Ep 501: Navigating Succession Planning That Doesn't Turn Out As Expected (Even When You're Doing Everything Right) with Rick Kahler

0:02Rick Kahler: Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker, and consultant Michael Kitsis to hear stories of how leading financial advisors navigated the inevitable challenges that arise on the path to success and get insight from leading industry consultants about how to break through to the next level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone. Welcome to the 501st episode of the Financial Advisor Success Podcast. My guest on today's podcast is Rick Kaler. Rick is the founder of Kaler Financial Group, an RIA based in Rapid City, South Dakota, that oversees approximately$300 million in assets under management for 130 client households.

0:47What's unique about Rick, though, is how he, despite taking all of the right steps when it comes to succession planning, ended up having multiple false starts before eventually completing a deal with an external buyer. In this episode, we talk in depth about how Rick started succession planning more than a decade before he planned to transition his firm, including by identifying a potential successor meeting with valuation consultants and gathering the experiences of others in the advisory community, why Rick thought it was important to closely discuss the terms of the partnership agreement to ensure that he and his chosen successor were on the same page in terms of what would happen if plans went awry, and how Rick's planned successor after several years ultimately chose not to pursue this succession path, leaving him left to start over again.

1:28We also talk about how Rick's second attempt at an internal succession was thwarted when a longtime employee and planned successor was headhunted away by an attractive salary offer, how Rick then worked with consultants to rank his succession preferences and widened his aperture for different types of potential partners, and how Rick ultimately decided on a deal with a local accounting firm he knew well. And be certain to listen to the end where Rick shares the challenges he's experienced following the deal, including managing cultural differences between his firm and the buyer, as well as his personal adjustment to no longer being in charge of the business, how Rick has found great value for maintaining a support network, including study groups, therapists, and business coaches during this challenging period, and how Rick has ultimately accepted the unexpected turns that came his way on his succession path and doesn't have regrets about the decisions that he made along the way.

2:15And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast with Rick Kaler.

2:25Welcome, Rick Kaler, to the Financial Advisor Success Podcast. Thank you, Michael. It is good to be here. So I'm very excited to have you on the podcast, or I should really say to have you back on the podcast. It was for the hardcore binge listeners, Rick. Rick was episode one, like the original episode almost exactly 10 years ago. So now we're back for episode 501 because part of the journey that we shared on the very first podcast, Rick, you had built this wonderfully successful million-dollar practice. You were like 1.2 million of revenue at the time, had been working for 30 years, team in place, eyeing towards the journey of succession planning, Like this is what I'm going to do over the next decade.

3:14And so now it's a decade later. We've gone the succession journey with all the like ups and downs and bumps and bruises and things that come along the way. And I just, I think it's important conversation because I know, I mean, the ideal for a lot of advisors is trying to figure out, is there a way I can craft my own internal succession plan? Cause they want to see the legacy of the firm continue, right? Like, this is what I built. This is the team and the culture we created. This is how clients are served and hoping to see that continue beyond. But almost by definition, if we're getting ready to exit a business, we spent a lifetime building.

3:50We've never done this part of the journey before. And ironically, I find a lot of advisors, once they go through a transition, they kind of exit stage left because they've transitioned on from that stage. So I'm excited to get to catch up on you. You've done the 10-year journey. How has it gone? How did all of this play out since episode one a decade ago? So I'm a little grayer than when we spoke 10 years ago, probably even more. Gray hair added in the last three years. And it has been a journey. It has been a journey I would have never scripted, never would have imagined. Because what you said about, you know, most founders, folks in my position are wanting an internal succession and they're wanting what they have built and the culture they have built to continue.

4:47And I think that's pretty ubiquitous. And it certainly was the case – well, it was true in my case. And what turned out was quite different from that and something I've really internally had to come to resolution to around my legacy being passing on my firm. so so if i can start this off i'd love to i mean basically like go back 10 years and maybe just repaint the picture of where were you where was the business at the time and like what was what was the vision like how did you want to go about this succession journey that you were queuing up What was the plan? Yeah, 10 years ago, I'd come through a rather rough period.

5:42I remember you asked me to be on the podcast and talk about where I was and not about all your successes that you'd like. A little bit about the bumps. And at that time, I think I told you all I have right now are bumps. I still remember very vividly asking one point a few years prior. I think you had six team members and five of the six team members left for various circumstances in about a month. And I asked, what do you do in that situation? I think you said just crawl into the fetal position for a little while. What else can you do? It feels like the world is ending. And then I came forth and hired a consultant and figured out how to rebuild this and had actually rebuilt to a very good spot at the other end of it.

6:36Yeah, absolutely. As you said, we were 1.2 million. I think when I sold, I was around double that or maybe 2.2 or so. And the plan was at that time, I had an associate, Sarah Swatner, and she was brilliant, had a double master's in engineering and just a fantastic financial planner. And she was getting her degree in counseling, her two-year degree in mental health counseling. And that was the plan about that time was for her to become my successor. Okay. And we ordered all the documents from financial transitions and we're ready to go. And we were doing some counseling just with the two of us, with a therapist, getting ready for succession, making sure everything was being discussed.

7:31I mean, we're being very proactive, right? Talk to me a little bit more about what you were actually covering or trying to discuss there. I know you have deep roots in financial therapy world, but I don't necessarily hear a lot of advisors saying they went to counseling with a therapist to prepare the succession relationship. I'm not saying it's a bad thing. No, do as I do. But tell us a little bit more about that. Yeah, it's do as I say, but not as I do. And it's surprising probably how many financial therapists have never done their own financial therapy. So she was a therapist. I think maybe she had graduated by that time.

8:15I don't know. But to us, that's a positive. To us, this is a great way to explore a potential partnership and really get in and uncover issues and things that might present themselves. So we took that very seriously rather than just weighed in. Well, I've only had one remarriage. and on my one remarriage, we entered the prenup conversation, right? Okay. And we're both agreed. Yeah, yeah, this is a great thing. Yeah, we'll do a prenup. And as we did that, it became not such a great thing. And we discovered some things and we ended up not getting a prenup, which is a story in itself. But it was kind of like that between us.

9:03We were doing the prenup planning. We were doing that planning when you're going to go into partnership with somebody. that's really important, the discovery period. Let's look through this. Let's decide what the divorce would be, you know, the buy-sell agreement, right? Yeah. That's a powerful point to me and to itself. I've, you know, I talked to a lot of advisors that I think just struggle. You know, we're working on a partnership, but do we really have to get a lawyer and do all the things and go through all the complexity of all the ways that you can craft partnership agreements or shareholder agreements.

