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Pursuing Intrapreneurship As A Path To Growth Within A Firm

Executive Summary

Welcome back to the 286th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Matt Cosgriff. Matt is the Director of Wealth Management for BerganKDV, an independent RIA that operates as a division of a regional accounting firm based in Bloomington, Minnesota, and oversees more than $2 billion in assets for 1,000 client households.

What’s unique about Matt, though, was his path to launch and build a specialized division within the firm as an “intrapreneurship” opportunity to serve next-generation clients, and then how he leveraged that to create a career path for himself toward leadership of the entire $2B RIA.

In this episode, we talk in-depth about how, despite his young age and lack of CFP marks at the time, Matt was able to get the opportunity to operate not as an entrepreneur starting his own firm but as an intrapreneur inside of BerganKDV to develop and operate a separate brand that catered to next-generation clients, how even though Matt was given some autonomy to launch his division, he struggled with having to ‘side hustle’ within the firm by also supporting a new retirement plan practice and working with traditional smaller wealth management and retirement clients to justify his intrapreneur salary, and how Matt ultimately shifted his career focus toward a leadership path after he realized he enjoyed working more on developing and growing and scaling the business itself than his client-facing responsibilities.

We also talk about how Matt leveraged his intrapreneurship experience and his ‘side hustle’ of working with internal clients to become the Director of Wealth Management for his firm at just 29 years old, how, during his first year as a director, Matt dealt with a lack of trust and confidence from some staff and clients due to his young age while he was trying to create change (which did eventually lead to a few of their departures), and how going through the Schwab Executive Leadership program helped Matt refocus and create space to be more strategic and drive growth for the firm.

And be certain to listen to the end, where Matt shares how he learned in hindsight the importance of being clear about what is realistic and managing expectations upfront to give room to celebrate wins later, why Matt believes that connecting with other professionals in the financial industry, being persistent, and staying curious are the keys to creating a path to a great career, and how Matt has managed to avoid getting stuck on the ups and downs along the way and keep his focus on enjoying his journey.

So whether you’re interested in learning about how Matt’s initial experience as a founder taught him to start small, build interest, then scale, how he uses Entrepreneurial Operating Systems (EOS) to break beyond the day-to-day grind and keep everyone focused on long-term growth, or why persistence is key in building connections (and finding prospects!), then we hope you enjoy this episode of the Financial Advisor Success podcast, with Matt Cosgriff.

Michael Kitces

Author: Michael Kitces

Team Kitces

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

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

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Full Transcript:

Michael: Welcome, Matt Cosgriff, to the “Financial Advisor Success Podcast.”

Matt: It’s great to be here, Michael. It’s funny, I remember probably a decade ago stumbling across the blog the first time and thinking I just struck gold coming to for the first time. So, it’s an honor and a privilege and I’m excited to be chatting with you here today.

Michael: Well, awesome. Well, I’m excited to have you on as well. You’ve actually done a couple of guest posts with us on the blog over the years, including one that you had done several years ago that I was kind of excited to come back to, I feel like it’s sort of a theme for this podcast episode now to have you on you. You had done this article about what you had framed as intrapreneurship. So, the industry and I guess just the business world in general likes to talk a lot about entrepreneurship, this idea of being a risk-taker that goes out into the world and creates this new business thing, and hopefully, someone in the consuming public will like it and then you’ve got a business that you can begin to grow and build.

And there’s a lot of discussion around entrepreneurship and sort of the nature of it, which I feel like at least how it gets framed is a lot of sort of like taking blind leaps into the wilderness. It’s very isolating, it’s very alone because you just kind of go out there and make this thing, and when you’re getting started, it’s literally on you. And you had put forth this idea that I really had not heard before you had reached out about it years ago that, “Well, hey, there’s this entrepreneurship thing where you do that externally into the world but there’s also this thing called intrapreneurship, where you try to do that similar kind of sort of risk-taking innovation effort, but you’re not doing it out in a brand new business from scratch, you’re doing it within an existing business, within an existing organization,” which has a whole other set of challenges of like, “Well, this is the way we’ve always done it here,” and like, “These are existing systems,” and sometimes the existing systems don’t map well onto the new thing that we’re trying to do.

And so, at that time, I think you were working on an intrapreneurship opportunity around building out a service model for next-gen clients and doing it within a larger established firm as opposed to hanging your shingle. And so, I guess, A, I’ll be curious to hear the update of kind of how that went over the past six or seven years since you had started working on it. But more generally, just I love this idea and framing of what does it mean to be an intrapreneur? Or what does it mean to be someone who wants to take some of those risks and has innovative ideas and wants to do something new and different, but is trying to do that within an existing organization as opposed to saying, “I’m going to just go hang my shingle and do this from scratch?”

Matt: Yeah, it’s certainly not a term that I can take credit for. I think it came about in the ’80s, the actual term intrapreneurship. But I was super fortunate, I started my career at a small IRA, and actually had kind of gotten the itch to try to start something on my own, much to kind of track with what XYPN had done at the time in the launch and Sophia Bera, I think, had written an article on your blog, “How to start an RIA for less than $10,000,” I think was close to what the title was. And so, I had an itch to kind of step out on my own and try to do something similar. The challenge I ran into at the time was I was, I think, 24, 25. I hadn’t quite passed the CFP yet, and so maybe didn’t have sort of the experience or the track record to, at least in my mind, make that completely viable.

And so, I was really fortunate to stumble across an organization, it was called KDV at the time, that had a desire to cater to that young professional, kind of that next-generation client at the time, and build something out. But they, as they sort of looked into the proverbial mirror, didn’t necessarily have somebody internally that could do that, and so I was really lucky to be able to join them and kind of operate as an entrepreneur inside an organization, as you noted. And certainly, a different host of challenges that come with that but I was fortunate at that age to have a salary and have quite a bit of autonomy.

How Matt Began His Relationship With KDV [07:01]

Michael: So, help us understand a little further just what this looked like. So, I guess what was KDV at the time that you arrived? What was this firm or business you were coming into where they were saying, “Hey, we want you to build this new thing within our existing firm?”

Matt: Yeah, yeah. So, KDV actually dates back to the 1940s. It started as a real small-town CPA firm up in St. Cloud, Minnesota. Fast forward to, I think, it was 2014 when I joined, and it was really kind of beginning to be a sort of a burgeoning regional accounting firm. And in 2000, they had launched a wealth management practice that when I joined was about probably 15 or so people. And so, total employees at the organization was about 150 employees, maybe just shy of that, across technology, tax, audits, consulting, and then obviously, I joined the wealth management group that was highly integrated with the tax firm. It was probably about $1 billion dollars in assets at that time. And when I joined, I really had the opportunity to operate…not entirely independently but with quite a bit of autonomy to build out the service model, the tech stack, etc., to try to really build an engine to cater to young professionals.

Michael: So, you arrived, there’s this existing regional accounting firm, I guess, that’s just doing all the things accounting firms do, so like tax and audit work and small business accounting, all that kind of stuff?

Matt: Exactly. Yep, exactly.

Michael: So, they’re doing that, they had a wealth management division within it from back in the 2000s, which is very common. There was kind of this surge of CPA firms in the early to mid-2000s of adding RIA divisions and offering wealth management under the umbrella of the existing accounting firms because they did that back then as well. So, I think you’ve said like 15 people in wealth management when you got there, but 150-plus total employees. So, it’s like 10% of the firm, right? I’m just sort of visualizing that, like a sizable division, billion dollars of AUM, which is a very healthy advisory firm. But relative to the accounting firm, that was still like… this billion-dollar wealth management thing is only 10% of our… at least by headcount, of our much larger regional accounting firm, like that was the environments that you were coming into.

Matt: Correct, and I would say the headcount and I’d probably say revenue was probably similar just in terms of tracking with the firm, probably about 10% of revenue as well.

Michael: Okay. So, you’re getting brought into this environment, and so how did this come about that suddenly, you’re talking to this firm about creating an advisory solution for next-generation clients? Did you find them? Did they find you? Was this happenstance of a networking meeting? How does this opportunity come about for you when you’re otherwise…I guess you’d said at the time, just a few years in, not ready to start on your own, don’t have your CFP marks yet, but trying to try to figure out what’s next for you?

Matt: Yeah, it’s a great question. It’s funny, I’m sure you are familiar and I’m sure listeners are familiar. Steve Jobs had given a commencement speech back in, I want to say maybe 2005 to I think at Stanford, and he talked about you really can’t connect the dots looking forward, you can only kind of connect them looking backwards. And at the time, the first time I saw it, that maybe didn’t make a ton of sense, I was probably still in college at the time. And so, to your question, how did I get connected there? It’s funny, I bumped into and met an individual that was kind of leading the sales side of the retirement planning consulting group at KDV, and this was maybe a year or two before I was even looking. And when I kind of stepped out on my own—I actually did step out on my own to try to start something but was kind of interviewing on the side just to kind of keep doors open.

