Welcome back to the 270th episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Kyra Hollowell Morris. Kyra is the founder of Morris Financial Concepts, one of the oldest independent fee-only RIAs based in Charleston, South Carolina, that oversees $350 million of assets under management for 250 client households.
What’s unique about Kyra, though, is how she has steadily scaled the growth of her firm by taking the time to find and retain top talent… and along the way, developed a willingness to quickly let go of any new hire who doesn’t meet the standards the firm is trying to achieve.
In this episode, we talk in depth about how Kyra consciously controls her firm’s growth by trying to grow fast enough to create new opportunities for her team but not so quickly that she can’t hire and develop the talent it takes to serve clients well, how Kyra concentrates on building the company’s culture by hiring employees who see financial planning as a calling and have a combination of competency and personality (rather than settling for those who may have one attribute but not the other), and why, though firing ‘B-team’ employees who are getting the job done can be tough, Kyra refuses to settle when there are so many other people who may be a better fit for the firm.
We also talk about how Kyra built her media presence to drive the growth of new clients in the early years, how that growth eventually squeezed her capacity and made her realize she needed to change how she trained and developed her team so that she can focus on meeting with clients (and be able to spend more time with her family), and how Kyra developed a system to communicate the firm’s expectations and standards effectively with her team while also holding them accountable.
And be certain to listen to the end, where Kyra shares how she draws upon her fourth-degree black belt, meditation, and running half marathons to cope with stress; how Kyra believes in sustaining a ‘life balance’ to ensure personal needs are being met before the needs of production; and how Kyra aims to give back and uplift her community by creating a mixed-use development where minority-run local businesses can thrive.
So whether you’re interested in learning about how Kyra systematized her hiring and on-boarding processes to ensure the retention of top talent, how she determines when and how to scale the growth of her firm, or how Kyra creates a ‘life balance’ in entrepreneurship, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Kyra Hollowell Morris.
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Michael: Welcome, Kyra Hollowell Morris, to the “Financial Advisor Success” podcast.
Kyra: Hey, Michael, thank you so much for having me on. This is a real honor and pleasure, and I’m very excited.
Michael: Well, I’m excited as well. I’m really looking forward to the conversation today and talking a bit about a theme of managing growth. I know you’ve been through both some very fast growth stages for the firm and then sort of some consciously much slower phases of growth for the firm, like chosen to grow more slowly. And just I’ve always been personally fascinated by the discussion of kind of managing growth and what it means to manage growth, like to sort of consciously say as a business owner, “Okay, I’m going to do some things because I want to grow this thing faster and then like, “I’m going to do something because I want to grow this thing slower.” Because I find for most advisors, and perhaps, especially when they’re going through fast growth, we don’t have…we talked about managing growth but usually managing growth just means manage the hiring and training of more people to handle the growth.
We don’t literally manage the growth like, “Hey, I think I’m going to grow slower for a while because I got to get some things in place and then I’m going to try to grow faster again.” Just sort of like managing growth means managing the consequences of what happens when you’re growing a lot. And so, it seems you’ve taken a much more conscious approach to, “This is some time when I want to grow faster, this is some time when I want to grow slower.” And so, I’m looking forward to the conversation, just what does it really mean to manage growth? And how do you think about when you want to turn the dial up and when you want to turn the dial down?
Kyra: You’re right, that’s a fascinating discussion and you’re always hearing, “If you’re not growing, you’re dead.” And well, my story is in the beginning, you’re starting a firm, you got to grow, you got to grow, you’ve got to have a certain momentum going underneath you and stuff. And so, back in the ’90s and 2000s, early 2000s, I had done a lot of things to get public attention and national attention, got a lot of media releases and things going on, so my name was out there. And we attracted a lot of very good high-quality clients from all over the country and we were definitely in a fast growth pace. And what I was finding was I didn’t have the capacity inside the office, it was like you’re saying, to manage the growth, you had to then go hire.
And as I was noticing as I’d hire people, managing the people was taking up my time versus my love area, which was interacting with clients and really being there for client service. So, I was torn between, okay, managing all these wonderful new people who were showing up by hiring new people that I then had to go train and manage them, versus slowing it down and taking care of the people that I had hired and really putting the quality of service in place. We made a conscious decision before the 2008 downturn to really control growth and understand it and hire a little bit more slowly as far as getting the right people in place and started to really focus on building the culture and understanding the growth and putting growth needs first versus just massive growth.
How Kyra’s Development And Notoriety Affected The Growth Of Her Firm [05:31]
Michael: This sparks a lot of questions for me, though. So, first is I’ve got to ask what were you doing to get all of this, as you mentioned, public national media mentions that was making the growth appear and high-quality clients appear from across the country? What were you doing?
Kyra: In the ’90s, ’93 to ’98, I served on the…first it was the ICFP Board and then I got off just as the merger was getting started between ICFP and IAFP. During that time period, met some different people who were doing magazine, so I got put on the cover of “Worth” magazine, got written up four different times as being one of the top advisors in the country, and that was how it kind of got started as far as some sense of attention. From there into the early 2000s, I then went from the ICFP Board to the Board of Governors for the CFP certification and get similar attention to that and was in several magazines that were not just professional inside magazines, but were public articles and public magazines and written up. People look at that and it’s kind of like the magazines that sell or, “What’s your top 10 mutual funds for last year,” you’re going to buy that to learn what’s the top 10 but they don’t know that they might be the lowest 10 in the next year but anyway, people buy it. And that’s the same kind of thing that I think that the magazine saw with these financial advisors is people look at it, “Here’s the top 60, here’s the top 200 financial planners,” and people look at it and if you find someone in your area or near your area, you might call them up and find out more about what they do and how they do it. And that’s how we got the growth in the first place.
Michael: Interesting. So, did you get involved with some of these organizations in the hopes of building visibility, or did that kind of happen to come as a side effect once you got there?
Kyra: I did not make a huge attempt to get a slice at the “Worth” magazine and the connection. Bob Clarke at that time was the senior editor of “Worth” magazine from I don’t know when, ’93 to 2000, I’m pulling out numbers there. And he actually did a presentation in which he fell off the back of the stage during this…he was moderating a panel of fee-based versus commission-based and you had both sides going on and he was having a discussion about, “Should you be fee-only?” This is ’93, so, “Should you be fee-only,” versus, “What’s bad about handling commissions, what’s all right about doing commissions.” And so, it got hot, the whole panel was intense, the audience, you definitely had both sides in the audience and stuff. And as he was walking across the stage to go back to the podium, he fell off the back of the stage. And so, this was all done in a hotel in Washington. And as I got on the elevator after that panel discussion, he got on the elevator also. And I reached my hand out and said, “Hi, my name is Kyra Morris, and you’re Bob Clark and you just fell off the stage from that presentation. And I just want to tell you, it was a great presentation, you handled it well.” Well, that started a friendship, just kind of being a little bit silly with him. And that started a friendship that then led to other things. So, that’s the only reach out, literally, that I did.
Michael: In the elevator after he fell off the stage.
Kyra: Yeah. And so, it started from there and I’ve been to places, met people, and that kind of thing just happened. Now, it’s also been as much a conscious effort to not do that, to not try and get in the public eye to slow it down more. And so, later on when it was like 2007, before 2008, so ’06, ’07 period, I hired some good people, really wanted to nurture them, had great client base, and made the decision not to continue to… If I got a call from a reporter, it used to be, “All right, a reporter is on the phone, I got to get back to them quickly because they probably got four more people that they can get to if they don’t get to you, so do it fast.” It was like, “No, let them go find those four other people right now.” And so, a conscious choice to not follow up as quickly, not to be rude but just to not go after it. And then as I stopped really going after it and stop pretty much even…as I got off the CFP Board, continued with the different conferences that were out there, but did not…in fact, the only conference I really go to now…and this is not saying anything bad about the conferences, it’s just my personal choice. The only conference I really go to now is the FPAs retreat that’s coming up in, I think, May. I hope it’s coming up in May, we’ll see.
Michael: We’re all willing that the various variants settle down by then.
Kyra: So, it was not only a conscious decision not to go after media, but I’ve stopped pretty much doing a lot of the national things that were getting me more of the attention. And there’s other people who have stepped in place, there’s no lack of phenomenal people who have stepped in place who are…or have continued and who are now getting the national attention. So, that was also a conscious decision.
Why Capacity Means Having A Well-Trained Staff [10:50]
Michael: So, talk just a little bit more, as you said, you’ve gotten in this period around ’05, ’06 where had a lot of growth, didn’t feel like you had the capacity, though, because of the growth that was flowing. So, just talk to us a little bit more about that. What was happening on the ground in the practice? How was “We don’t have capacity” showing up for you?
