new revenue brought into the firm. We also are able to keep track of sources of that new business and also who’s working on that new business, and which team works on different aspects of the onboarding process for a client.

I think that the time management for us has been really key and that’s just keeping track of our time, too. That’s helped us to realize how much time are we spending on certain administration or even onboarding of clients. Is there a way that we can make that more efficient? That’s then translated into streamlining processes and things like that. I would say that’s how we would gauge our time.

[00:32:29] Matt Sonnen: It’s not easy to do, but we talk to our clients all the time about, “If you can do it and track your time, it adds so much visibility to where the profitability is in the organization, where the efficiencies need to be improved, et cetera.” We track all of our time here and turn it in to Sandra every Friday. We turn in our time for how much we spend on each client, so I love that you’re doing that.

[00:32:55] Yonhee Gordon: Timing is every pay period. It works out really well, and it’s one of those early habits that everybody knows from the get-go that’s what we do and we have our timekeeping system. We even have codes for different things that we do for clients. It’s so helpful.

[00:33:18] Matt Sonnen: That’s great. Christine, what key performance indicators do you keep an eye on?

[00:33:23] Christine DeMao: Gosh, there’s so much data everywhere. I find that really maintaining a curiosity about the data is key for us. Whether it’s budgeting and P&L and really trying to be balanced in discipline and generosity, or client-to-advisor ratios, the number of assigned relationships for each portfolio administrator.

Just on the portfolio administrators alone, we are continually looking at trying to – It can’t be perfectly scientific – but trying to balance the complexity of relationships across each portfolio administrator. Do people have the same number of complex clients and simple clients or clients with similar allocations? We don’t want one person to be stuck with all of the private equity reporting or all of the manual reporting.

Looking at things like the custodial data, we get a monthly scorecard from each custodian and we look at things like NIGO rates. We look at things like, ‘where are we choosing not to adopt technology that might make our lives or our clients’ lives easier?’ We are part of the immigrant family, so we look at data and benchmarking from them. We’re looking at things like net new revenue, loss revenue.

On the HR front. I mean, again, there’s so much to look at. We’re evaluating things like how much time of our meeting time is your business versus relationship development. Things like who’s consistently working more. To Yonhee’s point, is there someone floundering who needs more support?

We’re using tools like this new one that we implemented through the pandemic that’s called Culturora, and it’s a way to measure connections across the firm while people are working remotely or in a hybrid environment. We’re trying to identify is somebody off on an island? Are they showing signs of disengagement? There’s data everywhere to pay attention to.

Even just last night, I was running a report in ShareFile to try to capture good information about how many clients have been downloading our reports versus downloading our billing invoices. Inevitably, I saw a handful, maybe 20 clients, who had repeatedly downloaded the same thing two, or three, or four times. I thought, “Oh, man, there’s something there. I need to go back and figure out. There’s something in the data that’s telling a bigger story about where people are struggling.”

It’s just a matter of going back and having time to really unpack and unwind what the story is in the data. There’s certainly so much to pay attention to in the interest of doing better work for our clients and our staff.

[00:36:48] Matt Sonnen: Our listeners have heard me say this many, many times. I believe 75% of the COO’s job is tied up in HR. Christine, can you talk to us about how you affect the culture at Gibson Capital?

[00:37:02] Christine DeMao: Sure. My predecessor, Brenda Gibson, describes my role as being in charge of all things hearth and home, and really how I think about my work and how I should be impacting the culture. It’s really my job to create for our team and our clients the kind of professional home where people want to be, where people want to come to work. I really use every tool in the toolbox, lots of rights and rituals, celebrations, and my favorite may be storytelling, helping to make meaning out of our work.

I’m responsible for finding ways to make generosity tangible, finding ways to express gratitude, teamwork, and a commitment to delivering exceptional work. I really can’t take credit for the culture that exists at Gibson Capital. I’m simply the most recent steward of it. I am responsible for being relentlessly intentional about carrying it forward into the future. I have to find creative ways to make our values and our principles tangible for our people. You really ultimately do that by making sure that everything that you do every day walks the walk and is in service to those values and principles.

[00:38:24] Matt Sonnen: Yonhee, what do you do in your role as COO to shape the culture at JMG?

[00:38:31] Yonhee Gordon: In my career, I’ve been very fortunate and privileged to have hired close to 80% of our existing employees, and so again, speaking to our high retention. If you think about it, culture is really the fabric of an organization and it takes time to build every thread, thread by thread. I view the COO as really the glue that holds an organization together. If you think about the approach, it’s really looking at the employees as your clients. That’s how I have shifted from being client-serving to clients, to also now the employees are my clients.