And he heard that I was looking, and we ended up having coffee and kind of said, “Hey, this is what I’m passionate about, I want to try to serve next-gen clients, I’ve got some experience and energy around the retirement planning consulting world and then I’ve always enjoyed just sort of the practice management and leadership side as well.” And he basically said, “Why don’t you come and build it for us?” And I said, “That sounds amazing, you mean you’re going to give me a salary to basically be an entrepreneur inside of an organization with resources and give me some autonomy?” And the answer was, “Yes.” And I haven’t really looked back since. It’s been about eight years and it’s been a really fun…fun albeit tons of challenges along the way.

Michael: So, I guess just help me understand a little more how this comes about. The number of people I’m imagining who are listening who are like, “I’d like a salary to launch my own thing from scratch.” How exactly does that happen? How did that come about?

Matt: Yeah, and I think to be clear, I didn’t just have 40 or 50 hours a week each week that I got to just sort of build this in a vacuum, right? I had to sort of almost internally side hustle. I know that’s a common phrase that’s thrown out when people are launching their own firm independently who’s maybe doing a side hustle just to get some money or revenue in the door to put food on the table and support your family. And so, I had to do that internally by doing a couple of things. I was able to kind of help on the new business development or sales side for their retirement plan practice and then I was also working with just some traditional smaller wealth management clients and then kind of traditional smaller retirement plans as well. So, I didn’t have 40 or 50 hours a week just to solely be an intrapreneur, although I would certainly have loved that. I did have to sort of pay my way through it, if you will, in terms of adding value, which was good. It gave me an opportunity to continue to grow in a lot of areas and I think broaden my skill set, which came back to hopefully help me down the road.

Michael: Interesting. So, I think that’s powerful framing, so they didn’t quite go so far as to just say like, “Here’s the salary, go make this thing from scratch, let us know in a year or two how it’s going.” This was like, “Hey, there’s some things that you can be doing in the firm that we’d like you to be supporting on now, like take some of the smaller wealth management clients, take some of the smaller retirement plans, support our team doing some of the sales calls and business development for retirement plans, but we recognize that’s not going to take your full-time job. And so, sort of by design, that’s part of your time, at least it helps to cover your salary for some of the work you’re doing around here. We know it will have extra time for you as well and with the extra time, Matt, go start getting this next-generation client thing launched.”

Matt: Correct. Yep, exactly. Exactly.

Michael: So, can I ask what was the salary? What were they willing to pay you to build this and start doing it from scratch?

Matt: That’s a great question. So, it was eight years ago, I want to say it was maybe like $50 grand. I remember coming out of college and being $10,000 or $15,000 less than that, that was 10 or 11 years ago and you hopefully brought in some new business, which as a 22-year-old, I think everybody listening can appreciate that that’s darn near impossible when you’ve got certain minimums. So, yeah, I want to say it was like $50 grand and, again, that’s $50,000 more than anybody that’s out starting their own firm. So, at the time, that was…

Michael: Yeah, 10 years ago, a couple of years of experience, that was a good number. It is interesting, salaries, even starting salaries for students now, on the new planner recruiting side where we’re placing a lot of rising college students, we’re seeing folks that are getting placed in the mid-50s or even the low 60s sometimes with financial planning education, no marks yet, little or no experience yet, because there’s just such a talent shortage now. But 10 years ago, that was a sweet salary for getting going and being able to start building a building a thing you want to build and not have to just do it from zero from scratch.

Matt: Yeah, yeah, I was super fortunate. And again, it’s just one of those things, sometimes it’s just locked in. I still think back to that day, I met the gentleman, his name was Gary Bolgasser at a Wild game. And I almost didn’t go to the game and likely wouldn’t be where I’m at today if that didn’t happen, so…

Michael: Interesting. But I think it’s notable as well, you weren’t getting brought in with a six-figure salary to go build this big thing or to be getting a whole pile of clients while you’re building it. This was a moderate salary to go start getting something started from scratch, right?

Matt: Correct.

Michael: I can just envision the firm is trying to balance this as well like, “Well, we need someone to handle some of these smaller wealth management clients and do some of these smaller retirement plans and it costs a certain amount for the firm just to get anyone to be able to handle those. So, if Matt can handle these, he’s more or less covering the salary and then if he can go build something with his additional time, then, hey, we’re all with it.”

Matt: And I think the other thing I would say too is…and I think about this just in hindsight, is just the amount that I learned through that process, sort of building and running a…albeit very small, right? We’re not talking hundreds of thousands of dollars of revenue. But building sort of a small practice in a low-risk environment. If a client left, we’re talking $2,000 bucks or $2,500 bucks or something like that. And so, I know, looking back, the amount of stuff I learned to do, whether it be with technology or strategy or new business was invaluable. And so, I think that part was probably the most valuable part of the entire initiative probably unequivocally.

Lessons From Building A Next-Gen Subscription Base As Lifewise’s Founder [16:44]

Michael: So, talk to us about the next-generation effort, thing, offering that you built? What did you actually do? What did you create? What did you launch and put out there? How did it work?

Matt: Yeah, so I was very fortunate to have a lot of autonomy. We actually created a separate brand that was Lifewise. And the website is still out there, it’s, we candidly haven’t updated it in quite some time. But I had the opportunity to build out an entirely different technology stack. The firm was using Junxure, I was able to get a Salesforce license, and I think we were using MoneyGuidePro at the time. I actually got eMoney and use that, which inevitably was kind of a beta test of it and then we ended up shifting over to eMoney.

So, again, kind of another valuable aspect of it was just the ability to test different technology in, again, kind of a low-risk environment. But yeah, it was an entirely separate business line, which makes it sound a lot fancier than it was, in a sense, and had a lot of autonomy to test different things, which again, I think we’re able to take some of those learnings and apply them to our practice.

Michael: So, I’m curious about a bunch of those choices. So, first, why Lifewise as a separate brand as opposed to…you’ve got KDV, it’s already known in your local marketplace because you are a known regional accounting firm at the time. Why the separate brands?

Matt: Yeah, that’s a good question. I think, it’s candidly, it’s probably something in hindsight, we would have done differently. So, we felt at the time that it was important to communicate to a different market segment, in this case, young professionals, and that we felt like the existing brand, KDV, really spoke to more traditional business owners, retirees. And so, we felt to really speak sort of genuinely to that audience, we needed a separate brand, a separate website that could speak to the pain points and issues and opportunities that that demographic was sharing.

And so, I think you can make a good argument probably on both sides of that. I think, in hindsight, we would have probably just started…for those that are, I’m sure, familiar with Eric Ries’s book, “The Lean Startup,” more just sort of let’s build a prototype or a minimum viable product is what he talks about. And that could be something as simple as a brochure on KDV letterhead and just go try to sort of test that, as opposed to putting all the energy behind perfecting this website and the separate brand because it does require additional resources, as you know, to build a separate brand. So, that’s something I think we might have done differently or at least not done right away.

Michael: Because I’m taking that at the end, you kind of figure it out, “Oh, I think they actually would have been fine with the KDV brand, maybe we didn’t need the separate Lifewise brand after all?”

Matt: I think so, yeah. Again, the brand…certainly, KDV is not a household name like Schwab or Fidelity but it had enough brand power, particularly in our St. Cloud market, and at least enough in Minneapolis. And ultimately, the other thing too is that so many of the clients, at least that we thought we were going to get, came through the existing internal channels. So, they already had some familiarity, whether a parent was working with the tax side or they were doing their 1040 or something like that. So we, in hindsight, didn’t again think that having a separate brand was probably as necessary, or at least it wasn’t necessary upfront to kind of get it off the ground.

Michael: Interesting. Well, I like that you mentioned Eric Ries’s “Lean Startup,” sort of approach and actual books. So, for anyone who’s listening, I’ll actually add a link for it out in the show notes. So, this is episode 286, so if you go to, we’ll have a link out to Eric Ries’s “Lean Startup.” But I remember reading “Lean Startup” a couple of years ago, and the whole point to the book, in essence, is most of us when we’re trying to build and create and innovate something new, we overkill, we build way more than we needed to build to really do the test. And the only real test is just like, “If I make this new thing, does anybody in the world care enough that they’ll show up with money and buy my product or service?”

And so, we tend to try to make this beautiful, fully formulated thing and it has to be perfect in our eyes as the founder before we get it going. And the whole focus of “Lean Startup” is like, “No, no, that just ends up making a really expensive, slower to grow innovation effort or new business effort. If you really want to do this, get down to the absolute minimum that you need just to do the test of what you’re trying to figure out.” And one of the strategies even that they advocate is like if you want to know whether a potential new product or service might be compelling in the marketplace, launch it before you even have the offering yet. Make a page that says, “Here’s what we’re going to be doing, here’s what it’s going to cost, if you’re interested, sign up for this waiting list.”