9:43Because it feels like a drag when we're so psyched about this partnership and coming together and building a thing. I'm like, the agreements aren't there if it goes well. The agreements are for being there if it doesn't. It's in that vein to me. It's very much like, it's not a marriage contract. It's a prenup in case there's a divorce. Like it's not a partnership. I mean, sometimes it can help to have the partnership agreement just to clarify expectations about the partnership. But a lot of that stuff is – it's in the event of divorce part that no one really wants to think about going into a positive relationship.

10:20Like these things do happen. Exactly. It's an important conversation. And it's more acceptable in business to do the buy-sell agreements, the disillusion agreements up front than it is in a marriage doing the prenup. But that's exactly what we were doing. And as a result of that process, Sarah says, I don't think this is where I want to go, which is what can happen anytime somebody starts doing interior work. I had this happen on my staff all the time where I encourage people to do the interior work. I encourage, of course, financial planners to do their interior work. And they would come out with, you know what?

11:02I've discovered I don't want to be a financial planner. So it's – So Sarah goes – like you start going through with a therapist to talk about all the issues that can come up with succession. and Sarah's conclusion at the end of therapy was, I'm actually realizing I don't want to buy into this first. Yes. Okay, so how disappointing was that? Huge, right? Like, where was this in the process? How far in are you in going down the succession road with Sarah at this point? Oh, we're several years, you know, at this point where this started surfacing. So it wasn't like, oh, I woke up last night and I don't want to do this.

11:47It was a long, thoughtful, introspective process. And so my reaction was much reaction when somebody on my staff would go, you know what? I decided this is not what I want to do. It's like, oh, man, I am so sad. And I'm so happy for you. And I'm happy for us because the worst thing to do would be to continue to work here, continue in this profession. When it really was out of obligation, fear, whatever it might be, right? Fair point. If at the end of the day, her heart was not in succession and taking over this firm and running it and doing the things in the future, it very likely only would have been worse had this not gotten surfaced at this stage.

12:33And instead gotten surfaced as partnership dysfunctions afterwards, necessitating said earlier discussion about partnership divorce. paperwork. So I guess like good news, headed off words, problem, bad news. We were years into this already expecting this was this accession plan. The sunk costs were, were felt significant. So she decided to leave. And I will say we have a great relationship today. I had coffee with her this morning and she's doing great in her practice as a financial therapist. It was the right call for her. She didn't even stay directly on the planning side. She opened up financial therapy.

13:16Okay. Timing was great. Maybe around 2020 ish, the demand for therapists was out of sight and she's very successful today. So it was the right call. So that was, that was failed succession attempt number one. And Michael, I've been to all the succession planning workshops, workshops, three-day workshops. I've attended succession planning at every industry, convention, retreat, conference there is. And so I knew you start 10 years ahead of the time that you want to retire, you think you might retire. So this was part of my 10-year window. And I thought, okay, this is going to plan. When did this happen?

14:02I guess it's relative to when you joined us 10 years ago like it probably happened shortly thereafter was kind of in process because sarah had been with me three or four years when we talked okay so it was probably in development maybe about that time okay so you like frustrating because you thought you were on the track, but there are still 10-ish years left for you to pick up and go to version number two and play this out. Yeah. And even if you started the clock 10 years ago from when we talked, so maybe all that happened three or four years into it, I had to regroup. It's like, yeah, yep, this is the blow up.

14:50This is going according to plan. This is why you start early. Okay. Okay. So I continued with the staff I had. I had in 20 – I brought on – Nathan Guerin joined us from Florida, and we became a hybrid. We became a hybrid firm before hybrid was cool, before the pandemic. Hybrid work environment. That's right. Hybrid remote work, not hybrid brokerage RA. Thank you. So I thought you had some deep, deep roots on the fee only side. Okay. Hybrid, hybrid, in-person virtual pre-pandemic when not a lot of us did this. Exactly. I was like, I can't have somebody in Florida meeting with my clients in Rapid City.

15:38Are you kidding me? No client is going to sit still for that. Well, I was wrong. One of my study group people said, oh, so you're going to turn him down because it won't work? I said, that's right. Yeah. Oh, that's good to know. we've been doing that for eight years. I kind of changed my mind. So Nathan came on and highly skilled planner. Allison had been with me at that time, maybe around 10 years and always wanted equity. And so I'm looking at the two of them and Allison was pretty brilliant at running the firm and she was operations. And this is kind of still back in the day, Michael, when, you don't sell your operations person equity.

16:22An operations person doesn't become a partner. And I thought, you know, I think it would make a lot of sense for her to become a partner. And Nathan was open to that. He wanted to be part of a team ownership. I looked at one time, Michael, at selling a little bit to everybody. Let everybody have one or two percent. I played with that a lot. It fit into the holocratic culture that I had built, which is more of a purpose-driven culture, which is more of a, it's not corporate in structure. It's more circles of responsibility. And it fit into that ownership of your role on steroids, be an owner. But I could never really pull the trigger on it and make it work within the legal framework and all of the complications.

17:17Was the idea of doing this because you wanted to start doing small slices of equity to others to begin like the transition of equity or just because it's a like retention engagement? We want to keep them on board. Both. Okay. Yep. Okay. It fit with my management style. I do not like micromanaging. It's one reason that I adopted Holacracy and gave people a lot more liberty to direct their roles and make decisions. I've just never been a manager that loves holding people accountable and doing that. So it was both retention and a way of potential succession. And what was the blocking point that made this not work for you?

18:13It was sitting down with, okay, how are we legally going to do all this? And some saying, you know, really you should be giving phantom shares and other research saying, oh, people really don't respond that great to phantom shares. And just all of the complexity in making that happen was the stopping point of establishing everybody. And we even looked at that as early as a couple of years ago, Nathan and I, kind of reviving that idea that once you've been here, you're going to be able to buy in one, two or three percent, something of that sort. But it's a heavy lift. It's easy to talk about, but it's a heavy lift to put into motion.

18:56So I went down the path of selling 10 % of the company each to Nathan and Allison. So Nathan is the other lead advisor and Allison is in charge of operations at this point? Correct. And I think it was January of 2023 that that deal was inked. So we're trying to start shifting a material slice of equity. How did you navigate all of the valuation, financing, those types of dynamics? It sounds like this was a, they got to buy, it wasn't a grant. So how did this work? Yeah. It was pretty, it was pretty ubiquitous. I think I had FT transitions work on it. It was, I think they put 10 % down and then I financed the 90%, you know, on a seven, 10 year note.

