Ep 513: The Path From (Unpaid) Intern To CEO Of A $3.4 Billion Advisory Firm with Neela Hummel

0:00Neela Hummel: Hey everyone, Michael Kitsis here. I'm jumping ahead of this week's Practice Management Podcast just to let all of you know that we have an upcoming Practice Management virtual event hosted on Kitsis.com. At our December 10th Financial Planning Value Summit, you'll get a chance to see real best practices and financial planning deliverables screen shared directly from fellow advisors, including some former guests of the Financial Advisor Success Podcast. Check out more about what you can learn and bring back to your practice at Kitsis.com slash value26. Again, that's kitsis.com slash value26.

0:57Michael Kitsis.

1:00Neela Hummel: Welcome, everyone. Welcome to the 513th episode of the Financial Advisor Success Podcast. My guest on today's podcast is Neela Hummel. Neela is the CEO of Abacus Wealth Partners, an RIA based in Santa Monica, California, that oversees$3.4 billion in assets under management for 1 ,550 client households. What's unique about Neela, though, is how she rose through the ranks of Abacus from starting as an unpaid intern to becoming CEO, giving her a valuable perspective on what it takes to build a successful career within the same firm. In this episode, we talk in depth about how Nila was initially attracted to the financial planning industry based on its ability to make a meaningful difference in clients' lives, even though she didn't have an academic background in financial planning, how Nila started gaining client-facing traction within her firm by offering value to more senior advisors, for example, by managing technology and taking notes during client meetings, and how Nila built the confidence to take the lead on client relationships herself at a relatively young age, in part by being responsive to client needs and leaning into her technical expertise.

2:01Neela Hummel: We also talk about how Nila made the jump to become a leader at the firm, first by learning how to juggle client and team management with the impetus to source new clients, how Nila later became the firm's chief of advisory services and started to help the firm's leadership professionalize the firm and its processes, and how Nila eventually became the co-CEO at the firm, finding that this two-person leadership structure was helpful in navigating major transitions for the firm and in her personal life. And be certain to listen to the end, where Neela shares her views on equity ownership and how Abacus is now entirely employee-owned, how Neela organizes her schedule to focus on being in high-impact meetings at set times during the week, allowing her to prioritize what's most important and meet both her professional and lifestyle goals, and how Neela has found that a sense of curiosity has supported her throughout her career and can be a key contributor to success for newer advisors.

2:50Neela Hummel: And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast with Neela Hummel.

2:59Neela Hummel: Welcome, Neela Hummel, to the Financial Advisor Success Podcast. Hi, Michael. Happy to be here. I'm really psyched to have you joining us today and to get to talk about the journey of following career paths through an advisory firm, literally all the way from intern to CEO, over the span of 15, 20 odd years. Because I find this whole phenomenon of having a career track at an advisory firm is kind of a new thing. For most of our history as a profession, as an emerging profession within an industry, there were basically only two types of people in firms, like producers who brought in the revenue and admin who helped keep the producers in the field to bring more revenue.

3:48Neela Hummel: And there was nothing in between. And so as an advisor, you either brought enough revenue to feed yourself or you just didn't survive and you moved on to something else. And if you did really well, then maybe someday you expanded and built a team. and that has changed so much over the past 20 years. I think very much driven by rise of AUM and now subscription models and just what you can do when you have recurring revenue and you can size up the advisory firm with staff paid from ongoing revenue and then provide ongoing services to clients and the whole thing gets bigger. Now there's advisor career paths where you don't bring in your own clients and operations teams and their career paths and investment teams and centralized planning teams and management career tracks and senior leadership.

4:30Neela Hummel: And the whole nature of building a career as an advisor to me is very much flipped upside down from get clients and if you get enough to survive, you can grow a team someday to join an advisory firm team and climb the career track there as it grows. And I know you have very much lived this path, Neela, from again, literally starting from intern all the way to CEO of a multi-billion dollar RIA. And so I'm excited to get to talk today about what this journey looks like that you have taken over nearly 20 years now and what you have learned along the way in how we can carve our career paths within the advisory world.