And if no one signs up for the waiting list, you probably don’t need to bother to build it because apparently, no one is that interested. If you put it out there and you say, “Here’s what we’re going to be doing, here’s what it’s going to cost, and here’s what the offer is,” and people get super excited, then put the money and effort and time and resources towards building it. So, I’m struck by that, I guess, in the context of what you’re saying here, Matt, that in retrospect, we could have just made a brochure of what the offering would look like under the KDV brand. Just go out and tell people like, “Here’s what we’re working on and here’s what we’re planning to do,” and if no one likes it or they’re not interested or they’re having trouble with the KDV brand, then maybe you go make a separate one. But if everybody turns out just to be fine with it under KDV, then you didn’t have to build a whole website and structure all the rest, it just cost you a brochure or a one-pager that you had to make to start talking about it to see if anybody cares.

Matt: Yeah, and it was probably one of the biggest learnings I had in the process, Michael. I look back and just think I spent so much time trying to perfect sort of the proverbial mousetrap and I spent not anywhere near a sufficient amount of time trying to figure out how to grow it. And to the point, you got the best mousetrap in the world, but if nobody knows about it or is interested in buying it, it’s sort of a lot of effort for naught. And so, I know in the book, they actually…to your example, I think Dropbox actually created like a two-minute video and they just basically threw it online and, to your point, said, “Sign up if you’re interested,” and they got thousands and thousands of signups. And that was, if I recall correctly, kind of how they tested their product.

Michael: “Well, if that many people are interested, maybe we should build this now.”

Matt: Exactly.

Michael: And you still see some of this on places like Kickstarter, this is a popular strategy as well. “We’re going to put out an initiative for a thing, we haven’t actually built it yet, it’s just an idea.” But if enough people sign up for it, either, A, that validates the build, or B, you can even put a couple of dollars towards it, that if we build the thing, you get the first version that comes out, which essentially just means you’re pre-selling your idea before you even build it. So, if lots of people show up, you have the money and you go build it and sell it to them. And if no one shows up, all it costs you is the time to stand up the website…not even the website, the page that said, “Here’s what we’re planning to do,” to find out that people aren’t that into it and then you can move on faster to whatever the next idea is that maybe will carry better.

Matt: Exactly.

Michael: So, what was it that you built? Can you describe for us more what the actual Lifewise model or offering was at the end of the day?

Matt: Yeah, it wasn’t too dissimilar for many of the XY Planning firms and others that are kind of offering subscription-based planning to young professionals. So, I think we tried to…we tried a couple of things at the time, we thought we’re relatively innovative, that didn’t necessarily pan out. We offered like a free access to the eMoney dashboard so you could go to the website and sort of trying to almost steal a page out of the LinkedIn freemium model where, “Hey, sign up for this, if you’d like the technology and decide to upgrade to planning, that’s great.”

And then we also use, at the time, Betterment for advisors and their Robo platform and offered that. And then again, just kind of a traditional…well, I guess at the time, it wasn’t traditional, I think a lot of advisors were launching subscription-based pricing but increasingly becoming more of a traditional model, at least in terms of serving next generation. So, that was kind of the service model. Again, it was primarily the latter there. So, primarily, the subscription base, but we really never got it to scale.

Michael: So, where did you price it? What were you putting out there as the price point?

Matt: Yeah, so that was something, again, you had to learn the hard way. I think we started at $1500 bucks upfront and then maybe $100 to $150 a month. And again, what we found is that just inside of a larger organization, even if you get 100 of those clients, I’m just throwing a simple number, if that amounts to $300,000 or $400,000 in revenue, if you’re a stand-alone, that’s a lot of money because that becomes effectively your take-home pay after you cover some overhead and maybe one staff. Inside of an organization where we’ve got offices and infrastructure and shareholders that are expecting anywhere from probably 20 to 30-plus percent to the bottom line, it’s just the economics of it inside of a large organization we found just didn’t work as effectively as I think we’ve seen a lot of really great success in the independent space.

Michael: Interesting. So, this whole effect of, “Look, I can… I can get my… I can get my 100 clients at a… average of $3,000 of revenue per client is $300,000 of revenue, and I can have a really good take-home. In practice, I’ve seen advisors who are doing that, who are taking home upwards of 80-plus percent of that. Even if you have to hire out one team member to support, you’re probably still taking home north of 60% of that, which is $200,000-plus. But when you do that in a large firm, it’s like, “Well, Matt, here’s your allocation of the staff overhead and here’s your allocation of the technology systems cost and here’s your allocation of the rent, and the shareholders want to see their 20-plus percent profit margin all the way through that. Oh, and you got to get paid as well hopefully with what you’re doing.” It gets a little hard suddenly to do it at $3,000 revenue per client.

Matt: Yeah. And I think one of the other challenges we ran into, to that point, Michael, is—and you’ve written about this—if we think back, advisors were worried, or at least some were about robo-advisors sort of taking over. And I think, to your point, you talked a lot about it and this proved out in sort of our instance of Lifewise is that technology can scale service but it can’t scale necessarily customer acquisition. And so, one of the things that we ran into is it still took a lot of work to go find these people. And it’s one thing if you’re acquiring clients that are going to pay $10,000 or $15,000 or $20,000 a year into perpetuity.

If they’re going to pay $1,500 bucks upfront and then maybe only $1,000 bucks ongoing, there’s a lot of work on the front end. And so, that was another challenge we ran into. And even being inside of a larger organization that could refer clients, we found that a lot of the clients we’re working with on the tax side were not 32-year-old people that are launching a medical practice or a dental practice or something like that, they were 55-year-old business owners. And so, just the demographic that we were going after was not necessarily the demographic we had a ton internally.

Michael: So, notwithstanding what I know is often a popular discussion about wealth management and accounting firms, which is, “We have all these existing clients on the tax business and sometimes the small business accounting business that we can cross-refer over to wealth management,” not so much necessarily when you’re working with…when you’re trying to create a younger clientele, Gen X, Gen Y, sort of service model. Great when you want business owners with liquidity events heading into retirement maybe, but that was not the Lifewise focus.

Matt: Correct. And I think the other thing I would have done differently, and I know you pound the drum on this a lot and I agree with it, is we would have been more focused. We just sort of said, “young professionals,” which 25 to, I guess, 40 years old was tens of millions of people probably in the U.S. I think we would have gotten a lot more focused and tried to maybe just go after young dentists or something like that because we do have some of those niches on the tax side that it would probably be better aligned, and at least upfront, allowed us to focus limited marketing resources to that target segment.

Michael: So, the core of the offering of, “What do I get for my $1,500 upfront plus $150 a month?” So, assuming I got the eMoney financial plan upfront, I get ongoing access to the eMoney dashboard, so kind of like your private just for you with our firm. You’ve got access to Betterment platform, so low-cost diversified portfolios. What else was in there, or how were you layering ongoing meetings and ongoing service into this beyond the, “You’ve got access to your dashboard?”

Matt: Yeah, that’s where the service model probably neared quite a bit our traditional wealth management model. So, we talk a lot about our five pillars, which again, mirrored the CFP’s kind of five core disciplines: financial planning, investment management, tax planning, estate, and risk. And so, that was really what we focused on, but just focused on within sort of the framework or through the lens of a young professional. So, typically lended itself to two to three meetings a year, you alluded to, obviously, building out the financial plan upfront and then kind of updating that ongoing. So, that was really the service model. Again, it wasn’t too dissimilar from the traditional wealth management model.

Michael: So, it sounds ultimately you had some sort of challenges for fully scaling…and I want to come back to that in a moment, but just from the ability to execute that with a growing base of clients, I guess I’m just wondering how manageable was that? Was the technology enough that you were able to at least service the clients profitably under this model, or was it just a question of, “How do we get the volume of clients?” Or was it hard to even do the amount of service work that it took for the fees that you were getting paid to just deliver enough value that the clients would retain and keep paying those fees?

Matt: I think it was probably a combination of kind of all the above. I think where we eventually landed is we did increase the pricing, so I think we eventually landed on like $2,500 upfront and then maybe $175 a month. So, I think that would have helped just from the revenue and scalability perspective to an extent. You’re still inside of a large organization with overhead, so that was always going to be a challenge. And I think we could have certainly improved and solved the volume piece. There are so many success stories, obviously, many of which have been on the podcast or in the XY Planning community. So, I think we could have solved those.

The challenge that I kind of eventually ran into is I learned about myself, I guess, through this process that I really liked working on the business more than in it, and my opportunities within the organization to grow outside of Lifewise kind of presented themselves in a way where I could really continue to put a lot of time and energy into working on the business. And so, that ended up just becoming more my full-time job to the point that the real issue is just I kind of ran out of time, and so that’s where we didn’t end up scaling it maybe to the extent that we had set out to it at the front end.

Michael: So, how many clients did it end out accumulating up to?

Matt: So, we probably put effort in for 18 or so months, maybe 24 months, and I want to say we’ve probably got 15 or so clients, call it…I probably have the number somewhere maybe $50,000 in revenue, I don’t think it ever surpassed that. So, it wasn’t all for naught but it was far from, I think, the success that we would have hoped it to get to. And again, it was just partially the two reasons we talked about, and then a lot of the third one which is I started to run out of time and saw opportunities to grow and continue to be challenged to kind of come up in other areas of the firm.