20:09um all the payments came from the dividends i mean it was a sweetheart sweetheart deal okay and you just ran with whatever valuation fp transition says is appropriate here ran with their valuation to the extent that i use their cash bet to establish my price okay which was probably closer to 1.5 ish okay maybe two ish i don't know but but it was on the cash price so you know it was a good deal and i wanted it to be a good deal but you've if they're going to buy more in the future at some point you have to at least seed the buying power initially to get the flywheel going yeah yeah and i i wanted to uh to reward them um so i i think it was um i think it was kind of a normal uh way to sell and it was non-recourse so i mean it was kind of one of those things is if you had the 10%, how could you, how could you say no?

21:12Right. Yeah. I guess. So at worst, if it doesn't go on, they can't make the payments. Your, your only recourse is you get the shares back that you were trying to sell in the first place. And we're right back where we started. Exactly. So that, that kind of, that was being developed in the middle of the pandemic, which again, I talk about the black swans in my journey and the pandemic was the first black salon that changed a lot of things for me. I talked about already being a hybrid firm as far as having some virtual. Well, we went very hybrid during the pandemic. And that started this pattern.

21:53We had planners. I've always had a really nice stream of potential planners that have reached out to me and wanted to be associated. And so now it's like, wow, you don't have to be here to be a planner. It used to be the joke at FPA retreat that I would stand up and say, and by the way, I'm looking for a planner. And they're like, Rick, you are always looking for a planner. Oh, I remember this over the years. She's like, I'm looking for a planner and people are like, oh, that person's hiring. Let's go talk to me. You're like, yeah, you have to move to. You have to move to Rapid City, South Dakota.

22:30Uh, okay. That wasn't a planned life transition. Exactly. Caleb Brown once said, Rick, if you were in Boulder, I'd have a line out the door, but Rapid City, South Dakota, and I actually paid for his trip to come up and fly fish here so he could actually see that the place exists. And it's a lot like Boulder. The boat is absolutely beautiful. It absolutely is. So now we could hire virtually. Well, I started hiring planners virtually and I got into, I should say, I realized that my unique genius is not being a manager or necessarily running a business. Yes, I kind of happened to run a business successfully.

23:13I'm not sure how that happened. At my heart, I'm a planner. I'm client facing. I'm the typical e-myth guy. okay yeah and so i had four planners come on during this time let's say between 23 and 20 26 that all had the average lifespan of 18 months okay so we started having a revolving door of planners what was causing it's a good question michael i can go back to each one I can say, well, this happened or that happened. I can't, you know, in some cases it was wanting more money because now we're playing to a national pay scale, not the Rapid City, South Dakota pay scale. In other cases, it was competence.

24:08I mean, I tested people. I gave people an average of six to seven personality tests, the DIS, the Emergenetics, the Enneagram, a host of Myers-Briggs. And if they all lined up, if they were like, this is a rock star, the chances are still about 50 % at best that things will work out. So I think part of it was the challenge of running virtual relationships. Nathan once said, who still works for the firm, you know, the problem with being virtual is you're not part of the hallway discussions. And so it's a whole different dynamic of bringing people in and just where those insights can happen when you're together having a cup of coffee.

24:57I think that may have been a bigger challenge than anything. So we had that going on where we have this rotation of planners. We didn't lose any clients over that, but it kind of started some instability in the firm. It wasn't that this person has worked here five years or 16 years or eight years like a lot of my staff had, which was still in progress when Nathan and Allison bought in. And so for three months, things went swimmingly. I was like, yes, I've got my successors in place. They're great, competent people. I can just focus on turning things over and teaching them a little bit more on how to run things.

25:51And was the idea when they did the 10 % each that this was like first of more purchases to come? We are succession planning, like you two may be the ones that take all of this eventually. Yes, that was the intent. There was nothing – there's nothing signed. There was no intention to sell tranches. It was let's do this. Let's see how it goes. Okay. Okay. At least the expectation goal was like, this isn't meant to be a once and done, and we're going to go find someone else for the other 80%. Correct. We're hoping that this is the plan. Yes. If this is going well, we'll do more deals, and eventually you'll own all of the firm.

26:34Absolutely. Okay. Now, one thing we didn't do, Michael, is we didn't do any counseling. Okay. Okay. So I got asked, I'll seriously, is that a, because last time we did this, it did not end in a design? Maybe some conscious says like, no, no. We don't want to do that. I got bacteria pneumonia in January 23, right after I sold to them. I was really out of commission for two months. And, you know, the pandemic was, quote, getting over at that time. So it was ironic that it was certifiably a bacterial pneumonia. And I was just getting over it in April-ish. And in April of that year, Allison calls and says, you know what?

27:25I'm being headhunted. And they're offering me a really great salary. and I don't think I'm going to take it, but I just wanted you to know. With 30 days, she accepted that offer. That was the biggest blind side of my career. I was devastated um i was confused it just laid me flat because the whole idea was we just did an equity purchase to literally make this not exactly we just did this agreement and she didn't see it coming any more than i saw it as i said she didn't go looking for anything but she was headed. She really wasn't looking. Just when calls come in, it happens. Came in and it was two, three times the salary she got.

28:32And she obviously didn't see the benefit of being an owner versus getting two to three times the salary. And this was by a big wire house firm that can pay the big salaries, right? And unlike a lot of planners that work in this space, and this space meaning certainly life planning, it's more of a, it's a calling. It's, I mean, how many financial planners are working for far less than what they could get from a Wall Street firm? Because it's important to me to be making a difference in the lives of people and a real heartfelt difference. It's not uncommon to me for planners to be headhunted. And in the past, Nathan said, yeah, I probably get often calls and for more money.

29:25And that's not what I want to do. I don't want to be a hunter gatherer. I want to make a difference in people's lives. Well, you know, when you're in operations, I don't know that you can expect as much. when somebody is in operations and they get an offer two or three times. So I can't fault that. If I can fault anything, it was my inability to present or make the case for the value of ownership. But nevertheless, we had to undo everything four months later. We were in the middle of a transition to Schwab, a transition out of WorldDocs, and another software transition at that time. Three major transitions.

30:12And we had a young lady kind of pick that up and run with that. And it was a hellacious six months of trying to hold everything together when a partner of 16 years, I mean, 16 years she worked for us, leaves. And she left in the best of ways. She gave us two months time, had coffee, you know, after that fact several times. We're still on good terms. And yet it was just devastating to the staff. In fact, a lot of the operations staff threatened to quit with her because they couldn't see how would life be without her. Did you actually lose more operations staff? I didn't. Were you able to keep them on board?

31:01I threw money at them. Okay. We do what we need to do. You know, it's a factor. It raises for everyone to cover down for the fact that Allison is leaving and everyone's going to need to chip with them. Somebody else said, you know, I've really wanted to go home and be with my family. And I'm like, please hang in there. So I did give some significant raises to the. As a temporary coverage and transition or just as a permanent. It was permanent. Okay. It was permanent to keep them on board because I, my focus, I can't, my focus wasn't on the bottom line. And I say that and I do not want to impart that profitability wasn't important.