5:14Yeah, it's going to be a very interesting conversation. And it certainly wasn't laid out in the way that it might seem as we go through all the different phases. So I think as a starting point, tell us about the advisory firm as it exists today, just so we understand the context of where it is now. And then I want to throw the time machine back a decade or two and talk about what this

5:41Neela Hummel: journey has been in getting here. Okay. So Abacus Wealth Partners, we are about$3.4 billion under management. We have 68 employees. Something unique about us is probably about 60 % of our staff is fully remote. So we operate out of many different states, but we have strong office presence throughout the state of California, also in the Philadelphia area, and a few other areas that are growing. Okay. We manage about 1 ,550 client households and are about 27 advisors and four associates and a couple of paraplanners. And can I ask, where is revenue for the firm overall? Yeah, we're on track to be around$26 million by the end of the year.

6:32Neela Hummel: Okay. So helpful conflicts for the firm overall. And then I've kind of alluded earlier, but then your role, Neela, within the firm. Michael, how much time do you have? Do we have seven hours? Where are we now? We'll do, then we'll go back. But we'll start with where we are now, what it looks like today. Yeah. So LinkedIn actually helpfully reminded me that this is my 17th year here at Abacus. And I have held just about every job in the firm. So currently CEO, been in this seat for the last five years, about three and a half of that was with a co-CEO. And the last year and a half has been me solo.

7:18Before that, I was the chief of our advisory services. So I ran basically the entire advisory department. And before that, I was a relationship manager and ran a small team of advisors. and before that I was an advisor and before that I was our very first associate advisor before we called it an associate advisor and before that I just they they didn't even pay me to be here I just hung out I was an unpaid intern trying to figure out an unpaid intern excellent yeah excellent

7:55Neela Hummel: Excellent. All right. Now, take us back to early intern days. I guess maybe even one small step before that. What was your path into financial planning world in the first place? How did you land in this world? I'd say like so many people, it was totally accidental. I graduated with a degree in history and Spanish linguistics, which naturally foretold that I would be in finance, as you can imagine. Clearly, clearly. Clearly, because we really need to unpack, you know, the Mayan influence on the Spanish language in finance. But I was studying to be a lawyer. I graduated. I came from a really techie family.

8:42And so after college, I was actually working as a software engineer. I taught myself code and was toiling in a basement somewhere and studying for the LSATs. And then kind of had a crisis of confidence when I realized I didn't know any happy lawyers and was like, what am I doing? So I started doing a bunch of informational interviews to just understand what people's jobs were like. I literally made a spreadsheet. What do I like doing? What do I not want to do? And what do I not want to do involved toiling alone in a basement? And I started interviewing people. And one of the people that I interviewed was the co-founder of Abacus.

9:23And once I learned about it, I was like, wait a second, like you can sit on the same side of the table as your client. You can learn all this from a financial standpoint, but you're really actually putting your clients first. And I'd had a really pretty traumatic upbringing when it came to money from the non-fee-only side. So learning about the fee-only fiduciary business to me was just this light bulb of, oh my God, you can do well, you can help people in a way that you're also making good money, but you're all kind of in alignment. And I was so intrigued. I was like, can I just come hang out and just see what it's like in this magical industry that you've described as the CFP and fee-only fiduciary world.

10:10Neela Hummel: So as you said you wanted to go out for informational interviews to go down this path, I guess I'm just curious, how did you end up talking to a financial planner person who was the co-founder of Abacus. How did you find your interviewee people? How did I find my target? Yeah. I mean, I guess of all of them, I'm assuming there were more than this. How did you come up with your list to get them to meet with you? Yeah. I found this. In my seat now, I have so many people reach out to ask for informational interviews. People in general are so eager to do that. I was really surprised at how willing people were to just talk about their life experience, everything from teachers to lawyers to restaurant managers.

11:03I was like, tell me what your days are like. What do you worry about? What are the good days? What are the bad days? With Abacus, the co-founder is my brother-in-law. I was like, okay, so if there's somebody, I think he's in finance, let me learn about finance. So that was the connection.

11:22Neela Hummel: Very cool. And was it, I mean, that wide of a range, like from restaurant managers to financial planners, you're covering the gamut? Oh, yeah. Okay. Because I grew up, you know, my family also had a background in the restaurant business. And so I wanted to really understand what did I know about engineering, restaurants, service businesses, all of the above. So it was, I'm a huge like data gathering nerd in all things. And it was like, okay, how can I learn about all these different professions? And so it was a very wide range. Very cool. So you find out there's this financial planning world where you actually help people and can do good along the way, like do good and do well, do well by doing good.