Michael: So, just that bottleneck of financial advice businesses is almost never “if you build it, they will come” kinds of things, you have to go out there and get the clients and the challenge of just like getting the clients, getting the volume of clients is hard. Especially if you’re going to get a volume of clients, it’s like, “Well, then maybe we should just go after clients that write bigger checks anyway.” So, the volume of clients and not necessarily as large checks just became challenging?

Matt: Correct. Yeah, exactly. Yeah, truer words have never been spoken, if you build it, they will not necessarily just show up.

Michael: And I guess that goes back to your earlier comment as well of spending all this time trying to figure out what the service offering was going to be and what the structure is going to be and what the tech was going to be and all of that, perfecting the mousetrap. When in retrospect, you wish you’d spent more time just trying to get it out there and getting the client quantity and client volume going?

Matt: Exactly. Yeah, in hindsight, I would have spent all of 30 minutes creating a brochure using more or less a watered-down version of our existing service model and then spent the rest of the next two years just trying to get clients and iterate from there. So, again, that was probably the biggest learning I took away from that, and, again, it was invaluable. I guess I wish I had read “The Lean Startup” at the front end of that and not the back end but again, that’s sometimes how it works.

How Matt Leveraged His Tech Stacks Around Young Clients’ Needs [35:36]

Michael: And just one or two other quick questions, I want to move on to sort of the next stage of it. But just I was struck, why the tech changes? Why Salesforce instead of Junxure? Why eMoney instead of MoneyGuide?

Matt: Yeah, it’s a good question. I think two answers, kind of one for each of the tech pieces, is I think on the planning software side, we felt like young professionals needed more cash flow planning. And so, MoneyGuidePro, as you know, is more goal-based, and so we really wanted to help younger clients learn to manage their cash flow, particularly if they’re potentially starting a business or paying off student loans and we just felt like that could model that out better. And then the second piece of that being that the eMoney at the time, I don’t think MoneyGuidePro had a kind of a vault or a dashboard and we felt like that was something.

And then the third reason being that at the time, we were beginning to think about transitioning sort of the larger practice, if you will, from MoneyGuide to eMoney and that was sort of a low-risk way to test it out with some clients. So, that was it on the planning software side. On the CRM side, we wanted to do some integrations with HubSpot, I think it would have been at the time. And Junxure, as you know, was desktop-based, and so it just didn’t have maybe the marketing capabilities. But again, in hindsight, we would have probably just gone with, for sure, just Junxure because again, it was more about just get the MVP or the minimum viable product out and worry about the technology later. But those are kind of the thoughts at the time in terms of why we use the two different tech pieces.

Michael: Because just ditching Junxure and…well, I guess it’s not ditching, the rest of firms still had it, but not using Junxure and all the existing systems and getting Salesforce and standing it up and figure out how to use it and learning curve and all of that was just time you spent on that, that in retrospect could have been out there just trying to get more initial client volume going?

Matt: Exactly. Yep, exactly.

Michael: And I am curious quickly, just to come back once more on this MoneyGuide versus eMoney. There’s so much discussion from…at least I feel like from MoneyGuide directly, and granted, and maybe this is dated because you were building before this. But they’ve been building blocks, they talk about setting up simple goals for younger clients so they can do the planning. I feel like there’s a lot of advisors out there who kind of frame MoneyGuide is goals-based planning, it’s great for working with younger clients because you can just kind of take quicker slices of goals and move on and don’t have it be as time-intensive as cash flow-based planning. So, just I’m struck that when you were building a business to actually serve next-generation clients, you wanted to move away from MoneyGuide and over to eMoney. So, can you talk a little bit more of just what was not working around MoneyGuide goals-based planning for younger clients?

Matt: Yeah, and to be clear, I’m not going to suggest that one is perfect, or that one is the right answer or not. I think for us, we just felt like being inside of a tax firm or being born out of a tax firm, tax planning and the integration of tax and how that impacts cash flow planning, we felt like we needed a little bit more robustness to the planning software to do that. And that’s not to say that sort of right or wrong; that was just sort of the way we viewed things, and so that was a big driving force behind it.

But I agree, again, potentially, I would have done it differently, just given how scalable and simple MoneyGuidePro is and how it can really focus on, “Okay, let’s just focus on savings,” and then maybe you handle cash flow in a spreadsheet or something like that. Not to mention, it’s more expensive but it did give us a really good glimpse into how the tool could be used and I think helped when we did make a fairly large change effort to shift gears at the broader practice level from MoneyGuide to eMoney.

Michael: So, last question on the Lifewise part, I want to actually come back to you. One of the trade-offs for doing this in the entrepreneurship context is like, “I own my thing, it’s mine, it’s mine to own, it’s mine to grow, it’s mine to sell, I get the income, as the practice grows, I get all the remunerative benefits of that.” So, I’m wondering as you picked this intrapreneurship path, I’m wondering like how are you going to get compensated as the client base grew? So, what was the upside for you if you weren’t building it internally and owning it? And then ultimately, how did think about owning client relationships versus building this at KDV where ultimately, it’s their clients and you bring it into service? So, how did comp work and how did you think about ownership?

Matt: Yeah, so comp was pretty straightforward. It was just salary plus bonus. And as it is today for us, advisors have salary plus bonus, it’s driven by acquiring new clients and retaining existing clients, so mine was very similar to that. The ownership piece, I knew going in that I was not going to own the clients. It was 150 employees, it was a shareholder-led organization, so I think at the time, there was maybe 20 to 30 shareholders. So, I knew at some point, there would be an opportunity if the firm kept growing and I did a good job, hopefully, there’d be an opportunity to become a shareholder and an owner in the larger organization.

But upfront, there was no sort of like carve out or anything like that specific to those clients. And, candidly, I don’t know that there would have been a ton of value, at least to the stage that we got it build, just at only 15 or so clients. So, it wasn’t something I was too terribly worried about and obviously, I was trying to provide value in other areas of the firm as sort of my “side hustle” as well.

Michael: Well, I’m struck by that framing that when working in a larger firm like that…and granted, I think accounting firms and also law firms just have had more years and more decades to sort of establish these systems and expectations. But I find it an interesting mindset sort of shift for you that the goal in being successful in building this within a larger organization was, “If I do well, I too can become an owner, shareholder, or partner in the larger organization for which I’m contributing a part but lots of other people are contributing parts as well and I get to participate in the profits of that aggregate entity.”

But just, I think like the whole game, the whole rules of engagement are different when it’s not, “I build this thing, I own this thing,” it’s, “I’m going to contribute to the whole and if I do well in contributing to the whole, I get an opportunity to own a piece of the whole as well as a partner.” And that, I guess, I think the carrot at the end of the stick is not ownership of the client base that you’re building at the firm, it’s the chance to have ownership of a piece of the firm.

Matt: Exactly. And BerganKDV at the corporate level is really one entity, and so you become a shareholder in not only a wealth management firm, but a technology, tax firm, a payroll company. And so, you’re diversified from that perspective when the firm is growing. And so, that was really intriguing to me, I think, as well. I know that’s one of the challenges many young advisors out of college and just coming out of college face is there’s a lot of small practices and there’s certainly opportunity in those, but the career path or sort of the opportunity to ownership might not be as clear. And so, coming to an organization where there was 20 or so shareholders that achieved that I think just gave me a little bit more confidence that while there’s no guarantees there was an opportunity there, it’s certainly been a fun journey so far.

Michael: So, talk to us more about what changed? You were two-plus years into this, some traction and revenue starting to go on it. And as you said, it sounds like there were sort of two things that happen simultaneously. Your own journey, you found, “I actually like working more on the business than in it,” which starts leading you in kind of a leadership management path as opposed to build the client base and serve the clients path. And also, you said that just opportunities within the firm started shifting, which is one of the interesting things that happens in large and growing firms is just as firms grow, there’s more seats on the bus, to use Jim Collins’ analogy.

The bus is growing, there’s more seats on the bus, there could be cool things that you could do at the firm that literally wasn’t a job that you started but now it is and you might even want that more than the seat you had originally. The cool thing about being in growing organizations. So, talk to us more about what changed after a couple of years? What shifted? What happened to KDV?

Matt: Yeah, I think so within probably six months of me joining, we signed on a pretty sizable retirement plan consulting partnership, it was kind of a referral arrangement. And that just catapulted us exponentially forward on that side of the business, and that was where I was sort of side hustling, if you will. And so, incidentally, I had a side hustle that was now becoming almost a full-time job, again, which I enjoyed and was super challenging and a great learning opportunity. Fast forward a couple of years, I had kind of an opportunity to lead that team for a brief period of time. And then in 2014, our CEO of sort of the larger organization was stepping into a new role as he kind of transitioned towards retirement after 20 or so years in that seat.

And the gentleman, Dave Hinnenkamp, who was a mentor of mine—actually was the person that founded our wealth management practice back in 2000—he elevated into the CEO seat, which created an opening for what was essentially the director of wealth management role at BerganKDV. And I threw my name in the hat, probably thinking it was maybe 10 years too early, and just got really fortunate and lucky to be able to get the role and the opportunity. So, the last four years, I’ve been leading our wealth management… our larger wealth management group. And so, that kind of instantly put a pause on Lifewise and some of the other things that I was doing because I had sort of, I guess, a new full-time job, if you will.