Kyra: Right. At that time, I was the only CFP in my firm. I had hired two people who were studying and wanted to sit for the CFP. They hadn’t been through the CFP program, but they were very competent people and wanted to sit for the CFP. We had great clients and just trying to manage all of that was what was going on that was like, “Okay, I’m going to take care of these two staff people, help them along their way,” and I never wanted to give up…in fact, I still don’t want to give up my client-facing activities. I enjoy being in front of clients and doing the work with my clients. And so, just managing that was when I said, “Okay, I got to slow down.” And I got a great family. So, being able to have the family time that I wanted to have, manage the firm, take care of the staff, and take care of the clients just all got to where it’s like, “Okay, how do I do this all and do it in a way that I’m still having fun and keeping a life balance?”
We don’t call it work-life balance, which everybody is like, “Oh, managing this work-life balance.” And I’m doing what I love, my work is my love, my work is my play, but I’ve got other things that are my loves and my plays also. So, it’s a life balance of being able to do all the things that I love, that I want to play with, that I want to enjoy, in which client-facing is one of them and doing financial planning was part of that whole balance. And so, just managing life so that I could continue to enjoy it, continue to grow in a way that was reasonable for my needs and for the staff that I was hiring.
Michael: So, how was the balance getting off for you at that point? Was it you were getting pulled in and had to do huge tons of hours, so was like, “No, I’m not going to do tons of hours, but then as a result, things are slipping through the cracks? Was it something else? What was happening?
Kyra: That’s exactly what’s happening. I mean, hiring people…still even today, although I’m not the only trainer today, this is back earlier on when I had a smaller staff, we’re still a small staff but a lot smaller staff and I was the main trainer. And a little sidebar is my background is I’m an engineer and I’m going to write a book, “Even Engineers Can Hug,” getting engineers to the stage where they can hug takes a certain process. Hiring people that can handle…we have a good bit of engineers as clients, hiring staff that can handle both the people side of the work that we do and the analytical side, we are a pretty strong analytically-based firm and we do a lot of in-depth research and analytics for our clients. At the same time, we want to have that friendly demeanor.
So, getting the right staff in place that could meet my desires for presentations was taken up a lot of my time and a lot of the efforts that I had during that time and we were growing, so just managing the overall finances. Also, oh, stepping into the scene, big time in this period, you have compliance and compliance is a pain in the royal bahookahs. So, that’s also stepping in, so managing the staff, taking care of compliance, and I was the chief compliance officer, chief investment officer, chief financial planner, and business manager, trying to wear all the hats at that time. I didn’t really have…I was getting people in place but they weren’t there yet to really take over all the roles. And that might have been…when people say, “You can hire these people from the beginning,” and that might have been where I didn’t do it right and going out and finding somebody who’s already CFO quality or whatever to step in. It wasn’t how I grew it.
Michael: So, what was the hire you had to make to get to get through? Was there a particular hire or a particular role that changed that trajectory? Or was it just a sheer volume, “We just need more people in total?”
Kyra: Well, it was a hire…it was the right hires, not just a hire but the right hires. So, I had hired some good people and they taught me more about how to manage good people and we were talking about having A player people, “How do you really manage A player people and how do you let go of B players if you’re not wanting B player?” So, the right hirers, getting really A quality people in, and then getting them to where they were performing at the level that they could perform just took some time and that was the big thing at that time was just getting the people in place and giving them the time to grow into their capacity. And I did not have the big hire that’s helped turn the corner and also was a really good investment bank person. I was the chief investment analyst. I did hire somebody that helped a lot to put the trades up and confirm on the next day and handle the behind-the-scenes stuff and operations for what we were doing.
But other than that, getting another person who could really help me look at, analyze our model, see what was going on, interact with clients when you have a downturn like 2008 and help with those kinds of things, so it was a variety of hires but they had to be good hires. It didn’t have to be a lot, like having a good planner other than myself in the office, having a good investment person other than myself in the office. Our operations, people, don’t downplay your operations person. If you’ve got a good operations person…and when I say operations, I’m talking about people that do the downloads if you’re doing AUM, who can take care of opening up accounts, moving money from one place to another, or getting money to a client when they need it, handling RMDs, required minimum distributions, from their IRAs, if you’ve got a good quality person who is taking care of those behind-the-scenes persons, that can make or break a firm. And that was one of the key hires that we put in place that really showed us that, “Okay, here’s, a person that’s freeing up the rest of us to really do what we want to do,” and that’s interacting with the financial planning overall for our clients.
Michael: So, it sounds like, I guess, three core areas, which for so many of us literally are the core of the business. Someone that you can…someone that can drive the investment side that you’ve got confidence with, someone that can be the planner and even be client-facing that you’ve got confidence in, and someone that drives operations, right?
Kyra: Right. Yeah, the planner, I definitely want confidence in because I want them to be their own lead planner, I don’t want to be the lead planner for every client that walks in the door. So, building another planner or helping another planner get to that stage where they’re comfortable and I’m comfortable with them being the lead planner without me being in the room.
How Kyra Manages Her Staff And Attracts Top Talent [17:48]
Michael: So, you said you had this approach of trying to attract and manage A players and let go B players. So, how does that work in practice? What do you…?
Kyra: Okay, this is the hardest part.
Michael: What does management of this look like for you?
Michael: Well, this is the hardest part but I tell people…because I got in trouble with…I had some good staff and we were looking for some more good staff and we would hire these people and within six months or less than a year, I was letting them go again. And so, my other good staff people were going, “You’re letting them go too quickly, they’re quality people, they’re quality people, they’re good people, you’re letting them go too quickly.” And basically, I’m like, “Yeah, but I didn’t get along with them.” And leaning on the rest of the staff, they come and say, “Oh, you’ve got such a good staff, they’re willing to help me,” I’m going, “The rest of my staff shouldn’t be there to just be your help,” and so I would let people go. We then hired someone, and this is the only person on our staff that we’ve got that really doesn’t come from a finance background, we hired her in 2015 and she’s just an operations person, as I was talking about, we’ve been really searching for this quality operations person and we hired her.
And in less than three months…she’s a philosophy major out of the University of Fresno, had a banking background, a little bit of banking experience. But in less than three months, everybody knew she was the right person for this job. So, I use her as an example even today, “How quickly did we know that Laura was the right person?” And I can say that about everybody else on the staff that’s here and now, it’s like, “How quickly did you know?” And there’s something that lets you know. They might not have all the skill sets, they might have some quirky personality, but they still fit the team as far as overall personality and there’s something about their competence. So, it’s both the competence and the personality side, a cultural side, that’s got to be the full blend. And so, I’m willing…this is the hardest part, I’m willing to let people go fairly quickly if I’m not feeling the whole harmony of the picture.
And so, when I really started recognizing this and doing it, the rest of the staff had to kind of bear with me, and they weren’t totally sure I was doing it right. And this was like 2016 or so, I have a little leadership group, we went off on a leadership retreat, and we had two staff people that weren’t good fits. I didn’t bring up that they weren’t good fits, so I just said, “Okay, I’m going to say the name of a staff person,” to the team that was there, it was four of us, that was all. “I’m going to say the name of a staff person, I’m not going to ask you to say anything, but just feel how you feel inside when I say the name of the staff person.” So, I went through the whole staff and just let it resonate with them. I said that, “Anybody resonate beautifully that as soon as you say their name, instantly a smile shows up on your face or in your heart or whatever and you’re going, “I’m so glad I’m working with that person.” And did you say anything and kind of your stomach might have gone into a little bit of a knot going, “That person doesn’t quite sit with me as well?”
And it turns out the same two people that I was feeling were the same two people everybody else had noticed also. And so, I told them then, I didn’t know what I was going to totally do with these two people, but my goal was that within the next two years…I said two years, today I’m not sure I’d even say two years, that I wanted to have that same exercise with them and that every person that we mentioned would put a smile on their face or a song in their heart. And that was the goal. So, I started doing that and now it’s happened. It took some time, it takes courage to let people go who aren’t the right fit right away, but my confidence now is like, “But look who’s out there, they’re out there, the right people are out there.” You don’t have to settle for mediocre people, even though they’re good people. I’m not saying they’re bad people, but they’re not our A players. And so, now that’s what we’ve got and that’s what we’re holding to. And that’s another reason why we’re growing slowly.
Michael: I love just that framing like, “The right people are out there, you don’t have to settle,” right? I’m sure for some people, that may be taking them to other contexts besides employment and hiring, but keeping the business context, it’s okay to spend some time to continue to look to really find the right person, that you don’t have to settle. So, I guess I’m wondering from the flip side, though, just, “Okay, but how do you get comfortable firing the rest?”
Kyra: It doesn’t mean I’m comfortable, I’m not a mean person.
Michael: That’s why I’m wondering, how does that go? Because, to me, B players are an interesting…D players, most of us know how to fire, right? It’s like, “Okay, you’re basically one step away from having a client fire us or sue us yourself because you’re doing really not good things.” It’s not hard to get rid of a D player that’s a problem, they’re usually very clearly a problem. The phenomenon of, call it, B players is they tend to be getting the job done, they tend to be reasonably personable to be with, otherwise, they’d probably be Cs or Ds. So, I find there’s usually not a very overt pain point…
Kyra: With a B player.