12:08Neela Hummel: So what comes next to try to get your foot in the door? Yeah. So part of, I think, how the unpaid part happened is this all was in the middle of the great financial crisis, right? So no one's hiring in 2009. So we're like 08, 09. Exactly. And so, yeah, early, you know, late 08, early 09. I'm like, let me just learn. Let me use this opportunity. I was living at home. My expenses were really low. I was able to make it work until it got to a point where I was like, okay, I actually do need to have an income. and I pitched basically like, what if I did a lot of this backend planning work? I have a background in software engineering.

12:53Maybe I can help the advisors. Maybe I can help them get more efficient. And that turned into a job. But because of my connection to the co-founder, they were like, well, we gotta be really careful that this doesn't look nepotistic. So what we're gonna do is we're gonna give you a six month trial. And if anyone at this firm, at the time, I think there were nine people or something. If anyone at this firm says that this isn't working, we're basically going to let you go. No questions asked. I was like, okay, fine. Paid job. So I became essentially a pair planner. And the first task I had was to vet all the financial planning software on the market.

13:32We were using like Gen 1 Naviplan, you know, where we were like connecting to another server to like, we had a separate computer that we used for it. And so I I started just scanning all the software on the market and started doing demos and went from there. So tell us more then of how this role shaped up.

13:55Neela Hummel: Like, what's, I mean, I guess, what's the firm look like at this point? You said there are nine people. So help us size or have context for the firm. Yeah, you know, at that time, we were probably, I don't have the exact figures, probably a couple hundred million. And we were really spread out across three offices, which at the time was very, very unique because we had had a co-founder who had started in Philadelphia, but then had moved to Sebastopol in Napa County. And then we had the other co-founder who was based in Los Angeles. So we were nine people, but we were spread out across three offices, which was pretty odd.

14:34Neela Hummel: So Philly, Sebastopol, and down in LA. Correct. While everybody's trying to run things from the servers in their server closet. Exactly. And we had, you know, just the early stages of professionalization. I think there were like two CSAs. We had a trader, a couple of advisors, and like an operations generalist, essentially. And yeah, so I think it was about nine of us. And then you came in to help them... start doing some of the back office planning support stuff because they're growing and there's a lot of clients to serve now. Thinking about it more as a leverage move, right? Here we've got, are we going to try and teach these multiple advisors how to use the software or can I take that off?

15:25Can I be basically as useful to them as possible because I'm super comfortable with this software? Can I basically batch process plans faster than they would, freeing them up to do more business development, spend time with clients, et cetera.

15:39Neela Hummel: Which, I mean, it's still a popular thing today, but it was very popular as a growth approach in the 2000s that essentially said, if you've got some partner founders who are good at business development, just keep them out there bringing in clients, get other advisors and centralized planning. So they just keep finding clients and lobbing them over their shoulder and you just have to be there to catch them, serve the clients really well, and just keep them out there, finding more clients, throw over their shoulder as they go. And so a lot of firms I know in this time started building centralized planning, director of planning, departments and teams, all in this vein of we just have to keep freeing up capacity for our founders to go out there and keep doing the growth thing that they've already been doing to get us here, so we can keep expanding their capacity to keep growing.

16:31Exactly. Specialization with a nod towards scale, right? How do we scale this?

16:38Neela Hummel: And so what did the, I guess just the business and the clientele look like at this point? Are you gathering assets in traditional retiree market or are you working elsewhere? So I'd say pretty general in terms of the types of clients that we brought on with an asterisk. Both of our founders are practicing Buddhists. So we ended up getting a number of clients through sources like Yoga Journal and Shambhala Sun. We're probably the only financial advisory firm that had a booth at the Yoga Journal Conference. So in general, we skewed towards people who had a little bit more of an interest in mindfulness, but also precision.

17:31That is actually how the abacus came to be. We're nerds with heart, essentially. And so we started attracting people like that, people who wanted to go into the emotional aspects of money, but also didn't, you know, wanted good concrete financial planning advice. Okay.