Michael: So, just paint a picture for me, timing wise. 2018, you get the gig, how long have you been out of school at this point? How old or how many years of experience do you have coming into like, “Oh, here’s a $1 billion firm you could run?”

Matt: Yeah, I still sort of pinched myself, and I’m not quite sure what they were thinking. But I was 29 at the time, so I hadn’t quite hit 30. I graduated in 2011 from St. Olaf College down in southern Minnesota and I had a couple of internships before I graduated, but by and large, been in the industry for about seven or eight years. And, yeah, again, like I said, just got really fortunate to step into a role that I’m super passionate about and I think learned through some of the struggles with Lifewise that I really did enjoy working on the business and I’d always enjoyed being part of a great team and leading and that was something…again, I was really fortunate to step into that opportunity albeit green, I guess to say it politely.

Michael: Yeah, so how did that happen? How did you get the gig?

Matt: Yeah, so one of the things I think we’ve grown a lot as an organization is being really intentional about our hiring process. And so, at the time, for most positions like that, we’re doing pretty substantial sort of panel interviews, I think I had to go through…basically apply. There were internal candidates, I don’t think there was anybody external, and then I had to go through like a 10-person panel interview, which was a little intimidating at that time but nonetheless, in hindsight, it went relatively well, I guess. And that was really…yeah, I think I was fortunate enough to hopefully show that I was able to be relatively innovative and creative and curious, which I think are important traits of a leader and I really had a passion for learning the industry and the strategy side and just keeping a pulse on things. And, again, I sometimes still wonder how I ended up in the seat but obviously, very grateful for that.

Michael: So, how big was the team when you took it over? How many people were you responsible for?

Matt: Yeah, so the team was about 26 people at the time, we were probably I think, almost to the dollar, probably about 4.7 million and I want to say somewhere in the $1–1.5 billion space primarily in Minnesota, but we did have a couple of offices in Iowa that sort of mirror the footprint of the larger CPA organization.

Michael: So, $4.7 million of revenue and $1–1.5 billion AUM?

Matt: Correct, and I guess maybe a point of clarification too, that includes retirement plan assets. So, we have a pretty sizable retirement plan consulting practice, so that $1 billion or $1.5 billion is both individuals from traditional wealth assets and then also defined contribution assets.

Michael: I was going to say, that kind of revenue to AUM ratio where you’re down in kind of the 30–50 basis point average revenue yield, I’m assuming that means retirement dollars is there as well where we tend to be lower, as well as individual client and wealth management dollars that we tend to go higher.

Matt: Yeah, exactly. And I think back, so Dave called me to let me know I got the position, again, this would have been in May of 2018, I think. And I hung up the phone and kind of had one of those “Oh, my God” moments like, “What did I just…?”

Michael: Like, “I got it. God, what have I done to myself?”

Matt: Yeah, and I think the scariest part is for a day, I couldn’t tell anybody because they wanted to let… communicated, obviously, appropriately to the larger group. And that was honestly probably the scariest day because, at that point, I was feeling like, “Oh, my goodness, I have to do this all myself, who am I to think that I can do this?” And then I think what I learned pretty quickly is at the end of the day, I don’t have to do all this, I have to create an environment for our team to be successful. And we’re really fortunate, we’ve got so many good people, both leaders and advisors, client service team members. And so, I think once that switch kind of flipped and it was out in the open and I realized that, again, I just had to be somebody that can help kind of create an environment for the team to be successful, it was…and not to say it wasn’t without its challenges, I’m sure we’ll get into many of those, but it gave me a little bit more peace of mind that I didn’t have to do it all.

Michael: Well, I like that framing like, “Wait, I don’t actually have to do all of this; I have to create an environment where our team can be successful.” It does kind of change the stakes a bit. But I guess at the same time, I’m wondering, you’re 29 years old coming into this senior leadership role with, I’m assuming, some folks who are literally double your age, many of whom have been there years or decades longer than you because like you said, you’d only been there a couple of years at that point since you’ve come into the Lifewise thing. So, how does that work? How do you try to set your own sort of authority or leadership with that kind of age experience difference of the people that you’re leading?

Matt: Yeah, it’s a great question, it was definitely probably one of the biggest insecurities or challenges I had upfront. And you alluded to it, in some cases, people had been in the business longer than I had been alive, and so to walk in and suggest that I know more…and I think that was kind of the irony of the role. And I think, frankly, the irony of any… or a lot of leadership roles, I would say, is that oftentimes you know… and frankly, many times you know significantly less about every core domain within the business, right? We have a chief compliance officer, chief investment officer, chief planning officer, and at the end of the day, I’m never going to know nearly as much as those three individuals know about their particular domain. And so, I think once I kind of understood that that was okay and ultimately, again, I didn’t have to be the smartest compliance person or the smartest investment person, I just really had to set the direction and try to create that environment, I think that helped.

But it did, it’s probably only within the last year, a year and a half have I really become super comfortable with that. And I’ve been fortunate that we have such a great team and people that I think had been super supportive of me, that have sort of allowed me to work through that and I never felt like people weren’t willing to listen or anything just because I was younger. So, I think that was something probably more in my head than in reality. But if I had come in guns a-blazing and trying to tell people exactly what to do, I don’t think I would have been given as much grace. You got to find the balance between the two, I guess.

Michael: So, how do you go through the process of learning all the things that you need to do and figure out how to do in that kind of leadership position if you hadn’t necessarily had the experience of doing it yet?

Matt: Yeah, that has been something that has been another challenge. I’m a very curious person, I guess, by nature, and I love to learn, I love to read. And so, I basically just, for two years, tried to read as much as I could, ask as many questions as I could, lean on the people that were already on the team. The nice thing is the old leadership team that I was stepping in to lead had largely been intact for a period of time. We made some changes, but that certainly brought a lot of institutional knowledge that I didn’t necessarily have to just suddenly know. But leaning on Dave who was previously in the seat, and then again, just being curious and I guess being humble or dumb enough, I guess I’ll let the audience decide, to ask a lot of questions and sort of not think that any question was off-limits.

And again, that’s a balance, obviously, you want to instill confidence in people, but trying to just ask a lot of questions as well. So, it’s something that I’m continuing to learn but I’ve been fortunate that we’ve got a lot of good infrastructure, team, and resources to support. And then just recently, I guess maybe the last piece I’d add is I was fortunate enough to go through the Schwab Executive Leadership Program, which has been amazing and that I wish I had maybe gone through that a year or two prior to stepping into the role. But that has been kind of another accelerant in my learning journey and, I guess, development as a leader.

Michael: So, can you talk more about that, because I think a lot of folks aren’t necessarily familiar with Schwab’s Executive Leadership Program?

Matt: Yeah, so I wasn’t familiar with it up until maybe a couple of years ago, and our relationship manager at Schwab invited me to apply or I guess…I don’t remember exactly the logistics of it but I think somebody internally then had to nominate you. But essentially, the program was…it’s a five or six-course program, that’s a year, and so it’s 30 or 40 people in very similar roles, anywhere from sort of chief operations officer to director to maybe like a managing director of an advisor team, operations manager type roles. Really, any leaders that…there’s no age component of it, I think they tended to probably skew a little bit to sort of G2, if you will. And the topics were positive leadership, marketing, entrepreneurship, talent management, and then, of course, I’m going to forget the fifth one.

But it was an amazing program, it was basically…call it maybe two hours a week, with sort of an hour class on Friday and then an hour or two of homework throughout the week. And then we obviously went through it during the pandemic, so we didn’t get together the first time. But the biggest thing was really just the network of people that you meet, not too dissimilar from XY Planning Network or other networks, but just the community that you build and the friends and resources that you develop. That’s where so much of the learning comes about, but that was instrumental in helping me continue to grow as well.

Michael: Interesting. So, two hours…so I think you said like two hours a week and an hour of class, two hours a week of homework like self-directed things and then an hour of an in-person class?

Matt: Yeah, so they use a platform called CorpU. And so, I think Monday through Wednesday, there’s anywhere from 20-ish to 30-ish minutes of kind of self-directed reading and materials recorded videos. Thursday is generally like an hour small group session and then Friday is sort of the larger cohort, if you will, that’s generally teacher-led with some really cool professors from University of Michigan and Boulder and essentially leading courses on those topics with sort of an RIA flavor. So, yeah, it was an awesome program. We actually just got back from our capstone here just about a month or so ago.

Michael: So, how long does it take to go through the whole program?

Matt: Almost 12 months, I think, exactly. So, we started it in January of ’21, we wrapped in December of ’21. and then with the pandemic kind of the spike in January, I guess we pushed out our capstone until, I guess, it would have been April of 2022 or so. So, it’s about a year-long program.

Michael: And is there a cost to this? Is this just a thing Schwab do for the large Schwab firms? Or do you have to pay to go through this program?