Michael: …with a B player, so how do you mentally get there?
Kyra: What you’re talking about is fascinating and that’s something I’ve really been just listening to and continuing to pay attention to. I don’t think you should get confused with able and willing as far as looking at those two words. And so, an A player is both able and willing, a B player may be willing but not totally able to do everything that you’d like for them to do, but they get the job done and they don’t complain and they show up on time and they’ll say yes if you ask them to do a project. They might not be able to finish the project and have to pull in three other people to help them finish, but they’re willing. And so, what we’ve identified as we talk about people now is the able and willing. Obviously, if they’re not able and not willing, there’s your D player, you move them on pretty quickly. If they’re able but not willing, that person is just not going to perform if they’re not really willing. So, the real bugaboo are those people that are willing but not quite able, and what do you do with them? So, you’ve got to move them on, though, to be both able and willing to create the strength, that then the firm can continue to do what it’s going to do. Otherwise, you’re having to grow the firm enough to support these people who aren’t helping you grow the firm enough to support everybody else.
Michael: And so, just how do you handle this conversation? Even just down to how do you explain your…you know, “You seem very willing and you’ve gotten all your work done, I’m firing you.”
Kyra: Well, no, I put them on notice first probably, something like that, which says…
Michael: But how does that work, right? Because again, D player is usually easier to fire like, “Hey, you just did a really bad thing for the third time, so we have a three strikes and you’re out rule.” Again, Ds are a little bit easier to terminate and wind down, so how do you even set up the conversation for letting a solid B player go?
Kyra: Now, if somebody has been around long enough that at first they made it through and everybody is feeling like this is a really good person to pull on board and you’ve made it through the three to six-month timeframe that’s you’re going, “This person is worth the effort.” In the first three to six months, I’ve let people go…we give everybody a three-month easy out. So, within the first three months, I don’t even have to say much, it’s not for cause, I don’t have to give them a lot of excuses, it’s just, “It’s not really working,” and I pay a fairly decent severance even if they’ve only been with me for three months just to let them move on. So, those are the easy ones because you haven’t really built that, “Oh, they’re part of the family,” and blah-blah-blah. Once they’ve been around longer than the six months, you’ve got to start identifying, “What is it…”
And gives some examples, “What is it that they’re not doing right? Is it poor judgment in trying to help make decisions about a client or in supporting somebody else? Is it that they can’t get a project done? That they’ve had all the training that they should have and yet, you’ve asked them to do a fairly simple analysis of something and they’ve got to go to two or three other people in the firm to help them get it done?” type of thing. So, you’ve got to start really giving an example, “What are the things that are not setting well as far as the able side?” They’ve got to be the B players that we’re talking about are those that are willing but not quite able, so you’ve got to start really looking at what are those things that they’re not quite able to do that are pulling the firm backwards or not helping the firm go forwards. And so, that’s the part that then it takes a little bit of time. And usually, I’ll pull them in under me just to say, “Okay, what’s going on?” And I want this person now to work closer to me so that I can start looking at things and really identifying what’s going on if we’re not seeing the performance get to other levels before this point in time in working with other people.
Kyra’s System For Keeping Employees On-Track And Accountable [27:08]
Michael: So, I guess part of my takeaway from how you’re framing this is it feels like for a lot of people that have…we’ll just kind of call them B players on the team, they’re mostly getting stuff done, it’s going okay. Yeah, every now and then, there’s probably something that I wish they handled a little bit differently but it’s fine enough, we satisfice I think it’s the label for it. So, what strikes me about what you’re describing is that when you’ve got those situations, you’re spending a lot of time trying to get…it’s just like basically trying to get clear about where they actually are weak and still not doing well, despite generally doing okay. Not to be negative, but just to get clear on what’s going on, like what’s really the gap?
Kyra: Right. I call it churning, when you’re churning over somebody, when you’re spending your time trying to figure out why, why they’re not able to perform, why they’re not getting it done, that right there is one of the first signs that something is wrong. And it takes time, it takes time to try and coach them, to try and…as you’re sitting down to talk to them about something and they haven’t done it right, how do you…and they’re regularly not doing something right, how do you frame it so that you’re not hurting their feelings, so that you’re moving them on? It just takes a lot of effort. And the magic that happens when you’ve got A players is that the effort is effortlessness. And the magic with the team, when you’ve got A player team of working together, of leaning on each other…I was talking to you about life balance. Right now, with COVID, we’ve got people with children and all kinds of issues going on. But we all know that we’re going to take care of each other and we can depend on each other and we’re not worried about, “I’ve got to be home with my child today, therefore, the work is not going to get done.” We help each other, we are there for each other, there’s a whole team approach. But if you’ve got somebody that you don’t trust to really help, again, that’s taking some of the magic and the energy away from the firm into supporting somebody who’s not really bringing all the magic and energy that you know you can get.
Michael: And then how does this conversation queue up?
Kyra: Well, it queues up with…usually, it’s me sitting down, and in fact, so far, it’s only been me sitting down with them going, “Okay, let’s go through some of the issues that are happening.” And you start off, you always have to start off with saying what they’re doing well, what are the positive things, and then cueing into, “But here are some areas we really need to see improve.” I try and come up with things that are measurable so that we can set a time frame in place, a review period, and this is where another great source of the team. I’m not saying everybody on the team has got to be mirrors or the exact same of each other. I’ve got another really good staff person, gal named Tiffany Richie, and she and I are so different. And I pulled her in when I’m having this kind of conversation with somebody because it’s like, “Help me, help me look at this,” we get two lenses and she actually came up with this wonderful spreadsheet, drop-down box, stuff like that, that says, “Okay, here’s the areas and here’s how we’re going to rate and here’s what we need you to do over this period of time in order not to be let go.” And we basically put these people on notice, give them some measurable things they’ve got to do, and give them a timeframe.
Michael: And so, you set just a very specific, “Here’s what you’ve got to improve on because I spent some time with you now to get clear on you’re making bad judgment calls about this or you’re making too many paperwork mistakes on that, they’re minor but they’re adding up, we need to fix this. So, here’s where I need you to focus. You have three months to improve in this. We’re going to talk again in three months.”
Kyra: No, in one month. We usually set up closer than that. It’s shorter-term time periods so that you can get back to them quickly if they’re seeing…usually, with the notice that I’ve given recently was a six-month notice and I said, “Here’s the things you’ve got to improve on over six months.” And then we set it up to where once a month, we review what it is that they’re supposed to be improving upon and give them an actual score that says, “Here’s where you need to be at the end of the six months.” And if you’re looking at the A players and you put it on a 1 to 10, they’ve got to have a 9 or better by the end of the six-month period in everything that you’ve identified that they need to improve upon, or at least an average of a 9 or better. So, they might knock it out of the park in some things and not be knocking out of the park totally in others and still get that average of nine type of thing is what we’ve really tried to do.
And the only thing I do in the beginning also was to offer my three months’ severance that says, “Here, you can either take this, here’s what you got to do over the next six months, or you can take this three months’ severance and we can give you a good reference if you go someplace else as far as…” Because like I said, these people are willing, they’re just not quite able and our firm is really a tough firm in the analytical side of what we ask people to do. It’s not just sales and client-facing and being super nice to people when they walk in the door, we’ve got to have a strong analytically-based team that can actually do some of this analytical work that we stand on when we’re interacting with clients. So, there might be other firms that can fit that aren’t as egregious as ours around certain areas or that might be better for their culture, it’s not that they’re a bad person. So, I offer both. So far, nobody has taken me up on that three months’ severance.
Michael: So, you’ve got someone that you got concerns about…I just want to make sure I’m following how this plays out. So, you’ve got someone you’ve got concerns about, I’m assuming at least they’re past the initial first few months, so they come on and you’re just a few months in like, “This isn’t working.”
Kyra: Right, right, that’s easy. I’d say it’s easier, it’s never easy. Yeah.
Michael: So, they’ve been here for some time but they were improving, they’ve plateaued, it’s not where you needed them to be, right? So, you kind of got the B player stuck on the team. So, when this queues up, first, it’s actually just internal like, “I think I’m going to have this person report a little bit more to me directly, if they weren’t already, just so I can get a little bit more line of sight and try to get more clarity of what exactly is the issue.” Is it a paperwork issue? Is it actually that they’re not good at detail? Is it that they’re actually good at detail but they’re not organized, they’re always doing the paperwork at the last minute because it’s actually an organization issue? Or just like whatever it is, it sounds like in your first year, you’re just spending a little bit of time close to them trying to crystallize what exactly is the actual root issue here that they’ve got a problem with.
Once you’ve got some clarity on that, it’s, “All right, we’re going to sit down for a conversation, I’ve got some concerns, here are some areas where I’m seeing some problems, I’m going to give you a choice. You can decide that we’re just going to part ways, I will give you three months of severance and a reasonable letter of recommendation if we can just decide this isn’t working. If you want to stay, you’ve got six months to improve, here are the things you need to improve in. We’re going to check in every month over the next six months and I’m going to actually score how you’re doing on your improvement. And if you don’t get to this level by the end of six months, then we’re still going to have to move on.” That’s basically the conversation and then they make their choice, you score them up over the next six months and they got there or they didn’t.