I think being very transparent is important. Spending time upfront. To your point, Matt, about the COO being tied in HR, that is the first impression that candidates get of our organization. I’d rather spend the time upfront. I talk to every new candidate as an introductory call because I think it’s very important that they understand our culture from the very beginning. Sometimes it’s a fit and sometimes it isn’t. I respect that. Actually, sometimes when it’s not I’ll help the person decide maybe which direction they should go.

I think that’s just really important and just in general, managing expectations.

The important thing I’d say too is consistency. It has to be consistent across the board and that’s why when you build culture over time, and as I look back on my mentors who have literally seen me grow up, and now they’re retired and now they’re our clients. Now I see the kids I hired 20-some years ago, grow up, get married, have kids, and now becoming my partners. What a special cycle that is. That takes time, but it’s also consistency throughout. Also teaching generations behind you about that culture and really becoming that fabric of the organization to hold it together.

[00:40:51] Matt Sonnen: Great. We’ve talked about the health of the organization. We’ve also talked about the culture of the organization. Now let’s move into client service. Christine, I’ll go to you first on this one. Can you tell us how you’ve structured the firm to ensure a consistent client experience?

[00:41:10] Christine DeMao: Philosophically we are a no-silo firm. What I mean by that is, we really believe that it’s a more rewarding and fulfilling career to have our operations team doing a much broader range of responsibilities than in firms where there may be, say, a new accounts group or a cashiering group. It’s a really big, meaty, challenging role for anybody in our ops team. They are charged with working with every advisor in the firm. There’s no team for this advisor or team for that advisor.

We’ve squarely put our regulatory focus at the center of that web. It has allowed us to really create a system of gatekeeping where our operations team is empowered to say, “Hey, wait a minute. I don’t think this is right,” or to question or challenge or hold lines where we think it’s very important from a risk mitigation perspective.

Also to make consistent one really high service experience for our clients. We talk about the fact that we’re not in the business of making widgets. We’re really trying to create fully empowered teams where they are drawing connections between the types of work that they’re doing, and they’re using that to cross the advisors. They’re able to say, “Hey, Keith, you may not have seen this yet, but Chad and I just did this for this client and you may want to consider this solution as well.” It has allowed us, even as a small 16-person firm, to create really rewarding careers over a long time period for people. That’s what’s worked for us.

[00:43:19] Matt Sonnen: Yonhee, how have you approached the decision to either centralize operations or to work in individual teams from a client service perspective?

[00:43:28] Yonhee Gordon: I think we have a great combination of both. When we have employees join us, they all go through the same training. They learn about each department. They learn about the positions, all of the positions, and they all learn together. They have to learn our systems, obviously, our CRM, all the tools that we use internally. Then for us, we’ve found that because we’re such a highly personal service relationship to our clients, having a consistent support from a client’s perspective is why we do have teams assigned to groups of clients.

However, internally though, we have centralized different operational things. I think that has just come about because of the growth of our firm and the numbers that we have and the number of employees that we have. Years ago, all the staff people, myself included, I did everything. I did the forms, the meeting preparation. Sometimes I’m talking to the client. Sometimes I’m scheduling meetings and so on, which is a great learning.

Obviously, as time goes on and you grow, you can only handle so much. Only recently, a couple of years ago really, is when we decided we need to really centralize some of those operational things that would be more efficient from us in terms of running our business. We do custody with Charles Schwab. We have our internal investment administration department. They’re the liaison with our Schwab team. It doesn’t mean that our client service coordinators don’t know all the forms that need to be completed. They also communicate with our Schwab representatives, too.

This way, our teams have a resource internally. We have found that as we have grown, it’s just become much more efficient in terms of managing a business, yet we still have that personalized service that our clients know who they go to if they have a question and because of our high retention, our support teams know our clients very well. For us, it’s just been a great combination of both.

[00:46:00] Matt Sonnen: We’re recording this interview. It’s late March of 2022. It feels like the country is shifting now from, “Let’s just make it through the pandemic,” to, “This is the new normal, and it’s the way we’re going to be doing business moving forward.” Yonhee, long term, what are your thoughts on in-office versus remote work? What have you determined will work best for your employees and your clients?

[00:46:27] Yonhee Gordon: I’m really proud to say when we had to go shelter in place in the beginning, it was March of 2020, our clients didn’t even know that we had to go shelter in place and that we were all working remotely. I think that’s a testament to the client service that we provide. Then, of course, from a management standpoint, what do we do? We asked our employees, “Hey, what would you guys like to do? What would be ideal for you? Give us some feedback.”