17:52Neela Hummel: And, and so how does this flow for you? Like you, you, you get in for the year or I guess like the six months on a nine person veto power promotion. I passed, spoiler alert. Okay. You're still there. I guess it, you know, passed with eight off to the ninth, whatever it takes.

18:19Neela Hummel: So, so like, how does this play out in practice? You're just, you're in this new role. Yep. They're trying to figure out what to do with the role. So how does this evolve from here? So I've always been a very ambitious person. And in anything I've done, I'm like, I want to do it, and then I want to do it to the highest level. So even though I was, I can't even say that I was 100 % sold on financial planning at this time. But I knew, I was like, I want to make myself indispensable in this role. And I want to design this role in a way that is of maximum value to the firm, right? because I know every hour that I would spend is an hour that I'd love to free somebody else up to do their work.

19:05So I really dove in headfirst here. I started taking the CFP coursework and doubled up on my classes. I was no fun to be around for about a little over a year as I was studying and working pretty much all the time. I joke that I didn't have enough time to break up with my boyfriend at the time because I was like, oh, it's like right in the studying part of the CFP. Like, I just need to wait until I'm done with this. But I was voracious in wanting to understand as much as I could and craft a role that really made sense. And so from there, I put so much into these plans and the delivery that I was giving to the advisors that the advisors started saying, hey, well, why don't you come into the client meeting and you can present?

19:53And so I started doing some of that. And then I got it basically sitting on the other side from a client was the next big aha of like, oh my gosh, you could see the impact you were having. You could see the tears. You could see the resolve that came out of these meetings. And I was like, I want more of that. So that's where I was like, what, you know, I'm happy to join any client meetings and really started to put myself out there of like, how can I help? Oh, can I take this follow-up and started to kind of work my way into the room with a model that didn't really exist yet.

20:29Neela Hummel: So can you talk more about that specifically? How were you working into the room? I think, you know, without it being, there was no evil agenda, but more of a strong track record of developing trust with the advisors that I really wanted to learn from. I mean, it is, I think is something I always tell new advisors is it is such a privilege to be in that room, to be able to listen to these very intimate conversations. There's no better way to learn, but you really need to be listening and learning. You know, watching a senior advisor deliver tough news for the first time was like eye-opening. And so it was really from a trust standpoint of wanting to help them as much as possible.

21:24And it's like, hey, if I can deliver these results, I can run some on-the-fly simulations, like would that be helpful for you? And for a lot of them, they're like, oh yes, that would be great. I don't want to mess with that. It's better to do it in real time versus delivering a packet kind of a thing. So I think it's, you know, we're in the trust business more than we are in the advice business. And I think that trust really starts internally. I think it's a good signal sign when people want to bring you in the room because it does indicate that it's like, okay, I trust you in front of my most valuable thing, which is our client relationship.

22:02Neela Hummel: And so built from the frame of, I'm trying to figure out what I can do to help them. So I like the language. Hey, I can help you run some projections on the fly with the clients because maybe you don't love using the software hands-on live real time, but I'm really good at it. I learned it. I did the thing. I can totally steer this. Right. I can take notes. Can I take notes? Would you like me to turn this into a follow-up email? Like things that advisors were like, oh, yeah, that sounds great. So what, like, now I'm intrigued with these. So what else? Can I be in there to help run some projections on the fly so you don't have to worry about managing the software?

22:44Neela Hummel: Can I take notes and turn this into a follow-up email? Yep. So it just gets sorted out. Yep. What else? Were there others? I think from there, then it became, once it was pretty directionally clear that I wanted to be client facing, then it was where can we practice? What is this small piece of the meeting that I can lead? And then every single meeting building in after where I was like, can you give me feedback? What went well? What could have gone better? And like people do a much better job giving feedback when you really are asking for it. And you're saying like, really, I want to get better.

23:25What could have been better? And then every meeting I had this big list. Anytime I heard the advisor say something, anytime I heard the client say something, a term I didn't understand, a phrase or a question, I asked. And so I did this debrief with every advisor after every meeting. I'm like, what did you mean by this? Oh, that's okay. I see. That's an estate planning term. Got it. How did you know to ask this question? Just like the how questions, not the why questions, to really understand the nuance of navigating the relationship aspect of what we do.