31:48It was very important. And it's not uncommon for me to have to invest and hurt the bottom line to get ready for growth or to prepare to cover things so that the damage doesn't get worse. So I made those decisions. and we did dig out after six seven months i got covid in june of 23 so i just like we're like three months after getting over bacterial pneumonia yeah 23 about five months and a couple months after allison gave her her notice and before she actually left i had covid and i developed long COVID, brain fog, lightheadedness, fatigue, that is still with me to this day. So on top of all this, another black swan of just my own health and parents, four parents in their 90s, all in failing health, my wife having to close her business to take care them, all the stress on a partnership that comes when she's spending 43 hours a week taking care of elderly parents.

33:08And I'm just giving this as context as this was just a hellacious time of trying to stay afloat. And I looked into my succession planning material and there's nothing in it how to get through this. So Nathan and I decided we need to come up with a plan. Nathan was really clear. He didn't want to take the firm by himself. Never did. So he was still on board. He was still not to be on a solo success. Yes. He was still an owner in the firm. Okay. And so we hired, again, we hired a succession planner, Brooklyn Brock and Tiffany Lee, Elevate. And we started working through it very methodically, very intentionally, looking at all of the issues.

33:58We had charts. We had here's our must-haves. Here's our hope-to-haves. I mean, we were doing the work. Who within the firm could we identify as a potential successor? Should we sell a little bit to everybody? I mean, we were just looking at all of the possibilities during this period of time. During this period of time, we had identified, number one, we want an internal sale if it all possible. Okay. Number two, if that's not possible, we want to bring on a managing partner, kind of to take Allison's place, because we knew the managing partner wouldn't be me. It needed to be like a GM of sorts.

34:50And maybe somebody with, well, hopefully somebody with some equity desire. But that's kind of like saying, well, we're going to go out and look for a spouse. Right. You know, that's a search. Hard to find. That's a search. That was number two. Number three on our list was a merger with a like kind company. We made a couple of inquiries, but they really didn't go anywhere. And number four on the list was a roll-up. That was the last thing that we wanted. So we were really clear, really intentional about what we wanted. Wait, so how did you then rank these or weight these overall? Well, we had a weighting to each.

35:38Like I think internal might have been an 80. uh a managing partner might have been a 71 a merger might have been a 65 a roll-up might have been a 50 okay so we we had done the work in ranking all of these so that we're really clear we had touch okay we had touchstones as to our like our top five must-haves like it has to be fee only it would be one right um so we had we had that so we i mean we were doing it right yeah we were following michael kitsis advice i think yeah so what happened so i guess just what happened as you try out these these roads i guess what did you even try next like do you start building towards internal do you start marriage hunting for a managing partner Are you calling a bunch of like kind firms to see who might be interested?

36:38Are you doing a little bit of each? Like what did you do? A little bit of each. Okay. Still with the understanding. It's like I just recently sold a building and oftentimes a commercial building. My touchstone is I'll put it up for lease or I'll put it up for sale and whichever comes first wins. Okay. It was something of the same attitude that we're not going to just close down anything, but we're going to put most emphasis on the internal sale. We had a couple of people earmarked for an internal sale. They failed to show a lot of interest in it. We floated it to a couple. And while we're doing that, I'm approached by my accountant.

37:23This would have been in November of 24, who said, you know, we're looking for an IRA. We're either going to start it ourselves or buy one. He's been my accountant for nine years. The guy's brilliant. I call him a little Michael Kitsis. I appreciate that. He has a list of stuff behind his name. He passed the CPA exam at 16. I mean, he's just brilliant. So they want to buy or build an IRA business. I'm assuming this is local? like they're actually in the Rapid City area. Yep. Yep. Local here. Okay. And he went from himself to a firm of 30 in the course of nine years. And so we started talking and I said, well, you know, okay, we'll explore it.

38:11I had talked to a one other firm in town that I just, that approached me and I'm like, no, he says, why are you so hung up on fee only? And I just couldn't see our cultures. matching like for someone who's been involved in that for like 40 years well i was doing you i'm just like if if he asked to ask he probably doesn't get it for i was doing fee only planning before napfa was formed so so we started talking and and having coffee and i'm like and they wanted to move quick they had urgency like we're gonna do this well it's november 2024 for tax firms like you have two months to get this deal done because then we're going to vanish for tax season.

38:58And their clientele was typically a lot out of South Dakota, a lot of high net worth people. They were running into the Goldman Sachs all the time and just not happy with what they saw, their clients, the service they were getting in the investment advisory area. And they said, Why don't we bring our integrity to the table and do this ourselves for clients rather than watching them being in their term taken advantage of in so many situations? So I appreciated that, their look, but they did have this urgency. And I'm just like, you dudes, I'm not ready to retire. Nothing is on fire here. um so we were moving through this and then uh march 1st of 20 a what i would call the fourth black swan hit and i had just come home from two weeks of retreat and by that i mean personal retreats therapeutic retreats things like this i'm just in this wonderful space uh-huh monday morning i walk into the office the first person into my office was rose she says rick she and rose is a death doula to give you an idea how comfortable she can be with difficult conversations she was a cfp trained death doula just an amazing wow uh financial life planner.

40:37She didn't hold herself out to be a financial therapist, but she fit the mold. And this is the type of person, it's like, this is the type of person I want to associate with here. And she says, you know, and she'd been with me a year. She says, I'm going to have to leave. You know, my mom is, I need to be with her. And from the beginning, she was like, how can I plan for people who are in the process of dying. That was her calling, was to help people in that space. And I'm like, well, let's see if we can make that happen. But she gave her notice and that broke my heart. So was she a longer term team member or one of the folks in the, were hiring virtually, but having trouble getting them to stay?

41:29Yes, she was in both. She came in and trained with us in person for three to six months. And then she went virtual. She was out of Montana and Colorado at the time. And I use Rose's name because she was in the audience when I gave the keynote to Shift. And we're really good friends and she's a great person. but to me she was kind of the future she was one of those that were like you know she could be a great owner oh so she was one you had like mentally that we had another person yep and that was the reason that there was resistance from her like yeah well let me think about it and hour one hour later nathan comes in and says rick i just want you to know i'm being headhunted by a very large multi-billion dollar firm.