Matt: Yep, yep, there’s definitely a cost. I want to say it was like $5–6,000, and then obviously, airfare and lodging, for sure, for the last class. And I would say it’s pretty…from a pricing perspective, it’s very competitive. I know there’s another one we’re putting one of our advisors through called G2, I’m sure many listeners are familiar, so that’s another one that we’ve started to use.

Michael: Philip Palaveev G2 Leadership Institute.

Matt: Exactly, yep. Yep. And we’ve heard really good things thus far, one of my colleagues is going through that. So, we really want to continue to invest in leaders. We think at the end of the day, if we’re going to get to sort of our organizational goals, probably the biggest challenge is just going to be finding and retaining enough great people and particularly great leaders. So, that’s something we want to continue to invest heavily in developing leaders in the future.

Michael: Very cool, very cool. I was going to say, is the Schwab…because I think Palaveev’s G2 program is just open to anybody who wants to apply. Schwab’s, it sounds like, as you said, you have to be nominated internally at Schwab. So, presumably then, you pretty much have to be an RIA at Schwab, using Schwab to be able to get nominated into the Schwab program?

Matt: Correct. Yep, exactly. Yeah, you got to be custodied with Schwab and then have an internal nomination. I think there is like a two-year waiting period, so you can’t have somebody go every year, you’ve got to maybe go every couple of years.

Michael: So, a waiting period just being like a firm can’t…so a large firm doesn’t just own the permanent seats, like 1 out of every 40 is from our large firms because we’re constantly rotating our own next-generation leaders through, to be a little more selective if you’re a large firm putting people through?

Matt: Exactly, yep, yep. Yep, you don’t get a permanent seat and I would say they do a really good job of balancing it out. I don’t think there was more than one person from any one firm. Firms ranged in size, geographically, as well as size-wise, and just sort of focus areas, so I think there was a lot of good diversity of thought and learning. And, yeah, definitely a program I couldn’t recommend highly enough.

Michael: So, any particular “Aha”s or takeaways for you in going through that program?

Matt: Yeah, I think probably the biggest one was just sort of a framework or being really intentional about change management. I think, at the end of the day, any of us that are leading practices or building our own practice, at the end of the day, we’re trying to continue to evolve and change. And change is oftentimes scary and it’s a different challenge to do that at scale with 30 people than it is to change with 1 or 2, not to say one is harder or easier, it’s just a different host of issues. And so, I think the framework that I walked away with around change management was something that was definitely a takeaway in more of just being really intentional about how you effectuate change, creating urgency, painting a picture of the benefits. And so, that’s something…as we think about a lot of the change initiatives that we’re trying to embark on to continue to grow, I will definitely be applying much of that learning that I maybe didn’t have prior.

Michael: So, can you share a little more about that? I feel like that label out there, “Be intentional about change and manage the change,” is sort of…I feel like that’s the thing we say, I don’t know, it’s never very clear what that actually means, like what do you do or not do or do differently, I don’t know, than dealing with change where you’re not being intentional? What does it mean? Or what were you learning to do that you might not have been doing previously on your own?

Matt: Yeah, so as I think back, one of the big change initiatives we’ve had over the last four years is really trying to create what we call sort of the BerganKDV way. So, we had grown up a little bit in silos in having a practice in St. Cloud, one in Minneapolis, a couple in Iowa, and so there was sort of different ways of doing things and we really wanted to create sort of one coherent client experience. And so, I think before having that learning, we just sort of tried to change and just make it happen. And so, I think, in hindsight, I would do it differently. And as I think about we’re going to be embarking on changing our pricing here in the near future, and so really trying to create a sense of urgency around why we need to change, like what are the benefits both to our clients but to our team members, whether that’s being able to hire more support in the case of increasing pricing or paying people more or being able to invest in technology.

And so, really trying to be intentional about that and then really strategic in trying to figure out who are the people that you can sort of use as early adopters and those that can help bring about change and get buy-in from others and then ultimately, kind of continue to celebrate early wins. That was something with Lifewise I would have done differently is try to find early wins that you can prove that like, “Hey, this is working,” and build energy and excitement around it. So, just a couple of those as examples, just, again, building the energy, kind of creating clarity around the why, and then getting early wins would be a couple of the pieces of that framework that, again, I would have taken away that are hopefully, relatively concrete.

Michael: So, that’s not necessarily around…at least I think that’s not necessarily around doing the change differently, per se, it’s like the changes are going to be the change, you had an intention to do it. When you decide you’re going to do pricing change or create a unified Bergan way of things, the change management for you, it sounds like, it’s heavily focused around just how do we get the team to have buy-in. to be on board, to be ready to go with it where that’s where you need more clarity around the why and clarity around the strategy and adopters who can help champion it for you and celebrating the early wins. At least as I would hear it, that’s all how do we get and sustain the buy-in from the team for the change but the change still going to be the change, we’re trying to create the momentum around it from all the people who don’t always like change naturally.

Matt: Exactly. And then the framework is actually…and you’re probably familiar with it, Michael, it’s by John Kotter. So, I think he was a Harvard professor if I’m recalling that correctly, but I’m sure you can throw maybe a note in the show notes. But it’s a fairly simple albeit challenging to execute 8-step change framework. And to your point, it didn’t change sort of like the initiatives that we were trying to implement the change, it really just changed how I and maybe our team think about how we need to do that more effectively and more intentionally. So, that was, again, probably the biggest takeaway was just how to do that. Because at the end of the day, we’re always going to be changing both as an industry and as a firm, and so I think being able to do that well, hopefully, will be, in some ways, a differentiator for us.

Michael: So, what is it typical week look like for you at this point in the leadership position that you have?

Matt: Yeah, it’s a good question. I would say it has certainly evolved. So, when I first stepped into the role, I felt like I was probably wearing five or six hats, still doing quite a bit of client work, trying to offload some of the Lifewise stuff, stepping in to fill holes where maybe people had left. And I think probably just in the last six months, it’s been a really cool thing to see, we’ve continued to hire great people and have sort of director or manager level roles that are managing a lot of the teams within the department that tie into our leadership team. And so, my role has increasingly shifted on driving growth and then also driving sort of the strategy and then, again, trying to create that environment for the team to be successful.

And I think one of the challenges that has come up with that is we get so used to as advisors being in sort of the day-to-day grind and back-to-back meetings and emails, and that is awesome and feels good and feels like you’re adding things. Sometimes when you get into a leadership position where you actually have finally created some leverage and some space to think and be strategic and drive growth, it can almost be a little bit disorienting just because you start to question like, “Hey, am I really providing value as I just think about this problem and how to solve it?” And that’s been probably one of the biggest challenges in the last six months or so is how do you create that space and then be okay with it as a leader? Because day-to-day, to your question, there’s more of it and I think that’s good, but again, it’s a little bit different than the constant firefight that was kind of part of my role the first three or so years.

Michael: So, talk to us more about that. I’m struck by…because I feel like there’s so much discussion in the context of growing and scaling firms like we’re doing all this work to create more space for ourselves as leaders to have more time, to have time to work on the business and in the business or to think more about strategy and growth. So, I’m fascinated by this framing of like, “I got there and I started getting more space, and then I basically started feeling guilty that I had so much free time.” That’s my words on top of yours, I kind of feel like that’s what I’m hearing from you, like, you got to the part where you had these days and then all of a sudden, it was like, “Oh, I feel weird that I have so much free time, shouldn’t I be doing something?”

Matt: Yeah, yeah, I think we as advisors or managers or leaders get so used to the hamster wheel that is, again, the day-to-day. And so, we’re in the process of doing our strategic planning, so our fiscal year starts July 1. And so, as you know, we operate on EOS, and so we just had our big annual actually yesterday. And so, rewind back a couple of weeks, and I blocked off time on the calendar as a focused time to really think about the business and how do we improve it and how do we continue to grow and give team members a great experience. Meanwhile, the team is working their butts off serving clients, dealing with fires, dealing with team members’ stuff.

And so, it’s just kind of a disorienting feeling when I’m thinking one, three, five years down the road when so many of our team caught up in the day-to-day and that’s part of it, right? And so, I think just becoming comfortable with that and knowing that we’ve got really good people that can solve the day-to-day and part of the role that I sit in is trying to figure out how do we navigate moving forward? So, I think it’s just something that’ll come more naturally as we continue to grow, but it’s definitely an adjustment period, I think, particularly in the last three years.

Michael: So, how else are you handling that? Are there things you’re doing to get more comfortable with it or to recreate some of the focus for your time if you suddenly feel like you have to redirect the time?

Matt: Yeah, I think probably the two or three things that I tried to do and I think are effective and I think you’re probably familiar with most of them, so the EOS or Traction Framework, there’s a tool in there called Delegate and Elevate. And so, I think that has been something that I’ve had to learn and get better at is it’s okay to let go of the vine, I think, is the direct quote from the book. But really trying to understand what I’m good at and what I’m not good at, and then be willing to let go of those things that I’m not good at or maybe I don’t have energy around.