Michael: I am struck at least by that from the whole perspective of getting…either getting comfortable to terminate someone at the end if it comes that at the end of six months…I don’t know, maybe this is my hyper-logical, rational quantitative brain kicking in. But I think like, okay, I get to the end of the six months and literally, we sit down and I’m looking at how you’ve done, we said, “You needed to get to a nine,” it’s literally a bunch of sixes and sevens, this is probably going to feel easy…they’re gone from their end but even on my end, I don’t like firing anybody either. Okay, I mean, we…
Kyra: And you usually know before the end of the six months.
Michael: “We set a score, we set a target, you’re clearly not reaching it, I’ve got a spreadsheet to prove it now.” Right? But I feel like it becomes easier to rationalize if you’re the person who doesn’t maybe like firing people and letting them go when it just, “Look, we set a super clear system with clear criteria, we scored it up,” they’re literally just not adding up.
Kyra: Right. You got it. And you usually know before the end of the six months of what’s happening and they know too.
Michael: So that means sometimes you have people who don’t take for three months’ severance but then four months in are like, “Yeah, I think I’m just going to bail after all?”
Michael: Can they come back for the three months’ severance at that point? Or is it like, “You passed, you lost your window?”
Kyra: It’s pretty much off the table. Depending upon the circumstance, but it’s pretty much off the table after the first offer.
Michael: Okay, but they realized it’s not going well.
Kyra: Right, right.
Michael: So, I got to ask the other end of this. I know a lot of us in business owner world struggle with this as well which is like, “Okay, but if I let them go, then we don’t have a person, then I got to do even more while they’re gone, then I also have to hire a new person and that can be challenging.”
Kyra: That’s part of the whole thing and that’s where if you get good people in place, you’re not having to let them go and you’re not having to move on, so we’re letting the people go more quickly. If you get somebody who’s been around for several years, now you’re having to pull this conversation and you didn’t do it right in the beginning is usually what’s happened. And so, you do have to get somebody in the pipeline and that’s where just thinking ahead and going, “Okay, if I let this person go, what am I willing to do to make ends meet or whatever for capacity reasons until we can get the next person interviewed and in place?” And that’s just one of the next steps that’s got to happen if it isn’t working out.
Michael: And how do you go about that? Because there’s a certain size for businesses where they’re just kind of always in continuous hiring mode and looking for people. So, it’s like, “Oh, we’re letting someone go, hey, I talked to Jenny last month, I’m going to actually call her back because we have an opening now.” But my question is like you’re not growing at that pace, you don’t hire at that pace, so…
Kyra: We’re not continually hiring.
Michael: It sounds like you’ve got a corral of resumes hanging out to say like, “Oh, we’re just going to go grab the next one off the list now.”
Kyra: And it depends on the position that we’re trying to hire for. If it’s for a financial planner that’s going to step in and start off as an associate financial planner, we know the technical schools that have the CFP program in place and we talk with the professors and try and get some ideas of who are bright shining stars there.
Michael: And are there particular CFP schools that you’d like to go to for that?
Kyra: Well, we’ve got two people here from Virginia Tech, and Virginia Tech’s got a phenomenal school. We’ve interacted with a lot of the other beginning planners from Georgia. I teach the residency program and have met people from all over San Diego and Texas Tech and K State, and I’m going to leave some out that are awesome. So, I’m just looking at them saying, “Here’s where we go.” There’s also a service…and Caleb Brown is going to kill me because I can’t remember the name of his firm and it’s awful.
Michael: New Planner Recruiting.
Kyra: You got it, you got it, New Planner Recruiting, and we’ve had quite a bit of success working with him. In fact, two of our hires have come using him for the associate planner because he really puts them through…we let them know what we’re looking for, what kind of personality we’re looking for as far as kind of a cultural fit. He does all the testing and they actually have to write some simple plans and answer a bunch of questions and stuff and he scores both on the people side and the skill set side and stuff before they ever make it to our process for interviewing. And we developed a pretty thorough interview process that we go through also in order to help determine who makes it through and who we’d be even wanting to consider hiring.
Michael: So, I guess the first part of how do you get comfortable with this and the fact that you have to replace them is just you get to know some CFP programs and you hire a firm that does recruiting and just let them give you a list of candidates.
Kyra: Yeah, if we were looking at replacing an associate, I’m probably already in touch with Caleb and willing to pay Caleb’s fee to get me some people in the pipeline. I don’t have to hire anybody and it will cost me something if I don’t, but that’s okay.
Kyra’s Interview Process To Find Employees Who Are The Right Fit [39:38]
Michael: But you said they may, I guess, score people and queue them up, but it sounds like you still got your own thing about how you ultimately vet who’s going to be a good fit. So, what’s your interviewing process?
Kyra: We’ve got our own analytical tests that they’ve got to pass, we’ve got our own writing sample that they should do and they do do. We test their own credit scores and stuff like that also, we will go after. And once they’ve done those things and we have an interview process that actually will start with…if I’m not the person that we’re hiring an associate planner and it’s not for me to be my associate planner but it’s for one of the other lead planners in the firm, an associate planner for them, they’ll be on the interview side from the very beginning but we’ll pull in the operations team, we’ll pull in the investment team. We’ll pull in everybody to kind of talk with them, and then if it’s not for me, I’m usually the last one that gets pulled in. But they go through a series of two and if they make it through the second interview, actual interview, not the testing and stuff like that, the writing skills and the testing skills, but two interviews and if they made it through both of those, then I’ll get pulled in for a last round of interviews, in which we’ll get them…by that time, we’re trying to get them to come locally and interview locally if they’re not local, and most of the time, they’re not. But get them to interview locally and even do something that’s kind of a fun thing where we might go out to lunch with them or out to dinner or something like that, to do something else with them to see the rest of the fit that’s going on. And that’s the final stage.
Michael: And are there particular questions that you ask, things you delve into? What’s making your interview process work?
Kyra: We’ve developed our own set of questions at each stage of the game that we have written up ahead of time that we’ve been using now for the last five years, six years or so. And not much has changed. We edit it a little bit, not much has changed in asking those questions at each stage, what questions are we asking, and then by the time I’m coming along. We played a lot off of the “Give us an example of when you were in this situation,” to see how they’ll tell us a story that then covers the situation and gives you a little bit of their personality side plus their ability to handle the details of what you’ve asked them to do. So, kind of that blend, which is what we’re looking for. So, we play off on that process a lot.
Michael: I’m trying to think of an example but as opposed to asking them, “Do you have a good attention to detail?” Say like, “Give me an example of a time where your attention to detail was put to the test and what you did?” And just see what kind of…
Kyra: Or if you want to see how they handled an adverse client interaction or something, “Give me an example of a time when you were uncomfortable interacting with somebody and tell me how you handled it.” And what you’re looking for…well, what I’m looking for is you don’t want them…and one person described it as…as they’re telling you the story, they’re going to tell you all about the wallpaper and the pictures on the wall and the type of carpet and whether this chair was comfortable, but they’re not going to tell you the facts about how they approach their own sentences, how they approached their own questions, how their heart was feeling when the person said, “You know, you really screwed this up and I’m mad at you now.” But they’ll tell you all about kind of the surroundings of what they were going through, but not the real facts about what they were going through and what they were dealing with.
And I remember once, I was actually got coached in this process, this was back in 2011 and I got coached in this process with a behavioral gal who was doing all this stuff for HR. And she came in and she actually sat with me in this interview and I had a woman that we were interviewing who, to me, seemed perfect, I’d gone out to dinner with her, I had so much fun being around her. She had put herself through law school while working for another CFP firm and stuff and was moving to the area and I just thought she was awesome but I was really looking for a backup person who had super attention to detail. And so, the gal was sitting with me and we let the other person know, “We’re going to ask you a series of questions and then we’re going to break and the first series of questions are going to be asked by my coach and then the next series of questions, I got to ask.”
And we let them know that I was also being coached during this whole thing. And after the first series of questions asked by the coach, we take a break and she goes, “Well, what do you think?” And I’m going, “Oh, she’s awesome, this is so great, I think she’s wonderful.” And the coach said, “Tell me the facts that she let you know when you asked her this question.” And when I started going back to the story that the person told us, it’s like, “Well, yeah, you didn’t really get a lot of facts, did you?” And she said, “Okay, your turn, you get a turn. Now I want you to ask her questions where she’s actually giving you facts, actually giving you details.” And my coach even pointed out on her email that she sent me about wanting to interview and her resume, all the mistakes that were made grammatically and stuff like that, and then goes, “Her attention to detail didn’t showing up here and it hasn’t shown up on these other things, you go next and see if you can get her to pay attention to detail.”