42:24Okay. This is concerning because we went through this once before. A little PTSD, you think? Yeah. So Allison's script is now playing. Oh my God. I was laid flat. I mean, I'm just, my head is spinning because what? We had, not including me, six FTEs, maybe seven FTEs. This is two thirds of the firm. and my current partner and another planner that's, that's the heart of the firm. And I mean, it was, it was just as stunning as you get a call and says, your spouse has been killed in a traffic accident. Wow. Wow. And I remember going into the office of the lady that took over it from Alison saying, I'm done.

43:17I'm done. It's like, how am I going to get ready? And both of them, I mean, Nathan wasn't gone. He just told me he's being headhunted and he's waiting for an offer. And Rose, I think she gave two or three months notice. So nobody walked out. Very good of them. Like those are gracious transitions. They're gracious. And it's something that it's an expectation I asked when I hired somebody like here, let's talk a little bit about the divorce. When you get ready to leave, I would really like you to make as much of a commitment as you can that you'd give me two months. Because I have had, when I was a sole practitioner, I needed two months for the person going out to train the person coming in.

44:08And I was very successful in making that happen in 80 % of the cases. So this wasn't unusual. I've just hired great people over the year. I really have. And but to me, it's done. How am I going to dig out of this hole? And so I said, wow, I've got a buyer. I'll call it a gray swan or a white swan in the wings that I told them this. Listen, you probably need to know that I have two really key people leaving and how does that impact your wanting to continue to have discussions? They're like, yeah, not much. And I was like, hmm, OK. Fascinating. I might have expected them to be more concerned, but hey, it's their business.

45:03Yeah, it's kind of like, well, OK, but we can we can pick up the slack. We can make it happen. And this is CPAs who envision, well, I just need someone else who's trained to prepare the return. Like that's not really how wealth management works. I think in retrospect, yes. Although the one, the one, the main buyer of that firm loves investments. He was managing a hundred million himself. And very, this is, this is the little Michael Kitsis and very brilliant, very brilliant. on investments and things so i said okay guys we can talk and and the reason i stress their urgency now i had an urgency that matched theirs so just so i'm trying to think of timeline so they they asked you in november 24 yep this was march of 25 okay so we're only like five or six months out.

46:04So I guess the conversation is still fresh. Yes. We're still exploring cultures and we're exploring values and we're doing all of the stuff you're supposed to do. And so we've had a lot of those conversations. I knew they were honest, reputable, integrity. Obviously he was my accountant. I really trust him and he was very brilliant. So I started going down that path with them like okay let's let's get more serious and we didn't have we had a very light structure discussion maybe in december like it would kind of look like this and we would kind of go with your appraised value and and it would be the preceding december like yes yes yeah exactly and okay we had an idea kind of a loose idea i'd carry back preferred stock and whatnot So we didn't get into hardcore financial discussions until April.

47:03So we've spent about 45 days there. Now, Elevate's still part of this, Brooklyn and Tiffany. So Elevate is the firm giving you consulting and guidance about succession. Correct. And so they're aware of this all along. They even did some sessions with the buyers. They kept me from jumping out of the first story window a couple of times. We hit some bumps. Ultimately, the value I got was a lot less than what FP transitions would say the three times, two and a half, three times. and I didn't have any other option. The one firm that had courted me and made me offers in the past, the roll-up, I reached out to them and their response was, well, Rick, we don't even think we're going to make you an offer.

48:01And the reason was my payroll was so heavy because now I'm ramping up. I hired three people in April, May, April, May of that year to prepare for Rose and Nathan leaving. Okay. Because I didn't know what was going to happen. Right. I'm in this liminal space. I've got to prepare to be running this thing, continue to be running this thing because this buyout may not happen. Right. So I couldn't stand by. So I really loaded up the payroll. Okay. But then you contact the roll-up and they say, great, send us your current books. And they look and say, we don't like the profitability. Come back in a year.

48:48Because you look too staff heavy. Yeah. Come back in a year, which you're not sure. I'm not sure there would be a year. So we moved through it with the accounting firm. We put it to the middle of May. I think it was the middle of May we inked it now an important all this got done in two two months oh yeah yeah yeah it was and we had been talking but yes it was I I was in a place yep um I've I had I need a safety net somewhere so was there an update through this about whether Nathan's head offer or like head hunting exploration was becoming an offer or is he still in limbo through this? So I'm at retreat and Nathan had set a date of May 1st to get a firm offer from these people or not.

49:45And Nathan is of the highest integrity, right? Super integrity to come to me and say, hey, I just want you to know, right? I mean, that's all you want in a partner. and so i remember i think i think i'm at the retreat dance and the lisa buoy is there and i get the call from nathan says i've i've decided to stay okay i'm blown away i am elated and did a happy dance because the only existing script on this was allison who came back 30 days later and It was not in my realm of possibility that he would stay. I've never had anybody headhunted that, you know, seriously considering something that didn't go.

50:35And there'd been others, but it just, and I remember Rose kept telling me, but he's not gone yet. Rose, look at reality. Come on. This is a multi-billion dollar firm. They're offering him far more than we can pay him. But when he added everything up, it all favored staying for him. But I was down the road a lot. Nathan also was super supportive of the new buyers, really liked it. He said, Rick, of all the transitions I've seen, and he'd seen a lot, this is like the best one I've ever seen. What made it so appealing or compelling from his perspective? It just felt like a really good match to local firms.

51:20These guys have great integrity, great intention, fee only. One of them is a CFP. He said of all the buyouts, the roll-ups, everything I've seen, the internal successions, I think this is a great option. So he was all on board with it. And that was such a huge relief that he stayed because it was going to be rough without him. And, but at the same time, the fact that he was staying did not change your mind to say, okay, then maybe my, maybe I don't need to do something like imminently here if he's not actually leaving imminently. Like this didn't put you back to the market for other paths. No, it didn't.

52:05And where I was with Elevate and with Nathan and our discussions, it was that this is a good way to go. There was a lot of support for that. And it still, with Nathan staying, didn't solve the problem. I mean, if I didn't sell, it didn't solve the problem because we're still having to deal with this succession. But I've been two months in this place of gearing up, getting ready to do something to save the company. So the wheels were pretty much in motion at that time. So we went ahead. We did the deal. The fifth black swan was three days before closing. they walked the operations director that took over for Allison out the door because they just didn't feel that they could that they wanted to we did a sale of the company to a new company and they didn't want to give an offer letter to someone that they said you know I just don't don't think she fits okay um that that was shocking to me just it was another bombshell when I got that call, we got to walk this person out the door.

53:21Even though technically the deal hasn't. The deal hadn't been done. It was three days from closing, but they're like, we got to get offer letters out and this has got to happen. That feels strange to me. I mean, I get we're not giving an offer letter. And when we close on the deal, this person will no longer have employment because their old firm is going away and we're not giving an offer letter for the new firm but the the like and we don't own it yet but we walk them out feels just odd from from their perspective um um i guess once you don't get the offer letter you know she was not happy she was not happy at the firm i knew that Yeah.