So, that has been one way, I think, to just maybe frame it up in such a way that I feel more comfortable letting go because I am far from the best person to handle it. And then I think also the V/TO, which is sort of a two-page document, as you know, that sort of the vision or framework of sort of where you’re going. I think just trying to keep that really center and top of mind with our one-year initiatives in Rocks. My job is effectively to do Rocks to move our business forward, and so I think that’s given me more comfort and be more comfortable spending time on areas of the business that maybe aren’t next 90-day but might be one to three to five years down the road.

Michael: So, for those who aren’t familiar, can you explain Delegate and Elevate further? For those who have lived within the EOS system, this is really familiar. For those who have not, what is that?

Matt: Yeah, so not anything revolutionary by any stretch of the imagination, but it’s basically just a one-page sort of two-by-two matrix. I think in the top left, it’s like “Love it” and “Great at it,” in the top right, it’s “Like” and “Good.” And then in the bottom, it’s basically either “Don’t like” or some combination of “Don’t like” and “Not good at.” And it’s a framework that we’ve used with my leadership team and our executive team uses it maybe, I don’t know, sort of loosely on an annual basis. And basically, it’s just a sort of a self-reflection of trying to put, call it, the 30 things that are part of your day-to-day job in those buckets and then really trying to focus in on the things that you love and you’re great at and ultimately, you’re going to have energy around.

And then trying to really delegate those things on the bottom end of the framework, if you will, that you’re either not good or you don’t like and it’s draining for you, and really trying to find the people that can do those…almost have those kind of in reverse order, right? They’re great at and they love doing them. So, that’s something that we have used kind of across our organization and I think it has certainly helped us try to get the right work on the right people’s place so they’re going to have energy and obviously, do it really well.

Michael: So, all framed around this idea of like, “We want to elevate ourselves to the things that we like and we’re good at and we want to delegate the things that are below the line that either we don’t like or not good at.” And it sounds like a relatively straightforward thing, but really powerful when you actually do it well, all in.

Matt: Yeah, it’s so simple, right? But effectuating it or implementing it is the challenging part. But I think when done well or at least done intentionally, it can be a really effective tool. And it’s never going to be perfect, right? And in theory, it’s going to evolve, but it definitely has been something I think has been valuable for us and certainly for myself as well.

Michael: And so, you said you live in an EOS world as well. So, I guess, I’m wondering is that something you did as you came into leadership? Is that Something KDV already was doing and you have to learn? Where did the EOS come from?

Matt: Yeah, I probably won’t get the exact date right but it was probably dating back to 2009 or 2010, the organization as a whole had kind of hit a ceiling, if you will, and it was very sort of shareholder-led as opposed to sort of like leadership team-led. And I think they just had made the decision that they wanted to break through the glass ceiling and that was going to be something…that being EOS was going to be a helpful framework in moving the organization forward, particularly given sort of how diverse we were in terms of solutions, so, tax, audit, technology, wealth, and really trying to keep us aligned. And so, when I joined in 2014, they had been using the system, at that point, for four or five years and it was very ingrained in our culture.

And so, I was lucky enough to step into that coming from a place that didn’t use it. I quickly liked it and I think it honestly helped make my transition into this role considerably easier because there was sort of an architecture or a framework that I could step into and lean on in terms of running the business as opposed to having to sort of start from scratch. So, I’m a big EOS fan. For any listeners that want to chat EOS things and nerd out on that, I’m always open to discuss because it’s been something that’s been really good for us and I’m certainly passionate about it.

Michael: So, I guess, again, for those who are listening, this is episode 286. So, if you go to, we’ll have connections out to Matt’s LinkedIn page if you want to reach out and connect and, I don’t know, nerd out on EOS. I know I’ve been surprised, Matt, that there aren’t more advice or study groups of folks that are using EOS because it’s easier to talk about business planning when everybody uses a common system.

Matt: A hundred percent agree. And I think just creating alignment, creating clarity, creating momentum, and then I guess, pun intended, creating traction, it’s a great tool.

The Surprises Matt Encountered On His Journey [1:13:23]

Michael: So, what surprised you the most about this path of being a leader and building and scaling up an advisory business?

Matt: I think probably one of the biggest things is just how scarce and valuable time is. That’s probably been one of the things that I wasn’t prepared for or just maybe wasn’t aware that that was going to be as big of a challenge as it is and just the amount of demands on our time, really in any role as you get into it. But leader’s time, it just becomes so, so important to be able to prioritize and stay focused because every yes is a no to something else, and so there’s no shortages of things that are going to come at you. And so, that’s again where I think EOS is helpful is helping create that focus, but that’s something that I totally underestimated and had to get a lot better at.

Because as I think back when I was starting Lifewise, I was kind of just ideas and maybe didn’t realize that execution is an important part of that and there’s always going to be more good ideas than there are time in the day to execute. And so, that was probably the biggest surprise is just, I guess, coming to that realization pretty quickly that to be effective, you got to say no to a lot of things and be able to prioritize accordingly.

Michael: And I know you said you’re like an avid reader and learner as well. Were there books you read or things you learned that just helped you figure that out or get the clarity for yourself?

Matt: Yeah, one, and I think this is probably on one of your book lists the last couple of years is “Essentialism.” I’m going to forget, is it George McKeown, I think, is maybe his name?

Michael: Yeah, Greg McKeown.

Matt: Greg McKeown, thank you. Yep, yep, so that one is an amazing book. It’s a relatively quick read. I think that really helped both professionally and personally just try to get more clarity on what’s important and how to prioritize. And I can’t take any credit for the “Every yes is a no something else,” that was entirely from the book, so I guess I got to cite that appropriately. But that was definitely a book that had, I think, an influential impact on kind of helping me improve there.

The Low Point On Matt’s Journey [1:15:40]

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

Matt: Oh, there’s certainly hasn’t been a shortage of those. I think probably the low point is within six months of stepping into this role…and actually, I might even go back a little bit before that. One of them was basically kind of having to come to the realization that Lifewise was not viable or as viable as maybe hoped. I think that was tough. But again, I tried to use it as a learning opportunity, and again, in hindsight, the dots sort of connect. But I think probably the lowest point was just probably within the first six months, we lost four or five people. I think we were trying to really create a new vision and people, as you know, have the opportunity to select in or out of kind of the direction of where we were trying to go. And obviously, as a new leader that had people that, again, had been at it far longer, in some cases, than I had been alive, that was really tough. I think we lost a couple of big clients, I don’t think we hit budget the first year, and there was some other stuff that popped up.

And so, all in the first year when you’re 29, there’s a lot of self-doubt that can creep in, or I should say did creep in, but I tried to remain sort of confident in the journey and the learnings and again, was really fortunate to have a good team and a lot of supportive people within the organization that got us through. And now as I think back on the last two and a half years, we’ve had the two best years ever, both as an organization but then also as a department, our wealth management group. And the people that we’re getting to join our team are just amazing and we’ve had on our team…to be clear, it’s both new and long-term, that’s been a really fun part of the job to see we get to add new people to our team and our culture. But definitely some low points and speed bumps and a lot of mistakes on the way.

Michael: So, I guess just going back to Lifewise, how did you handle that transition mentally? Or just how do you get through the, “I’ve been working on this thing and it was my baby and it’s really not working out, but I got this cool other opportunity but kind of have to let my baby go?”

Matt: Yeah, it wasn’t…in some respects, it wasn’t that challenging because the firm…I never felt like, “Oh, my gosh, my job is on the line,” or anything. I felt like the opportunities that were presenting themselves outside of my focus on that were in areas that were going to move me along professionally a lot faster and allow me to develop and learn a lot faster. And so, in a lot of ways, I was okay with it. It was just more sort of like, I guess, the embarrassment or the disappointment of like, “Hey, you tried something, it didn’t work out.” But I grew up playing sports, and so that was, I guess, a theme or something you learn pretty quickly in sports since you’re not going to win them all and you just got to try to dust yourself off. So, that was, again, a disappointment and something tough, but I think I was able to see sort of, I guess, the silver lining in it was just opportunities that lie ahead.

Michael: Well, to me, always one of the interesting things was about, I guess, the Silicon Tech Valley culture in particular is there’s almost a nobleness of like, “Here’s the thing I went out and tried and I raised a bunch of money, we spent a bunch of dollars, we built a whole bunch of stuff, it didn’t work out, company’s long since gone, but, man, I went out there and tried it and went through that process.” And there’s almost a badge of honor if you’ve done that, succeeded or not, or had to grow big or not, certainly nice when it grows big. But there’s no shame in that in a lot of the tech world because it’s so hard to do, just the respect for having done it and taking the leap is really powerful.

Our industry, I feel like it’s really different. For better or worse, we’re a lot more results-oriented and process-oriented maybe, so we tend to look at things like AUM and how big the thing grew as opposed to, “I tried to innovate and I actually took the risk and made the leap and did the thing.” So, I’m struck by that distinction, it’s not often I find that I hear folks that just have kind of gone through what you’ve gone through and, I don’t know, just come to say like, “I tried something, it didn’t work out, and now I’m doing a cool thing and it’s working great, that’s just all part of the journey.”