And so, I started going next and asking her the questions and I noticed she wasn’t, she wasn’t giving me back the details that I was wanting to get from her. So, finally, I came up with one because I knew she had put herself through law school. And at the end of when she graduated law school, she was actually pregnant and she had her baby, and I’m going, “Okay, every woman knows the details around that innocent first child, the details on that child of that day.” And so I said, “Tell me about the day your son was born and how you handled it.” And all of a sudden, my HR person is squirming in her seat. You’re not supposed to ask those kinds of questions and she’s squirming in her seat because I guess I just stepped over legal bounds. But I got the facts, that question got the facts out, that woman was able to tell me about the day her son was born and it was graphic detail. It was wonderful, the story was so good. And so, that was just kind of an example of what I went through and getting it out of this person. I didn’t hire this person who then did move to Charleston, worked for another firm, started her own firm, and has done quite well. So, she may have been a good fit for me in the long run, but I didn’t hire her at that time.
Michael: Interesting, interesting. And so, you’re comfortable going there.
Kyra: Right, right. So, that’s been pretty successful in going through all the staff, and then for the staff to be as honest as possible about their own thoughts around whether this person’s making it through the process. And then when it comes to me…by the time it’s made it me and it’s made it through all the other layers, unless there’s something really, really quirky, and that hasn’t happened yet, I’m probably not going to negate their choices and tell them no. So, I get a final choice or a final chance but so far, by the time it’s made it to me, usually the people they are putting me in front of are good people.
Michael: So, take us back now to just the discussion of these turning growth paths. So, you had kind of this fast growth period in the late ’90s, early 2000s, and then a consciously slower growth like, “I’m going to figure out some of this team and hiring stuff,” in the mid-2000s for the years that followed. So, talk to us a little bit more about that shift because I know for so many of us, the early years are so scarce for so long, you kind of get hardwired and you always take every opportunity no matter when it comes because you don’t know when the next one’s coming. I guess I’m just wondering, how do you get comfortable with the downshift, right? I’m just imagining the first time of, okay, every time the media calls, you got to call back quickly, otherwise, they’re going to move on and get someone else and you make this conscious decision of like, “You know what? I’m not going to call them back as fast, if they get someone else, that’s okay.” But is it really? How is that okay?
Kyra: It is an interesting feeling. A lot of my friends are on that Barron’s list of the top who’s who in the country and I look at it and going, “Wow, I know them, I know them, my firm is as good as their firms,” stuff like that. So, there’s still a feeling that’s there that you look at it and going, “I could have done that.” At the same time, we’ve done it right in our community. I’m in Charleston, South Carolina, and we’re one of the oldest firms running real financial planning, we’re not a brokerage firm, we’re an independent fee-only registered investment advisory firm, and one of the oldest in Charleston. We’ve got a great reputation, we kept our nose clean, we’ve got a great staff and a good community of people out there who are saying good stuff about us. And so, we aren’t looking for clients and so that shows now we’ve done it right.
When we first started slowing it down, I was actually slowing it down at a time when I wasn’t looking for clients, I was still using the momentum of what had happened when I was chasing the media and chasing some of the growth and stuff, and so we had a momentum of people still showing up from that time period. And then putting the effort into growing the firm, staff, support system, really looking at what does it take? How do we want to develop as a team or do we want to develop as everybody is their independent silo that you’ve got a planner and they go figure out their own thing, they have their own investment style, they have their own presentation style, and as long as they’re bringing in clients and covering themselves and their overhead and creating enough little profit margin for the rest of us, we’re happy? That’s not our model. We work together as a team, totally interacting.
Now, I have my own clients and Tiffany may have her own clients and Laura may have her own clients but at the same time, our presentation is very similar to each other, the process that we have in onboarding a new client is the same, we only have one investment department that handles all the clients. And therefore, I can step in and I know pretty much how Tiffany has interacted with her clients. If Tiffany needs to be out, I can step in and help her clients. So, we decided on this team approach versus the independent silo, “Let’s just grow the firm as fast as we can” approach. And that has really worked. We’ve got quite a reputation in our community for the quality of the work and the in-depthness and the full service that we do for our clients to help our clients really sleep easily and that they’re being taken care of and that’s kind of our reputation. So, we’re still not looking for clients or doing a lot, a lot of marketing out there trying to drum up business. So, we’ve done something that’s worked.
Michael: But just did you have fear when you said like, “I’m going to slow this down, I’m not going to pursue leads as fast, I’m not going to jump to offer it as much?” What happens if you don’t return some reporter calls as fast and then they never call again?
Kyra: Well, so far that fear has not been warranted. I can’t remember the fear. We had enough momentum in the beginning when I was really trying to build the infrastructure of the firm, we had enough momentum going that was covering the needs of the infrastructure and my own personal needs. So, the fear really wasn’t there and then we just keep growing. We’re just not growing as fast as maybe some other firms but we just keep growing, so I haven’t really had to have that fear. We now have a firm that if the rest of my staff had said, “We want to go into a faster growth phase,” I think we now have the firm and the infrastructure to where we could put on the gas and start to try to grow faster. I brought that back to the team with a lot of team discussions this last year with…we have a leadership team, with the leadership team this past year, and I’m not getting the sense that anybody wants to put any faster growth in place than…
Michael: Because now you got a team that’s used to the growth that you’ve got.
Kyra: Right. And it’s magical, it’s just a wonderful thing to do in which we really feel like we attract people who want to help other people, who really look at financial planning as a way that benefits other people. So, we attract people who see this as a calling, who are fulfilled in that we’re doing a lot of good work for people. We manage the whole firm so that there is this life balance and that we can take care of each other and our lives. We adopted from another firm…and once every five years, you get a month sabbatical and we have both the maternity and paternity leave paid for. So, the total life balance and place to work is just…it’s a good thing that’s happening right now. And so, so far, the fear isn’t there in that we’re not going to be able to continue to have the growth that’s in place. We have had some fun recently doing some sense of marketing, in that we did hire a marketing firm that manages our website and helps us understand the SEO stuff and the Google ads and this kind of thing. And that’s been mostly kind of for play, writing blogs and stuff like that that we’re trying to do more of and that’s because I’ve got another person on board…I enjoy writing, another person on board who enjoys writing, and so we’ve been doing some more of that.
And that might be helping us some in getting some of the stuff in the door. Our website has gotten a lot of people that show up doing whatever search and they find the website and they come in. So, we’ve put that kind of thing in place, which looks to have paid off but we aren’t doing a whole bunch else. Maybe my biggest media interaction, this is more in-house professional as far as looking at trying to tell my story or get out there in this kind of way. And so, it just hadn’t happened. Talking about fear, I stepped into this year and there’s fear. The market is in a strange place, inflation that’s now doing a strange thing again, which we haven’t had to deal with since pretty much I’ve been in practice. And so, a lot of things are happening now that I’m kind of going, “What’s going to happen this next year?” And so, there’s that kind of…I won’t call it fear, but concern, questions that go on constantly, to make sure that we’re continuing to have the economic base that we need to have to continue to exist and grow and grow enough so that my staff can keep up with inflation too. So, those fears…I don’t like the word fear, but those questions and concerns exist, and we are dealing with those in the best way we can.
Where Morris Financial Concepts Stands Today [53:53]
Michael: So, paint the picture for us of just the firm as it exists today. Where does the business stand?
Kyra: Okay, the business right now, we’re around 350 million under management. We’ve got around 250 households, and we have gotten stronger. I think somebody asked me, “What’s your niche?” And we worked for about a year and really trying to decide what our niche would be going forward because we had no niche. We did a demographic of client base, found out most of our clients claim they’re retirees, we have a good chunk of engineers, good chunk in the medical field. And so, we’re looking at it going, “Okay, who do we want to work with?” And after a year we decided, “Why should we choose a niche when our real niche is do we enjoy working with this person? Do our value systems sync up? Are they putting a smile on our face? Are we happy when they call us and are asking questions or want to have an appointment?” And so, that’s our niche is that we want to work with people that we enjoy working with and that have a similar value system that we have. And so, that’s our only niche. And so right now, what we also came back with…we have a $10,000 a year minimum fee and we stuck to that. So, pulling in certain clients that we’re happy working with who are willing to pay the minimum fee and that’s pretty much our niche and we’ve been good at that part of it.
Michael: And are your clients mostly local to the area? I know you’re in the Charleston area.
Kyra: No, we’ve got…most of them are, we’re probably looking around between 65% and 70% are local to the area. But from the time frame when I was getting a lot of media attention, I developed a client base that’s all over the country. In fact, we’ve got clients in, oh, at least 40 of the 48 continental states. And then we’ve got, until recently, one in Hawaii, and we’ve even got some in Europe and we’re in Australia, but the one in Australia just moved to Europe. So, we’ve looked at that too. A lot of those came from the earlier times when I was more media-present and just attracted people. And then we also take on the multi-generations, we’re now on our G2s and G3s, which means second generation and third generation of our families. And so, the children and grandchildren of our original client. The original client might have started off locally and now we’re in Wisconsin or Maine or someplace else because their children are elsewhere, and we maintain the relationships.