54:08We had some more. Pre-deal. Pre-deal. Yeah. Okay. I mean, that was going on. She was, she really wasn't happy. And yet I needed her. Others might have said, Hey, let's, you're not happy. We're not happy. Let's do the two month departure thing that I had done many, many times. At that particular time, things are in such a, a upheaval that we didn't, we couldn't bring in somebody else new. We got two people leaving. right so because rose is leaving and nathan is leaving you're still afraid nathan's leaving right so um they just said you know this is not a person we want on our team she's not happy and we don't want to give her an offer letter and then have to to let her go two weeks later that's not in an integrity and i'm like okay i i get all right i get that unfortunately they didn't know what she did and they didn't know the depth of knowledge that she did and it just opened up a hellacious transition for a good six months of trying to to fill all the holes that were left by her immediate departure so that and then because no one else was back trained into her role and what she did, which makes it hard.

55:32And then it's harder because you're doing all the actual acquisition, transition-y things that have to get done. I mean, we already have a very new staff. That was unfortunate. And of course, you know to back train, you know to cross train people. And yet with the progression and the speed of everything happened, there comes a time that there's no back training. There's no cross training. So that led up to closing. Those were the five black swans that I didn't see coming. And I don't think anybody could have prepared for it. I keep going over what could I have done differently? Well, I couldn't have done the pandemic differently.

56:17I couldn't have done getting pneumonia and COVID differently. I couldn't have done my my partner being headhunted differently um i i couldn't have done rose and nathan differently i mean you know it's just like wow and that's what a lot of succession planning doesn't talk about is you know here's how things ought to go and they for reasons beyond your control may not go that way and so and so when i look at this from the overall arc uh right the original vision when we started down this path 10 years ago was sarah's been with us for several years she's expressed interest in being the successor we're going down this path and where we ended up was we couldn't get to internal succession and so we ended out in a deal with an accounting firm that was in the area instead.

57:22I guess an external buyer, but not of the PEO or variety. It fell into that third category of merger, even though it wasn't a merger, technically. And the timeline was driven by Rose and particularly the risk that Nathan is leaving. and then you're losing a key advisor and all of the clients and equity are coming back your way, which was the opposite of the goal. And the fact, you know, you talked about when we started, then when I lost five out of six people in 45 days or so, I had the resilience to build the firm back. Yep. I didn't have the resilience to do that physically and emotionally. So that was a big difference of when I said, I'm done.

58:21And thank God, I had all sorts of support in my life to help me through this, which would be my biggest message to anybody getting ready to look at succession. would be to absolutely get a therapist in your back pocket long before you think you need it. And I didn't have just one. I had business coaches and Enneagram coaches and supervisors and Elevate and a therapist. I had a couple groups locally. I had a lot of support built in. And that was so key in getting me through this process that words couldn't express enough how important that safety net was. So what was different about having the resilience then and not feeling like you were in a place for it this time?

59:26What was different was, you know, physically, I still have long COVID during this time. I still have brain fog. I still have fatigue. I still have lightheadedness. um emotionally like we talked about just having the ptsd of here we go again um and i just um i'm so tired of it i'm tired of the 18 month window on planners because rose was the last of of that that series um it was just it was just a whole bunch of things piled on that just said, I just don't have the fortitude to start doing stuff that I haven't done for 20 years to get back into running the plans and doing the data. I mean, just everything that would require in the trenches along with the operations.

1:00:32and yes you can hire people and I had hired people but my god how much institutional knowledge had we lost or were we losing it was like quite out of seven people only Nathan was the longest person there at five years and then you went down to a couple years so Rick then bring us forward today? I mean, we're like a little more than a year out from the deal. So how did this go relative to your expectations as the place you ended up in this succession journey? Yeah. So it's gone according to plan since closing. And I say that with a smile on my face because in succession planning training, right?

1:01:22You start 10 years ahead of time to cover the the blowups. And then you're trained that the first six months is probably going to be hell. Right. I just, everything changes. Right. Particularly when you're running your own business for decades, like everything changes. And it can be very hard. And anybody that I've known, especially that has done a rollup, just hates life for six months and all the new systems and everything. So it has been hell for me. There's been lots of changes, lots of things I didn't see coming. And that's part of what is expected. There's somebody I'm on a panel with coming up that says of the 200 transitions he's done with founders, he's had two that were happy with them.

1:02:14We founders are a unique breed. You try to turn us back into employees. Exactly. You know, I'm a maverick. I was in business for myself. I've never, the biggest corporation, the only corporation I've ever worked for was McDonald's. And I'm going to assume that was a good ways back. Yeah, yeah. I think I was 18, 16, 16 it was. So I'm a thought leader. I'm an innovator. I'm a pioneer. And unfortunately, that hasn't stopped much to the chagrin of my new partners. And I just don't fit the corporate mold. And so we're still negotiating that as how does life look when you've got this wild horse maverick that you're trying to keyhole into this corporate structure.

1:03:13And it's probably even more so because I had this holocratic structure that's very different. Very few firms follow it. For those who aren't familiar, just can you explain more of? holacracy in that structure? Yeah, holacracy is purpose-driven, so it's kind of a ground-up structure. Instead of departments, instead of a corporate tree, you have more circles. You refer to them as a financial planning circle or the accounting circle. And within those, you have roles, and the roles take on a lot of responsibility. It's very well organized. You all the roles are responsible for. But there are no middle managers.

1:04:03There's no managers. It's purpose-driven. The people at the bottom get to sense into what is needed rather than the people at the top. The problem with holacracy is that only about 20 % of the workforce can can flourish in it can work because it takes a higher degree of self-awareness than what most people are comfortable with most people really do want a manager and want somebody giving them guidance and direction and it's not that it's direct but it really appeals to the person that has a high EQ and wants to take on a lot of responsibility and is okay with that. So that's one of the problems of our revolving door is we lost a lot of the holacracy culture because people were so new.

1:05:03It has a high learning curve or like juncture was. It's a high learning curve. And so we lost that culture. So now we're poured into a typical corporate culture. And boy, that doesn't work for me. Out of curiosity, is that better or worse for the rest of the team? I think because the rest of the team was so new, with the exception of Nathan, I think it works just fine for them. because they hadn't really intuited, integrated, embodied holacracy. Nathan had, and yet Nathan is an amazingly adaptive guy. Flies at a high conceptual level. He's made that transition just fine. Take me back a moment in the deal that got done with the accounting firm.