24:00Neela Hummel: how hard was it getting them to actually schedule debriefs with you i was very flexible and i think i was lucky enough to have people who were were we're like a teaching hospital i i started using that term is like really willing people again are like really generous with their time when that time feels respected and there's a little bit of a reciprocity of like, hey, how can I save them a bunch of follow-up after the meeting? How can I create these cases or do whatever it is to execute on the things we talk about? Can I get 15 minutes to just understand why we did this? And in general, really, really generous people who would take the time.

24:49Neela Hummel: So you start going down this road of, I want to be in the meetings more. I'm finding ways to get in the meeting, then I'm asking the questions after the meetings, then I'm trying to find small bits of the meeting I can lead. Were there particular things that you grabbed onto to lead that you were comfortable to lead? I don't know if this was a, you're really comfortable talking about financial planning things in front of strangers, or if this was like a challenge to navigate unto itself. Where did you start with things you could actually lead? I think the financial planning was the easiest entryway because that was where I was spending all of my time, right?

25:30I was the paraplanner. I was in the software. I was also knees deep in my CFP education. So I also found that I was closest to the tax limits and the gifting limits and some of those technical numbers, right, that I now get teased about not knowing, I was Johnny on the spot with those figures, right? And you need that. You need it to be encyclopedic. And so it was like, okay, I can help here. I developed a really early interest in estate planning. So I started having some fun there. But a lot of it was just incremental. Okay, can I talk to them about this? And then just submit yourself for, okay, what could have gone better.

26:11I'm a natural fast talker. I got good advice about slowing down. I got good advice about sitting through discomfort. Just because somebody's crying doesn't mean you have to fix it. It means you need to hold space. So it was both coming in with this technical expertise, but then really learning the behavioral work that just really makes a difference in client lives. and in having a successful meeting and relationship. So that I was like so hungry for.

26:44Neela Hummel: So what happens next as you're going down this path? You're now doing the centralized planning work. I think you'd said ultimately you ended up in an advisor role, relationship manager role. So when or how did that divide get crossed? Yeah. So once I passed my CFP and we had co-founders who were the main rainmakers and, you know, they got full as happens. And so one of them was like, okay, well, why don't you start taking more of the lead on these client relationships? And so we kind of teamed up on some clients, but I started really sitting in basically the first chair and that started going well.

27:31I'll never forget the very first client that he asked to do this with. The only reason he even let me in the room, he said, well, she went to Cal. I went to Cal. I'll let her in because she went to Cal. And that was it. But it was enough to get the process started of being brought into those rooms. And then, turns out, it freed up a lot of capacity for our co-founder. And so that was going great for him. And then the other co-founder was like, well, I want to free up some capacity too. So then I started taking on clients with him. And so I was actually commuting to Northern California four to six times a year to meet with the clients that he had in Northern California.

28:12So, you know, what an amazing privilege to have learned from these two guys, these, you know, titans of industry. But I was basically their first AA and determined to free up their capacity and learn from all the wisdom that they had gathered over the years. So that's really became that AA. And then from there, you know, it kind of grew into independent relationships. Then I started bringing on some of my own client relationships. And then I was really operating on my own and then also in this shared capacity with some of the larger clients that I shared with other advisors.

28:54Neela Hummel: So I'm curious, how old are you at this point in the process? 26. 26, 27. Yeah. So, so what's it like at 26, 27, trying to take over clients from founding partners? So you've probably heard that phrase, you know, never trust anybody without gray hair. Yeah. I had none of that. I'll, I'll never forget sitting when we did our headshots and I, I asked somebody or, you know, one of the, one of the teammates, I'm like, should I have my glasses on or off. And they were just like, oh my God, on, keep them on. You're a child. It makes you look older. But it was a struggle because why should anybody trust somebody younger when they don't fully understand the questions that they were offering?

29:45But spending the time in the CFP curriculum and really learning about things, you're like, oh, Actually, I know a lot more than I think I do. But it's not about just telling people what you know. I think that's the hardest thing about when you're so early in a career, all you want to do is tell everybody all the things that you know. And the best advisory work starts with really good listening. So it was a combination of developing what I would call a grown-up bedside manner. I was like, how do I make space for really positive conversations and then also bring the expertise when it's needed? And so I think people ultimately, people trust competence.