Michael: I’m curious if two-thirds of your clients are local, or maybe even three-quarters at some point and some moved sign away, if three-quarters are local and three-quarters are retirees, isn’t your niche retirees in the Charleston area?
Kyra: Well, that’s what’s been…
Michael: It’s a niche, it’s a nice area and that’s all your clients.
Kyra: Around 2000 to 2010, there was this big thing about, “We’ve got to do retiree planning, we’ve got to come up with the safe withdrawal rate, we’ve got to do all this.” I’m going, “I’ve been doing retirement planning in the Charleston area since 1983.” So, we do have a good retirement planning base and can work well with retirement planning or with people in retirement. Most of our clients now are in retirement and are local but you know what happens when people enter retirement and…well, just enter retirement, you know what happens?
Michael: They go wherever they want to go when they retire.
Kyra: No, I’m not talking about where they leave but there’s an end to retirement. Most of our clients that came along with me now, 65 was young for our retirees. So, we had…I don’t know the exact number but we have 15 clients die last year, and this is just one of the other things that happens. So, although we work well with retirees, we’ve tried to…now if we’re looking at a niche or where we’re trying to go, to go either to pre-retirees, where we’re looking at that accumulation phase with good people, we enjoy working with who are up and coming executives or doctors who aren’t yet in their full profession but are stepping into the medical university locally in a nice way. And we’ve tried to look at different younger people that can grow more into retirees versus even the…although we’ll take you, if you show up at our door and you meet our needs as far as paying our minimums and stuff and you’ve got $1 million to $5 million, we’re probably going to take you at age 55 to 60. But our real desire right now would be to be bringing in a little bit younger people who are accumulating that we can develop those niches with so that…my staff is young. Besides myself, there’s the professional staff, we’ve got a…I think he’s 47-year-old is the next one and everybody else is 40 or younger. And so, the staff is pretty young, so I need to have a good client base here that they can grow with, we’ve already got a good client base that I’ve grown with, and so we’re trying to balance that out a little bit more. But you’re right, we’ve got a great niche with retirees in the Charleston area.
Michael: So, what’s the total team structure look like now that supports this?
Kyra: Okay, we’ve got four certified financial planners and a CFA who heads up our investment department. And then we’ve got a chief compliance officer who also has made it through most of the CFP program and just certain clients…he’s only got about 10 to 20 clients and actually, it’s probably less than 20, that go directly to him and that he’s their lead planner for although he’s not a CFP. And we’ve got a business manager who runs the front office. And then we’ve got a tax department, but the tax department is actually a separate business but we’ve got a person in the tax department who bounces back and forth because most of the tax business that we have is servicing or does the tax returns for the financial planning office.
Michael: And is that a separate offering for clients? Is this a part of the $10,000 fee?
Kyra: Nope, it’s a totally separate business. We want to keep those firewalls in place between the IRS and the SEC. There’s some pretty good stuff that can happen on both businesses, and so just to keep them separate for all kinds of reasons has worked. And the tax office does have clients that are not financial planning clients or even part of the financial planning firm, but it can be a feeder.
Michael: Meaning you are taking…the tax business is doing work with folks who may not even be clients to the firm, you’re also just doing tax, turns it out into the community, and that may serve up client opportunities for the firm.
Kyra: Right, and it has. We don’t pull people in saying, “You’ve got to work with us and then bring all your money so that you can be a financial planning client,” but we work with them, and then usually over a couple of years, they’ll be, “You do this part too on this side? Because we’re in the same building, you walk in the front door and the one person that greets you actually greets both firms’ clients and interacts with both firms’ clients. And so, that’s one of the other things that’s going on that’s helped us a little bit. And it’s one of those weird things but I actually enjoy doing taxes. Very few people enjoy doing taxes, I actually like doing taxes.
Michael: So, let me ask from the opposite. We talked about building your team and how you handle the B players to move them on when maybe it’s not always entirely clear that they need to move on, so you try to get clear on why they would move on…
Kyra: Right, and I don’t want to focus on that part because we haven’t hired B players in a long time. We nail our hiring process down well, good.
Michael: Well, my question from the other end, so what are you doing that retains the A players?
Kyra: Well, they stepped onto the platform for a reason and they come to work with us for a reason and we try and make those reasons match up with why we exist and why they’re here. And they have a voice, everybody’s got a voice and leadership is a big part of our culture, so we want everybody to step in. And at least we have different levels of leadership and it’s pretty clear how you work through the leadership pipeline and everyone is supposed to be a level one leader within one year, and there are certain criteria you’ve got to go through. We are lifelong learner-oriented, so if somebody really enjoys learning and wants to continue learning, we will pay for MBAs or other graduate degrees that support…I’m not sure I pay for somebody who said, “I want to really go learn about South African art and its culture.” I’m not sure I paid for that.
Michael: Reasonably related.
Kyra: Yeah, something like that, that we support the growth, the life balance that we put in place that helps people enjoy their lives and enjoy their work. We try and do all that kind of stuff. And so, it has worked.
Michael: How is that working in practice? A lot of people try to talk about doing work-life balance or life balance, but what does that actually mean in your firm? Just what are you doing? How do you do that?
Kyra: We let people live their lives and yet, we also require them if they’re going to stay here to get their work done. So, we hire people who want to get the work done, love what they do, show up with a passion. We really want those A players who are here for a reason. And A players create almost…it’s not competitive, that’s not really the right word, but in a sense, it is, environment in which we want to show that we’re the best that we can be, each of us wants to show up being the best we can be that if somebody needs help because their child is sick, we want to make sure they know they have help and we want to be the one that’s showing up to make sure they have help. Every Monday, we have our staff meeting and you get to shout out somebody’s name and tell why you’re shouting them out, it’s around our value system and why that week before they actually met one of the values and did something well.
And so, you want to be on the shout-out list every Monday as part of that little competitive thing that’s going on. And it’s just working, it’s really fun, it’s magical. I think people enjoy working here, we enjoy being with each other. Right now with COVID, that’s one of our hard things is that people are out quite a bit because of different things. We’re trying to be extremely respectful. We’re 100% vaccinated and I only know of one person in the firm who hasn’t even gotten her booster. But believe in that kind of thing, we wear our masks, and we’re trying to be respectful for our client base also. So, this has made it a little bit more difficult because we really enjoy being in the same office space together but we are working a lot more remotely right now. Or staccato, some people would be in the office and other people remote going on just to deal with this COVID stuff that’s reared its head again. But it works when you got the right people. When you got those A players, it works.
What Surprised Kyra Throughout Her Journey [1:04:23]
Michael: So, what surprised you the most about building the advisory business as you’ve gone through this journey for 30-odd years?
Kyra: How good it feels. When you’re talking about what surprises me the most, it’s so awesome and I think as you’re bringing along another financial planner who wants to be a financial planner and they come to you and go, “I felt it, I was interacting with a client today and they asked me questions, and I can actually go and give them some direction or some advice that I felt really helped them.” And it feels so good to be able to offer something back that supports somebody else’s life, that helps their life be better, helps them make decisions that hopefully will blossom into something else as they go along in their lives. It’s a good avocation and profession to be in that really helps others. And I knew it in the beginning, or at least I thought I knew it, but living it for my whole life now, or at least since I was 28, 29 years old, has been just an awesome thing to see happen. The development of the IT world. When I first got started and if you were trying to manage money, you were doing it on paper and going to all the no-load mutual funds and trying to pull it together and developing your own spreadsheets. And then Schwab showed up and created the platform where you could work for them and now you’ve got several platforms. So, the IT world has been fascinating, that allows us to do more things better to help people. And so, I think leveraging IT is another really fascinating thing that has shown up that’s really helped us.
Michael: Yeah, it is, to me, an interesting dynamic that we’ve had the internet and the digital world long enough now that a lot of folks aren’t aware. If you really go back 30 years ago, there literally were no custodial platforms. like Schwab hadn’t launched yet because Advisor Services launched 29 years ago. And so, if you wanted to do this, your clients would directly hold accounts at no-load mutual fund companies and you would have to call companies on behalf of each client one at a time to get the trade done or to get a transaction done, depending on the company, you may have to do that with the client on the line.
Kyra: Or right there, right, right.
Michael: Or right there because you weren’t conference calling. So, when the client was in the room, you would do the phone call with them on the line and they would say, “Okay, can you put the client on the phone now?” And then the client would give the authorization and then you take the phone back and…like at each client at each trade. So, yeah, the technology has scaled the advice business, particularly the AUM business in a lot of really interesting ways.
Kyra: And I’ve got one other thing that I think has really made a difference to me being in this profession this long, is the whole aging process and how now I’m 64 years old and have hit a stage of my life that I’m going…people always talk about it and how you get to this stage and you start really recognizing, “How much longer am I really going to be doing this? How much longer do I have? What are my resources? What do I really want to see happen for the rest of my life?” And so, it’s made me less afraid of the aging process because we’ve had clients that have stepped in and changed their lives in their 60s, gone completely different routes, and said, “I’m going to do this now at age 60,” and do something totally different than what they’ve grown to that point. We have clients…I had a woman walk in one day dancing and I’m going, “Ms. Lucille, what you’re doing?” She goes, “Life begins at 80.” And you just have…your fear of the aging process is lessened because you see the vitality and the wisdom.