1:06:09So I guess I'm realizing I'm not clear what the structure intention was as it pertains to you. Was this sell and wind down, they give you dollars with some contingencies and then you're out? Was this a sell and stay because you were planning to still keep doing advising things longer or you just wanted to solve for the ownership? Did you get cash? Are you now an owner in an accounting firm? What was the structure and intention of this? It was a sell and stay. I had no intention to retire. The idea is that I would be involved in helping them in leadership, that I would continue to work with a small number of clients and that I could now be free to be me and just work on all the projects that I'm working on, especially in financial therapy and my writing, my podcasting, things of that type.

1:07:10So that was the intention. We didn't ink in a hard salary. And it has come out. I'm not in leadership. And that's due to the, they use EOS as their operating system. Yep. And in EOS, you've got to LMA it. That's leadership management and accountability. That's the part you don't like. Oh, duh. And I'm like, no, I'm a visionary. Well, there's the visionary part of EOS doesn't have to LMA, but that was filled by the new person that had the majority interest. I retained or I got 25 % interest in the new company. So I'm still a partner, but I'm not managing. I'm not the controlling partner. Okay. And there's so many things that I was loathe to do that.

1:08:15I knew they wanted to do that kind of at the get-go. And I'm like, eh, I don't think that works. So you're a partner in the blended accounting advisory. It's not. No, they didn't blend. they couldn't blend the accounting firm because I'm not a CPA. Oh, okay. So, so. So we just have a new subsidiary and the accounting firm owns a piece of the subsidiary and you own a piece of the two partners that own the accounting firm own a piece of the new company. So they call the shots. That's one thing that I, I was resistant, very resistant to because they had no time to really learn the business and come along.

1:08:59The idea was this was going to be a slow transition and it's been anything but a slow transition. So, but I have to remind myself, this was the white swan on the table. This was the option between doing all of this myself and rebuilding. There wasn't really a middle option. So I guess for better or worse, the flip side is because they do the LMA under EOS to the extent you've got team and hiring and all these other issues. Like that's their problem. They run it now. And so that really excludes me from leadership of having anything to do or say in what's happening. Very unusual place for me. very unusual.

1:09:54So it's probably a little more exacerbated than quote normally only because holacracy was so different. And so the idea, so I'm inferring, so a part of the deal was cash that you got out for going from the bulk of the ownership to 25%, but you left some chips on the table as it were because you still you don't want to retire and you want to keep going so you wanted to right and stay a partial owner just like with my previous partners i financed most of it okay so it was a relatively sweet deal for them uh on on many fronts um so they're they're very focused on on the bottom line well i'm glad they're very focused on the bottom line because I got a significant investment in them, right?

1:10:49So it's kind of strange for me because they're not baked in financial life planning. They kind of have an idea about what it is. It's appealing to them. And yet it's all very corporate, very structured, very focused on that bottom line, very focused on deliverables. I mean, I didn't hold people accountable to the tune that they're doing. So I think they're going to be very successful. Most financial planning firms are run this way. Yeah. Right? So, and I want them to be successful, obviously. It's just that I am still a maverick and I want to do lots of stuff in the financial therapy area. And I think we got some things that I've run on to that are at the same place financial therapy was in 2003.

1:11:42that, uh, are very exciting. So, um, we're, we're continuing to work out how does that look? So as you reflect on this journey, like what are the, it's like takeaways in retrospect for the, the whole arc of this progression over 10 years and how it's played out? Yeah, I think the most important thing is understanding the emotional resilience that I was going to need to get through this time. A, B, understanding. It's hard to understand that black swans could appear because they're inherently, you can't plan for them, right? Yeah. And the only way I can think of that I planned for this was in the emotional support I had baked into my life in supporting my inner life and having those places because it was so important to be coming back and getting the perspective and perspective from other folks and helping me to really understand the touchstones and coming back and coming back and coming back.

1:13:00to that. And my message would be, don't wait until the black swan happens. Don't wait till things fall apart and go, oh, I think I better go get some help. Okay. Yep. That's huge. Another thing is just knowing what your non-negotiables are going into a deal. and also knowing whether you've got the financial position to hold them. For example, my non-negotiables probably cost me$1 to$2 million. So what were those for you? Well, it was that a person comes on that's fee only and that my current staff would be taken care of and that the culture would be maintained. I mean, I could have rolled up months before all this, right?

1:13:56I could have rolled up right after Allison left. I would have made a lot more money rolling up then. And at that time, a non-negotiable was, no, I don't want to roll up. I want to do an internal sale. I want to take care of my people and I want to take care of my clients. And we, you and I know all of the horror stories out there about rolling up where neither get taken care of. And you still had an expectation or a path then that Nathan plus someone else could still be future internal successors to make this work. Yes, Nathan et al. So that was a takeaway. a lot of cultures what I learned is my culture looked resilient right up until the time it wasn't and overestimating the resiliency of that cost that culture overestimating the fact that it can be really hard to re-establish a culture when you have the the type of turnover that I had during the pandemic and how that could kind of weaken things so concern about culture resiliency, that's not in the deal to the accounting firm.

1:15:13That's in the speed bumps as you had turnover challenges through COVID and went more virtual. Right. And in the deal with the accounting firm, we talked a lot about holacracy and we talked about it enough to know it's not going to survive. They are not going to adopt it. We talked about waiting for one to two years before they did away with it. And it was really more like two or three months. But there was nothing hard and fast in that. I knew it would not survive. That was clear to me. And I think another really big takeaway for me is my legacy is not my practice. My legacy is not passing on a practice that continues with my values and the culture that I established.

1:16:14And this came, as I'm working through this in the retrospection of, I think so many founders think that's their legacy. Is their company continuing with the same values? I made this thing and it continues. This is my baby. And it doesn't. It didn't. It didn't for me. Now, there could be some argument to that, but no, it really didn't. And it was the realization that my legacy is in the lives that I touched in the 40, 45 years that I was in practice. All of the clients that I helped make super decisions that made a difference in their lives. the planners. I mean, gee, everybody that has come through my company, I'm friends with, I still get emails from.

1:17:10The other day, another one of those planners that left like, hey, I want to put this on your radar. They're doing amazing things.

1:17:16Rick Kahler: I hired rock stars, Michael. and um uh that's more of my legacy than the company surviving me and that's that's been a bitter pill to swallow but it's it has it's helped understanding that that that's really what i'm passing on so what i mean of all the things you had a lot of black swans what what surprised you the most about this succession journey? Well, I think it's the, I think it was losing, losing my partner of, of three, four months. That was huge. Who would become a partner after 16 years with. Right, right, right. That was huge. And then the, the double resignation of Rose and Nathan, my other partner.