30:30And I was really surprised how much they trusted the competence over the age.

30:39Neela Hummel: So how do you develop or I guess how do you prove the competence to get the trust? Being the first person to respond, being the reliable person to respond, responding with more than the question that was asked, basically going above and beyond at every single inflection point was my goal. I was like, I want to be the person that they can reach out to. I want to know the person who either has the answer or will figure it out. I wanted to really be that linchpin. Maybe it was just getting the other advisor to teach me something that I could then relay back. But I wanted the client to really trust that whatever it was, I could get it done.

31:25Neela Hummel: And I think you said as well, trying to develop a grown-up bedside manner. So what does that mean? This is one of the hardest things to teach in the advisory space. but it is how is a meeting, how do you design a meeting so that it can go well? How do you make sure that you're listening more than talking? How are you listening for the question behind the question, right? The fear that they're not actually asking for that is cloaked in a question around returns. I did a lot of just work on communications. I went down a whole neuro-linguistic programming rabbit hole, which is essentially so much of what you convey to somebody isn't even in your words.

32:14It's in how you dress and your body language and your reflective listening and just how you physically show up and how you make somebody feel. And so I really focused on that. I focused on how quickly I spoke. I focused on really strong eye contact. I focused on this like unreasonable hospitality type? How do I remember that they like their coffee with cream and two sugars? Just like all the little things that create that level of trust and competence. And then submit yourself too to just very direct feedback. Hey, what could I have done? If you could pick one thing, what did you think when I did this?

32:58But really getting that feedback at every single opportunity.

33:05Neela Hummel: So this starts going well. You're asking for clients. They're at capacity, so they're kind of happy to give you clients. They give you some, it goes well, so then the other partner's on board as well, and more clients are flowing. So then what happens? Do you now have your own capacity problems after a year or two down this path? Eventually, right? So it starts being that combination of hand-me-down revenue that you're doing well in delivering. And then the next muscle that I really wanted to work on was closing business myself. Maybe they weren't my leads, but I was like, okay, I want to really work on taking somebody from curious tire kicker to abacus client, which is a different skill set, right?

33:56You can be a really good servicer, but maybe it's different in meeting somebody for the first time, really understanding what brought them there and turning them into a client. So then I really focused on developing that skill. I wanted to be, I mean, I wanted to be the Michael Kitsis of financial planning, you I mean, I wanted to know as much as I could. And then I wanted to figure out how to close business. And then from there, it became, okay, well, how do you source business? And I thought about those as three pieces of expertise, ability to convert business, and then the ability to generate my own leads.

34:32So it was like each part of my career journey, I wanted to kill it at whatever I was doing. And so in the lead advisor seat, it was first service, and then it was close, and then it was source.

34:48Neela Hummel: So I learned sourcely. Why? Like, what's pulling you down this road of, I'm serving my clients well, but now I need to learn to close. Now I need to learn to source. what's driving that or even queuing that up for you as a thing to be going after? I think I had a very interesting combination of being very internally motivated of like, okay, how can I kind of push? How can I push the boundary of what I'm currently doing? How do I grow as much as I can in this role? But I'm also the daughter of an entrepreneur and I was in a very entrepreneurial environment. And that was the thing that they were like, well, that's one of the hardest things, right?

35:39It's okay. You can, you can service revenue that's been entrusted to you. That's like the first hurdle. But I was, I was at a firm that I was really excited about. And I liked the prospect of us continuing to grow. I love the impact of being able to take somebody who came in confused and unsure and have them leave with a plan and confidence. That impact was incredible. So it was like, okay, well, I want to work on these clients here, but I also want to expand the impact of what we're able to do. So it was both like, how do I develop these skills? And how do I expand the impact of a firm that at this point, like I'd really fallen in love with?