There really is a truth in that wisdom does come and develops with age more and more and more. And so, interacting with my clients that have gotten older and using them to help me understand the wisdom of the aging process or to really learn from the things that happen in the aging process. That’s been awesome. So, we’ve actually developed a whole aging platform and now that we do…when you’re doing your annual review, it’s not about, “Are you going to be financially independent to be able to live through your retirement?” Our clients are pretty much able to live through their retirement. Yes, we may tweak the portfolio here and there and we may have discussions about gifting and how they’re going to do certain things or when they’re going to take their RMDs or stuff like that. But we’ve now developed a really fun process of talking to people about writing their story and being in charge of the denouement of their story.
And so, we’ve developed a whole process of interacting with clients around this part of their lives. And through the Whealthcare system, which has a lot of very medical-oriented questions and long-term care-oriented questions, we use that process and doing the discussion. I got from someplace else, legacy living, in which we don’t talk about legacy as only what you leave behind but how do you live your legacy every day, especially as you’re in the…we started at age 60 and on, that helped people really recognize that this part of their life is just as important and how much value can they bring to the table as they’re going forward in this part of their life. And so, that’s been really fun too. And now I’m there and now I’m talking…not only talking the talk, I’m writing my own story and helping my clients by sharing my story with them as they’re sharing their stories with me about this stage of our lives and what the aging process means and how finances play a role in it.
The Low Point On Kyra’s Journey [1:09:53]
Michael: So, what was the low point for you on this journey?
Kyra: Oh, 2008, end of 2008, early 2009. I rode through the early 2000s, I was too young and naive to even be fearful during that time period and I was…so that affected me, but it wasn’t…I don’t know, it just wasn’t as bad, this extreme downturn of the total crash. So, early 2000s, you had certain asset classes that were substantially outperforming other asset classes and learning about that kind of kept you going, “Okay, I’m adding value, we’re going to put small-cap value in people’s portfolios.” Well, small-cap value didn’t bail you out in 2008, bonds didn’t bail you out in 2008. It’s like the whole world seemed to be coming to an end, and so it’s a very anxious time and I was anxious. And yet, my client base and my staff were leaning on me to help them through this really horrific, beautiful time period.
And so, that was…I remember being in Boston in October, I think it was October 2008, watching the market drop like crazy below…at that time, 10,000 was a high or something and it was like, “Okay, we just hit 10,000, are we going to break-through 9,000?” I think on that day, we broke through 9000 before I caught a plane leaving Boston, the annual conference I think it was in Boston that year, for FPA. It was a really bizarre, strange, fearful time to work through for myself as a person, and then realize that I had built something that I needed to be there and be strong for other people when it was hard to be strong for myself.
Michael: So, just what do you do in that moment? How do you cope with that?
Kyra: I exercise and meditate. I do a little bit of, “Okay, let me meditate,” I have a meditation or a quiet practice in the morning. I also have a Christian belief, and so that plays a big role in it. But then just to really get by day by day, I start off my morning with a meditative prayer time, and then I found I could get rid of all thoughts if I go and run 10 miles, it’s like, “Okay, I’m not thinking about anything now except I need a nap,” type of thing. So, exercise, I’m a fourth-degree black belt also and I still do…I want to do one last…my joints are still in good shape and I want to keep them in good shape, so I’m going to do one last half marathon before I’m 60…well, when I’m 65. I’ll just turn 65, I’ll finish my last half marathon. So, I do that kind of stuff to kind of help me just kind of clear my brain and look at other things.
Michael: So, is that something you started doing in the moment of the stress? Well, obviously, not becoming a fourth-degree black belt, that’s taking a while. When this financial crisis happen, you said, “I need to find a better balance, so I’m going to start meditating,” or was this already something you did as a habit?
Kyra: I’ve already been meditating before then, I just recognized the value that it brought to the table. It was like I did it before and it was just kind of, “Well, here is something fun to do and I’m doing this for fun.” And then I recognize, “Okay, it’s not only fun to do, it is healthy to do and it’s really helping me be the best I can be during this time period in which nobody knows the answers.” Nobody has how quickly things are going to recover or whether our system…instead of austerity, we chose stimulus to get through it and you’re watching the European countries and everything go austerity. It’s like, “What’s the right answer?” We didn’t know at the time. But it helped me just kind of put things aside. I would read things from other people talking about focusing on the things that do bring you joy, and I share those kinds of things with my clients, that really you can still…we live on the beach or we live on a beach community, so you can still go on a walk on the beach and really be there with somebody, walk your dog or walk with a loved one or something and then just enjoy the moments that life brings in balance. So, I focused on those kinds of things and tried to help my clients look at those kinds of things also.
Advice Kyra Would Give Her Former Self [1:13:45]
Michael: So, what do you know now about running and building an advice business that you wish you could go back and tell you from 20 or 30 years ago?
Kyra: One, not to be afraid of letting the B players go. I think that was one of the things that I…for a long time, I was in that same quandary that you were talking about, “No, these B players are getting the work done and they show up and they’re okay.” I had this one gal work for me for 10 years. It wasn’t until after she left that I recognized I was walking on eggshells around her, I wasn’t really able to be me and to be the best me and she really wasn’t an A player for our firm. She’s a great person and has gone on to do great things but for our firm, she wasn’t the right person and I should have recognized that earlier when I knew I was walking on eggshells around her, I just didn’t deal with it until after she was gone and then the reality really struck.
And so, getting a good team, getting a good staff that works well with you as an owner and with each other. And people say, “Well, is it skill sets and is it personality? If you don’t have the right personality, then they’ll never work and you can train skills.” I’ve had both. That one time I was telling you about when I had the two people that weren’t good fits. Well, one had great skill sets but a really great team personality. The other one had an awesome personality, really made you feel good when he walked in the room, he was funny, he was lively. He had no skill sets and we worked with him for four years to try and train him. I should have recognized that a long time before…I call him my $300,000 mistakes or my half-million dollar mistakes for keeping him around too long and then you’re still starting over and stuff. And so, recognizing that building a team…
Michael: It does frame it differently when you start adding up four years of salary and say like, “That was my $400,000 mistake.”
Kyra: Exactly, exactly. When you’re looking at it and it’s like…and you can try, you’ll listen to Collins and he’s talking about moving them to different seats on the bus, you can try moving them to the different seats on the bus. But if you’re really churning about somebody, I haven’t even really found that different seat on the bus work. If they came on to be on your bus on a certain seat, moving them around, I have not found that work. So, not being afraid to get the right team in place that is a team that’s knocking it down the park, that you’ve got A players, that you are so proud of your A players. Don’t be afraid to do that because it’s miraculous, fun, and it’s wondrous what can happen when you’ve got that kind of team in place that makes it even better. Not being afraid of technology, really using technology, outsourcing. Two of the things that we’ve done, outsourcing compliance and marketing, have really helped leverage a lot of our other stuff. Now, we interact with them but we’re not doing the marketing or doing the compliance. We’ve got a phenomenal compliance firm and a good marketing firm.
Michael: And who have you outsourced to that you’ve been happy with? Who does the compliance and marketing?
Kyra: Fairview, I think they’ve got a whole name. We got a guy on inside who interacts with them regularly, so he’s our chief compliance officer in the firm. It’s Fairview something.
Michael: Fairview Invest, they confer compliance consulting.
Kyra: Yeah, they are so good. And we had an audit…well, they don’t call it audit, they call it examination, I guess it’s what the SEC does, but they came in two years ago. Two of the Fairview people came and worked with us throughout the whole audit. Before the audit, they did interviews with us so they were pretending to be SEC people taking us through to help us learn how to interact and interview.
Michael: They called it mock audit process.
Kyra: Yeah, it was so good. Although, you’re not going to get away with absolutely no mentions and we had a couple of mentions of things we needed to improve upon, but it was actually not a bad experience and they’re the ones that helped make it not a bad experience. And so, I just rave about them. Even though they’re not cheap, I don’t have to worry about what’s the new laws that are coming out and how do we comply with this, they pretty much tell us. But even when I’m writing about, “Happy New Year, what are your goals and dreams for this next year?” and it’s not about the market, I’m still supposed to run it through. But anyway, they’re good. They’re thorough and they are…in that way, they’re a little bit of a pain in the neck but they’re good and they’re thorough.
Michael: But that is what the compliance folks are supposed to do, they actually have a culture of compliance.
Michael: And then who are you using for marketing?