Really, the consensus was a hybrid schedule would work out great. We actually went to an official hybrid schedule last summer but the thing is, it has to be planned. It’s very intentional and everybody knows what the expectations are 12 months out. I think that’s important that you get input from everybody but then also having a plan. We’re in a relationship business and I think the key component is that people recognize that, that it’s important.

You’re missing out on the in-person learning, those impromptu discussions that you might have with one of your peers or colleagues, and also when clients come into the office. It’s been a great shift for us in terms of understanding and realizing that employees can be very productive working remotely but also, they also understand the importance of being in person together. I think that just translates into excellent client service to excellent teamwork.

This hybrid schedule is such that everybody has their scheduled days, and so it flips flops so that it’s balanced. We have it where people are in the office five consecutive business days but there’s a weekend to break that up. Then they take turns in terms of how many days of the week in the office, but it turns out to be five consecutive business days so that it’s a consistent group. It’s intentional in terms of who’s in together so that they can have those in-person meetings while they’re in the office.

The other part of it is it’s not so flexible that if I’m scheduled to be in today but I just don’t feel like it, I can’t do that. I have to be in. That’s the expectation of this hybrid schedule and everybody respects that. Because of that, it’s worked out very well. I cannot see us going back to being full 100% in the office. However, I think it’s the communication that leadership needs to make to the rest of the firm, also getting input. It’s worked out really well for us. It’s been very well received.

[00:49:26] Matt Sonnen: Like you said, it’s got to be very intentional. I think that’s the key there. You guys have definitely thought through the different nuances of it. Christine, how are you structuring the firm to balance in-person versus remote works to ensure everyone is on the same page, you’re all rowing in the same direction, et cetera?

[00:49:44] Christine DeMao: Likewise, it’s been a lot of talking to our people. Over the last two years, we have done more surveying of our people probably than we’ve ever done. We’ve really focused our attention on making sure that whatever we’re choosing to do, it’s allowing us to maintain the same high standards that we did when we were all physically working in the same office together while balancing people’s deeply personal feelings and concerns about their health and their preferences about what they see and know now about how they work best.

There’s no questioning this has been such a transformative time. Certainly, nobody could have predicted this situation but there’s no denying that the pandemic has and will continue to transform our field. We know we’re not going back to the before times. The trick now is for us to really pay attention to what we’re learning about how our work lives have improved and folding in the things that we do think we lose by not being together.

We can see things like our people tend now to start work earlier because they’re not commuting.

Now that everybody is fully equipped at home, they do tend to work more on the weekends or in the evening. It’s not unusual to see people log back on at nine o’clock. Our sick time is lower because I think people just feel more inclined if they’re not feeling well, they might push more because they can do it on the couch.

Then, the flip side for us has been that onboarding is unquestionably more difficult. Teaching and training is harder when you’re not shoulder to shoulder with your new hires and maintaining culture requires much more intentionality. Without the opportunity to observe each other, things like providing performance review feedback is more difficult. It’s really, for us, a matter of striking the right balance between all of these competing objectives and maintaining what is positive.

We have chosen also to move forward in a hybrid way. We’ve added one additional suite to our office space, which is being renovated as we speak. This additional space will give us room to grow and to accommodate the staff that we have now when we are back and fully implementing the hybrid environment. We’re anticipating that the renovation should be done, hopefully, in May, at which point we will call everyone back to the office two full days each week. One of them will be a required day, which is our all-hands day, which is Thursday.

Then the other day they can choose which day they would like to be. Again, as Yonhee describes, you don’t get to decide on Tuesday if Tuesday or not. It’ll be a published schedule so that we do have opportunities for people to overlap and so that we have at least one full day every week where everybody is together. The rest of the week, people can choose where they think they do their work best. Whether it’s from home or in the office, they can choose.

We’re going to see how that goes. We will continue to leverage technology that we’ve put in place to try to keep people connected. I expect that we’ll continue to use Slack. We’ll continue to use Teams. We’ll continue to use things like Culturora and we’re going to see what this new phase teaches us.

[00:53:55] Matt Sonnen: Well, I cannot thank you both enough for sharing your stories and your experience with us today. As I said at the outset of this conversation, you both have approached your roles in a thoughtful manner. You’re both running incredibly successful businesses. We’ve all learned a ton from you both today. Yonhee and Christine, thank you so much for being here.

[00:54:13] Yonhee Gordon: Thanks so much for having us, Matt. It was really a pleasure.

[00:54:16] Christine DeMao: It was so much fun. Thank you so much.

[00:54:19] Matt Sonnen: Great. Well, that is a wrap on Episode 40, everybody. Thank you so much and we’ll talk to you soon