Matt: Yeah, and I think I guess I would add, it’s easier to sit here today and say that. I don’t know that I would have had probably…

Michael: Yeah, I’m sure it still felt a lot worse in real-time at the moment where you had to accept that transition.

Matt: Exactly. Yeah, yeah. But I think with age or time, I guess, comes perspective. And so, I think that hopefully, I’ve been able to broaden that perspective and again, connect those dots, to steal the Steve Jobs analogy. But, yeah, definitely during when it was happening, it was not fun to go through that and I certainly feel frustration and disappointment.

The Advice Matt Would Give His Former Self [1:21:13]

Michael: So, anything that you wish you had done differently in this? I’m struck in particular by your comments of like within six months of stepping in the role, lost four to five long-term team members, lost a few big clients, the budget didn’t hit. So, are there things you know, now that you wish you can tell you from four or five years ago as you’re getting ready to step into this role of what you would do differently?

Matt: Yeah, probably the biggest thing is I think I probably came into it with my eyes a little bit bigger than my stomach, and what I mean by that is just thinking that we could sort of solve all the world’s problems and all of our problems within like three months. And so, that was something I remember vividly sort of setting out within the first couple months, it’s like, “Hey, here are the 10 things we’re going to get done and we’re going to get them all done by the end of July,” or something like that, and we got two of them done or something like that. And so, it was, I think, important for me to learn and I would have done differently is…not under-promise and over-deliver, but just be really clear about realistic expectations in terms of managing key initiatives and dealing with issues.

And so, that was something that…because at the end of the day, if you do that enough, you start to sort of erode trust because you’re saying one thing and you’re not doing it. And so, that was something that I tried to learn from really quickly, be really clear about what’s realistic. Obviously, still push the bounds of what’s possible, but also sort of set expectations, particularly new in a role. So, that would be one thing. And then there’s a great book out there, it’s called “The First 90 Days,” I don’t know the author. But that’s something that I, of course, did not read the first 90 days, but probably read after the first year. But I think it talks about, which is something I wish I had known or a framework I had, just how stepping into different roles can be different depending on the situations.

And I won’t remember all five of them, but one is turn around, one is just sort of like continue the momentum, and then there’s a couple others. And so, I think I would have…and I think it’s applicable for any advisor, any leader. When you step into a new role, understand what you’re stepping into and then sort of build the planning according to that environment because the plan is likely going to look way different, depending on the situation. And it’s probably obvious to say that out loud but I think just the way the book frames it up was really helpful.

The Advice Matt Would Give To Younger, Newer Advisors [1:23:43]

Michael: Very cool. So, again, for folks listening, this is episode 286. So, if you go to, we’ll grab a link for “The First 90 Days,” if you want to go find the book and check it out. So, Matt, what advice would you give younger newer advisors coming into the industry today and trying to chart their own path?

Matt: I think probably the biggest thing I would say is just stay really, really curious and always be willing to reach out. I’ve been amazed at how supportive and open our industry is in terms of…particularly in the RIA space, just in terms of being willing to share everything from strategic decisions to how do you solve this problem, to comp info. Just literally, you reach out to somebody, it’s amazing how willing and supportive the advisor community is. And so, I think that’s something that…it can be kind of intimidating when you’re 22 or 23 coming out of college and reaching out to somebody that’s been in the business for 20 years plus or minus.

But I think that’s something I tried to do and try to get involved in FPA. And so, I just would encourage people to be really curious and tap into the industry, tap into your network, obviously, of avid Kitces readers and the XYPN community. Again, I think that’s hard to do when you’re first out of college because you may not have the connections, but if you’re curious and have that desire to learn and grow, that would probably be the biggest thing. So, I think, hopefully, I’ve tried to emulate that through my career.

Michael: So, how do you make that happen in practice? I hear you, our industry is really open and willing to share, I’ve found that as well. But just how do you make that happen in practice? Are you literally cold emailing people? And if so, what do you actually say to get that conversation going?

Matt: Yeah, it’s a good question. So, I guess to be more specific or sort of tactical, a couple of things I would encourage those getting into the business. I leaned pretty heavily on our alumni network. So, as I mentioned earlier, I went to St. Olaf College in Minnesota and they have a pretty robust sort of alumni database that I was able to tap into and, again, you can go in there and filter by fields or different sort of criteria. And I think then it’s as simple as if they’ve got an email, great, if not, find them on LinkedIn and reach out. Again, it’s amazing how supportive people are in the industry but then also, if you say, “Hey, I went to your alma mater,” there’s usually another level of energy and openness to connect. And so, that would be one way. And then…

Michael: What were you asking them when you reached out? Do you just be like, “Hey, I’d like to pick your brain, can I get you coffee? Can I have some time on the phone? I’ve got a particular question, I just want you to be the font of wisdom?” What’s the pitch? What’s the outreach? How do you actually open these connections?

Matt: Yeah, I would say any combination of all of the above. Certainly, in today’s world, I think being able to do that digitally for 30 minutes on a Teams or a Zoom meeting. But my approach was usually just, “Hey, I stumbled across you on the alumni network, I’m either in the industry or curious about getting in the industry and I’d love to learn from you and just hear more about your career.” And people inherently like talking about themselves, and so people are genuinely pretty open to sharing their career and wanting to help people too. Obviously, people want to help people too. So, that’s another part of it.

So, yeah, I would say that was kind of how I approached it. I was fortunate enough to have a couple of people in my life, a hockey coach when I was in high school and a college friend’s dad were both in the business, and so that was kind of another in. And then I think the advice there is just to sort of stay proactive, right? People that are mid-career, far along in their career tend to be really busy. And so, it’s sort of incumbent upon you as that younger adviser getting into the business to be the one potentially reaching out a couple of times, “You want to grab coffee?” It’s generally not going to go the other way. And again, people are always, at least in my experience, happy to help, it’s just a matter of you’re going to got to stay visible and sort of on top of it.

Michael: I find there’s also just a good parallel for that, frankly, for any of us who are not in the business development role as well, that there are a lot of people who may be interested, whether that’s interested in mentoring or at least sharing some of their time or interested in doing business with you and hiring you as their advisor. But they’re busy and busy people, something else came up that moment, that hour, or that day in their life that they just didn’t have the time or the capacity or the mental bandwidth to reply and say like, “Yes, I’d be happy to do that.”

No reply doesn’t necessarily mean they’re unhappy or even that they’re not interested. sometimes it just means, “I just don’t have time to deal with this at this exact moment.” And so, if you’re persistent and follow up, sometimes the sixth one is the one that happens to actually be the moment that they’re ready to say yes. And it’s not because there’s anything negative about the first five, they’re not saying no, so it’s okay to politely and persistently follow up, they might just be busy.

Matt: Yeah, yeah. 100%. I think the same wisdom applies when trying to get new clients too, right? Just because they didn’t respond to the first voicemail and email doesn’t mean they don’t have energy around working together, but people are busy. And so, I think that applies beyond just sort of building a network for your career, but to other aspects of the business for sure.

Michael: Yeah, no means no but no response could just mean like, “I just didn’t have the opportunity or the time or the bandwidth to deal with this.” So, if you keep trying, there’s a decent chance it’ll go better on a future attempt.

Matt: Yeah. And then the key is to get to a yes or a no as quick as possible, right? So, that’s part of the deal.

What Success Means To Matt [1:29:54]

Michael: So, as we wrap up, this podcast is about success and one of the themes that always comes up is just the word success means very different things to different people. And so, you’re on this wonderful path of success with leadership in the firm of a very sizable business at still a relatively young age by the industry standard, so you get lots of time to continue to grow and compound it from here. So, you’re on a successful business and career track. How do you define success for yourself at this point?

Matt: Yeah, as a longtime listener of the podcast, I had a sneaking suspicion, Michael, that that question might be coming…

Michael: It’s possible.

Matt: So, I’ve tried to reflect on it. As I’ve thought about it, I think it kind of comes down to…success, to me, is really the opportunity to do what I love and I’m passionate about and really, to be part of a great team. That’s something even since I was a kid, I always loved being part of a great team. And ultimately, all sort of in the name of trying to have an impact on people’s lives. And to me, in my current role, that is more about impacting our team members’ lives and allowing them to grow professionally and developing…that’s really success to me because I know at the end of the day, that’s going to serve our clients well. And so, that’s kind of how I think about success and it’s certainly a journey and I would add too, that being comfortable enjoying the journey both kind of the ups and the downs. Again, not to be cheesy, but that’s certainly a part of it that I think falls into that because there’s certainly a lot of low points but that’s kind of all part of the ride.

Michael: I like that, “Lots of low points but that’s part of the ride.” Awesome. Well, thank you so much, Matt, for joining us on the “Financial Advisor Success Podcast.”

Matt: Thanks so much, Michael. It’s been a privilege. Appreciate all you do for the industry. Thank you.

Michael: Thank you, Matt.

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