Kyra: We’ve got a local group called The Design Group that’s really helped us with overall marketing. And we have monthly interactions with them as we’re writing stuff or looking at what kind of activity is happening on our website, what are our Google Ads doing for us, and different things. And that’s been playful and fun just to learn about because that was something I knew about but until we actually started doing it…we’ve tried doing it in-house and that was painful. We’re hiring somebody that could do it in-house but we also asked them to do other client service work. So, outsourcing that has been wonderful and it cost me a third of what it cost me to have the person that I was hiring to do it.
How Kyra Establishes And Maintains Operational Workflows [1:18:37]
Michael: And so, for those who are listening who are wondering…so, this is episode 270, so if you go to kitces.com/270, we’ll have links out for Fairview Invest and Design Group and the others if you want to dig in further for some of the companies that have been mentioned in the discussion here. So, Kyra, I’m wondering just for being as established as you are into the practice and a routine, what does a typical week look like for you at this point?
Kyra: Mondays are staff day, Monday morning is pretty much no clients, we have staff meeting, we review the prior week’s activities, the next four weeks’ activities, who’s out of office because when you’re not tracking paid time off, you have to balance how many people are going to be off at different times. And so, we go through the next month with paid time off.
Michael: And just to ask quickly, why aren’t you tracking paid time off?
Kyra: Because we hire people that want to be here and want to get their work done, and we’re not going to worry about whether they’re getting time off or not as long as they’re getting their work done. So, we’ve adopted that kind of philosophy that we hire people who are adults, who are competent, who are a fit, it’s the intent upon hiring them, and we treat them that way and give them the respect to manage their own lives to create that life balance. And so, that’s why we do that. But we still have to be responsible.
Michael: So, you are still measuring whether the stuff is getting done, the work is getting done, are you having the client meetings? Are you getting the plans done? Did you do the trading paperwork or whatever it is?
Kyra: That’s the focus, that’s the focus, and we look at it and…my calendar is color-coded, so you can pull up my calendar and see how many client-facing activities I’ve got going on in a week or outside appointments or meetings that aren’t client-facing but that I consider important business meetings. So, you can look at it and see just how I handle the whole day. At this stage, I usually will have…this week, I’ve got three client-facing meetings in which we’re doing some client-facing stuff to the client and pretty intense phone calls going on and this kind of thing in which I’m interacting with you. Also, I’ve stepped in the chair of the local Chamber of Commerce for this year and to me, that’s a very important role. I love my Charleston community and so I’m stepping in, so a large part of my time this year will be taken up and interacting with the Chamber of Commerce and the different things we’ve got going on. Charleston is a hot community in major growth modes with a lot of stuff going on and happening here as a whole community. So, it’s fun to kind of transitioning my individual financial planning mode into my financial planning and growth mode for our community. So, that has taken up a lot of time. I’ve got a guy working with me today, I’ll be interacting with him to just where is he, how far along is he along with the projects I’ve asked him to help me with. And so, plugging in and talking with other people and that’s a big part of my week also.
Michael: So, it sounds like structurally, Mondays are kind of set for staff days, team meetings, getting oriented and stuff. And just the rest of the week then is the ongoing mishmash of client meetings and phone calls and external meetings and volunteering in the community.
Kyra: Except for Friday afternoon.
Kyra: Friday afternoon is also…our investment team has its own private meeting. I’ve got one staff person that during COVID, we learned that she’s awesome working remotely, husband is in the military. So, she now lives in Seattle although she’s a lead planner for several clients, and developing more and more lead planners. We’re even prospecting over Zoom and she’s getting new clients using Zoom. So, I interact…she’s direct report with me, and so we have a sacred time on Friday afternoons so that she and I get a one-on-one every Friday afternoon just to make sure she stays feeling good about being part of the team. So, Friday afternoons are kind of…we start off Monday morning pulling everybody together, looking at the week ahead, and then Friday afternoon, trying to look at specifics as to where we’re going. And then I usually try and reserve 3:00 to 5:00 as my own time to get organized and do my own reviews just personally.
Kyra’s Advice For Newer, Younger Advisors [1:22:37]
Michael: So, what advice would you give younger and newer advisors looking to become a financial planner and get started in the industry today?
Kyra: It depends on if you’ve got the ability to do it on your own, no matter what, it’s an uphill battle from the beginning and trying to do it all yourself and to figure it out all yourself. If you can, try and find a firm that has your own value system that you can go and be part of, that you can learn from, and that you can grow with and that you can add value within that firm, and that’s a great way to try and get started. If you’re looking to get started, Caleb Brown’s group will help connect you with a good firm. And so, just figuring out how you’re going to get started and then determining do you really want to do the client-facing full financial planning? Are you really interested in investments? What is it you’re really trying to add value because they’re all part of the whole financial planning picture and they can all add value?
What Kyra Has Planned For The Future [1:23:35]
Michael: So, what comes next for you?
Kyra: What comes next for me? My denouement, my story. I have gotten very involved in my Charleston community and I love the discussion we’ve been having recently. It makes me sad but I still enjoy it with the diversity, equity, and inclusion, looking at trying to…minority businesses, helping minority businesses. I’m a real believer in business and yes, I’m a capitalist, so I believe businesses are where we can create economic foundations and really raise other communities or raise underprivileged communities to become more privileged. So, I’ve actually bought up a block of land in a city called Hanahan, South Carolina, in which I am now looking to develop this block of land. Most of the land is empty, I’ve got one building on my block that I’m using as a base. The city is looking at creating density and I’m going to go create a…one of the terms is a well community, W-E-L-L, or a community of wellness.
So, I’m looking to try and create a mixed-use community that I’ll be part of, in which I will help seed entrepreneurial, minority-run businesses to get started in this area. My themes are food, music, and art. And that’s my next piece is developing this little community and putting in place and trying to help other small businesses get started and looking at…this is an area that’s going to gentrify. And I’m not against gentrification, but I really would like to see all ships rise with the tide. And so, helping the locals in this community to try and be part of the economic that’s coming to this community, and therefore, establishing businesses to get them started. It hadn’t happened yet. It’s going to happen because of some rapid transit or some mass transit that’s coming through the community that’s going to give access more to this community. So, anyway, that’s my next life and it’s extremely exciting.
What Success Means To Kyra [1:25:29]
Michael: Wow. Very cool. Very cool. So, as we wrap up, this is a podcast about success and just one of the themes that comes up is the word success means very different things to different people. And so, as you’ve been on this track of building what anyone would objectively call a very successful business for the advisory firm, I’m wondering how do you define success for yourself at this point?
Kyra: Early on, another planner talked with me, and this was back in the ’80s, about you’ve got to understand what is enough. And that’s a hard one. As you’re growing and you’re getting into it, it’s like, “What is enough?” You haven’t really…you don’t really know it yet because you’re not there. Well, I now know it and then I found that I have enough, that I’ve got three sons that have grown into wonderful people, I’ve got grandchildren, I’ve got a husband that I’ve been married to for 40 years, he calls me his favorite wife. And I have business that I’ve grown since 1983, from something that people were asking me in the beginning, “What are you running, a charity or a business?” And now that’s a very successful and recognized business in our community.
And I’ve got a staff that I love that’s an awesome staff and I enjoy working with and wanting to see the growth of all the people I work with. So, I’m overflowing with enough. And so, looking at that, it’s like I’ve identified what’s enough. If I don’t succeed…I’ve told you about this new venture I’m into, this new venture is something I’m energized about, I’m excited about. If it doesn’t happen or I don’t really get to do it, it’s not going to be the end of me. But I’m not going to give up trying to do this at this stage because I’ve got a lot of energy around it, but it’s not going to make or break my sense of success. If it does turn into something really good, it’ll add to the overflowing-ness, but if it flops, I’ll just, “Okay, learn again.” So, understanding what is enough and identifying that for yourself. I’m also a foodie and my children tell me I can’t tell people I’m a wino because that doesn’t sound good, so I’m a wine yes, not a wine no.
So, learning more about wine and travel and stuff are the other things that I just enjoy doing, so having enough time to balance and be able to travel. I now have a granddaughter who says, “Kiki,” that’s my grandmother’s name, “You know you’re supposed to take me everywhere in the world,” so I’ve got a companion for a while to travel with once we get back to traveling. So, those are the things that are really meaningful to me now is the ongoing foundation of the firm, the ongoing love and support from my family and my friends. Another sense of success is I was getting off the ICFP Board before FBA got started. I just started the residency program and that’s another thing that…it’s still going on every year, the residency program. This next year, we’re having…well, again, we’ll see what happens with COVID but we were trying to do two residencies. They were sold out the last couple of times we’ve been doing it, and that’s been another thing that helps other young people learn more about how to be, not how to do, but how to be a financial planner. And so, that’s given me a sense of success and fulfillment. So, I could go on, it’s just being filled with joy and understanding what brings you your own joy.
Michael: I love it. I love it. Well, thank you, Kyra, so much for joining us on the “Financial Advisor Success” podcast.
Kyra: Well, thank you, Michael. You don’t know how much this means to mean for you to reach out to my small firm that’s not shooting for the stars, but we are amongst the stars. So, thank you so much.
Michael: Absolutely. Thank you.