1:18:10And again, underscoring, he didn't leave. Highest integrity. It was my response that said, he's gone. And that was the final blow. And I guess sort of a disturbing, challenging corollary thing for a lot of us as founders who think about equity, that's like equity wasn't doing a lot to inoculate against headhunting. sure wasn't hey i mean it reminds you had said at one point right they they didn't seem to value the equity at least at that point in the in the way that that you did it it does remind me just of some version of was it the the psych research just calls it the endowment effect yeah we we we value much more something we're letting go of than like the the person who's who's getting it receiving it on the other end uh the fun label this is the ikea effect right like you you'll never pry my ikea furniture out of my hands because i i built that with my hands i'm very vested interest in my ikea furniture uh yeah there is like this interesting phenomenon that you know we as founder owners get very particular about the value of our equity and what it means to own it and not everybody else actually has that mindset.

1:19:32And we look at the blood, sweat, and tears we've put into it and all the struggle that we've put into it. And, you know, we've read and talked a lot about the G2, that it's a whole different ballgame for them. It's viewed much, much different. And I will say that Nathan valued his equity in it. And in this whole process, He was bought out of his shares and he did very nicely. He was rewarded very nicely for that. And he was very appreciative of that. And he knew that part of getting a higher income was through ownership. So, you know, it wasn't completely lost. But yeah, we've got the emotional wounds of going through the building to where we look at it quite differently.

1:20:31So any other of, I was thinking pearls of wisdom, the like, what do you know now that you would go back and tell you 10 years ago when it turned out it wasn't working out? Michael, I've asked myself that question. And in fact, I think I was having a discussion with one of my current partners. And I said, you know what, if I knew now, like not being part of leadership, if I knew then what I knew now, I wouldn't have done anything differently. And I keep coming back to that when I looked at with it with Sarah. And I mean, I made a lot of really good moves. I can't think of just one thing where I said, wow, you really blew it there, Rick.

1:21:30And I think that's the pearl of wisdom is I've had people call me that they've heard about this and they say, oh, my God. If this can happen to Rick Kaler, it can happen to me. Well, I'm no genius, but I think that's the message is you can do everything right. And you cannot prepare for black swans. And I just, you could say maybe I got unlucky, where I got five of them, not just one. um but and to that i what i can say is thank god i had the support in my life that i did so i just can't i cannot land on one thing now there may be some people listening to this where it's just glaring oh my god ricky didn't see this and i would accept that there's a there's a blind spot of stuff I just did not see.

1:22:26And like I said, management was never my strong suit. So, but that's all yet to be determined, Michael. That's for the podcast 10 years from now. When I come back and say, God, Michael, I listened to that. I can't believe I didn't see this and that I did that. So any other advice you would give to other advisors who are thinking about their succession plan on a goals, desires, and thinking about their paths? I mean, I'm still struck by the, I think the list you framed up from Brooklyn Brock at Elevate on this, right? Like we can go internal. We can find a managing partner to take over, run this.

1:23:18We can hunt for a like-kind emerge or there's various aggregators. We can call and we'll give us some liquidity as a backstop or something. So other advice or perspective on this you give to advisors who are thinking about this path or maybe they're you 15 years ago and just starting to think, yeah, in a couple of years, I got to start this 10-year thing. Yep. Yeah. It's, it's in many ways, do what I did. Go to all the workshops, read the books, listen, listen to those that are experts in it. Start early, get a team in place, hire folks like Elevate and consultants that will help walk you through all of this.

1:24:14be very intentional and very aware in the steps get outside help spend time on the relationships of those that you're going to bring in to the practice and you know I didn't even follow my own advice there say I I'd worked with Nathan for a long time I'd worked with Allison but we didn't necessarily do some more in-depth consulting, maybe that would have brought out, maybe that would have brought out something that said, ah, you know what? I've asked for this, but I don't know that this is what I want. Or, you know, there could have been some things like that, but spend the time, spend the money to really get to know your partners or same thing with a roll-up, But I don't know.

1:25:07You know, with the roll-up, I can't give much advice. There's so many unhappy stories there, even when you're told everything that you think is right. But have a team advice. Definitely have consultants that have been through this succession journey before that are there supporting you. And we're not talking about a two, three, four-month engagement. We're talking about a one, two, or three-year engagement to really help you lay the foundation. So as we come to the end here, this is a podcast about success and just the theme often, that word means very different things to different people. And so you've run the entire business success journey arc from founding to growth to succession and transition.

1:25:55And so as the business has done its success journey, how do you define success for yourself personally at this point? Success for myself is, so much of this is so trite. It's really being true to my values and true to who I am. and for me having a place to express myself so I don't have to censor myself where I can be free to be me to be creative to be a pioneer to be a maverick to be a visionary right now that's successful that's being successful to create a container that can hold that I'm getting to the age, Michael, that success is being relevant, of still having something to say that's worth listening to, which is important.

1:26:52Many will say, well, Rick, you know, you have a legacy. You have success. You've been super successful. Look at all the lies you have touched. And that's true. That's true. But I'm not the type of person that can say, okay, I'll just bask in that for the rest of my life and just sit here. That is great. And it's, what is success today? What is success when I get up in the morning? What does that look like? And of course, you got financial success. Well, I've had financial success. I've had financial success apart from my company. I've said for years, I could give my company away and I'm just fine for retirement.

1:27:36So I've followed my own advice. I've walked the walk. So you've diversified out of the company over the years as well. Completely. I never even had an idea that my company would be worth anything. Well, for most of the history of advisory firms up to about 10 years ago, they weren't terribly saleable. Like you kind of hoped maybe someone would do a revenue split if you handed it off to them. Exactly. You got a partial rev share while you rode off from the sunset. that like the whole phenomenon, these are liquid, valuable enterprises is like a very, very new phenomenon. Exactly. And, and so I have a wonderful income that's coming in from the preferred shares I have.

1:28:16It's, it's been financially successful from that standpoint. But it's not the be all end all for my survival for the rest of my life. So, you know, I've had that success in following drinking the kool-aid eating my own cooking and following my advice but that's nice that provides a base to become really emotionally and spiritually successful which is the most important thing once you've got the physical needs taken care of well thank you Rick, for joining us again on the Financial Advisor Success Podcast. Thank you so much, Michael. It's an honor.

1:29:02Rick Kahler: Want even more ideas, tools, and resources on how to break through to the next level of success as a financial advisor? Check out the leading financial planning industry blog, Nerd's Eye View, at www.kitsis.com, where Michael covers the latest practice management trends and financial planning strategies. And by joining the members section, you can earn IMCA and CFP continuing education credits along with exclusive member content. Get it all now at www.kitsis.com.