36:24It seems kind of hokey, but there was definitely a point where I was like, do I want to start my own firm or do I want to keep going in this path? And I decided that if I started my own firm, I'd be building a firm just like Abacus. So I was like, why don't I stay here, work in the areas that I'm really excited about and not spend all my time doing compliance and all these things that I'm not that interested in and just like really grow this. But I also wanted equity. I was like, I'm not going to do this just for –

37:02Neela Hummel: I was going to ask, one of the pesky things of those that come from entrepreneurial backgrounds is that equity conversation starts cropping up at some point. Yep. So let me come back to the equity part, equity conversation in a moment. And I would love to understand further when you said, okay, so now I want to work on closing business and learning how to close business. So what did you do to go learn how to close business? Are you a book reader or a class taker or an internet course or wizened founders who are going to teach you this? what did you do all of the above i'm a i'm a voracious reader still to this day um i get in trouble a lot at at the staff level where they're like you're not allowed to give us any more book assignments so i have to be very careful about the books that i recommend but i definitely did a lot of reading a lot of listening um a lot of interviewing and a lot of like can i sit in this meeting with you?

38:14Can I just be a passive observer? Can I be the waiter, the waiter in training when you go to a restaurant? Can I just be awkwardly in the corner, but not say anything and just listen and then ask questions? Trial and error. What went well? What didn't go well? Each time you finished a meeting, dissecting what you did. Like, oh, I said that. Was that the right thing? I don't feel like that landed as well as I hoped it would.

38:40Neela Hummel: So are there particular books or courses or programs that clicked for you?

38:50Going back, it's funny, you know, I have so many books that I care about now to go back and think about at that time. I don't know if I could put my finger on it right now.

38:59Neela Hummel: Are there ones that you still like today, at least that you pass forward at this point? Yeah. I think Radical Candor actually is still one of my favorites. It's a great management book, but I think it's a really good people book. Psychology of Money, of course. Fabulous. Cialdini's – I'm going to probably mispronounce his name, but Influence. Yeah, yeah. Cialdini. You got it. Yep. So, yeah, some of those. Okay. Okay. And I mean, were there, I don't know, courses, programs? Did you get into that side of the world of Sandler sales training and all the different things that are out there to try to support this?

39:43Neela Hummel: Or were you more the books and trial and error and feedback? It was kind of all of the above. We did do a whole session internally on solution-focused therapy that was really, really helpful because it was very much, you know, so much of the, the marketing, particularly at the time in our business was like, focus on the pain, focus on the pain. Or it's like, Oh, must we like, what about like getting out of the pain? And like, okay, what must it be like, you know, as like someone who's kind of action biased, it's, it's like, okay, let's not like marinate in the funk. It's let's acknowledge it. And then be like, where are we going to go?

40:22What would it be like if we got out of this? Cool. let's develop that path. That was hard for me because it forced me to slow down a little bit, but it was really, really valuable.

40:33Neela Hummel: So how, I guess, take me along the age career journey. So how old are you or how far in are you when you say, I want to actually start closing clients that, I know, general age bias of our industry, like I want to close clients that are my parents' age and or my grandparents' age. It's tough. It's very tough. But you've got to start, you have to start somewhere, right? In terms of like, you know, it is a muscle because you learn a lot about people. What are people, like, what are people really looking for? And instead of developing this rote script. It was like, really, how do you understand the person in front of you?

41:19And how do you actually help them? And you start generally with probably the smallest clients. You're not like, oh, I'm going to go out and close a$5 million prospect. That takes time. You've got to have, there's a lot of experience and I think perspective and work to get to that point. So you start with generally people that you know, people that are probably below the firm minimum, people that are, you know, rolling over their first 401k. And I'll never forget before my first prospect meeting, which was with one of my good friends. And I was so nervous, but because you never, you hadn't really done it before.

42:00And so the way you get better at something is, is you practice. And so I just tried as much as I could to practice, practice, practice. but it is challenging. So from an age standpoint, I'd say my main lead advisor years were between ages like 25 and 29 before I became a relationship manager of a team. And that I was still managing client book, but that's when it was really, we were running pure diamond teams at the time. All of a sudden you're in the relationship manager position. Well, your main objective is to bring on business. And by the way, you're 29, 30 years old and have never really done that.

42:40So you better go figure that out.

42:44Neela Hummel: And so is that part of what drives the next stage here? Yeah. You hit capacity, the firm starts expanding teams, you're now at the top of a team, and suddenly you actually have the obligation, expectation with the firm to be driving business development. Right. And I really loved people, right? I loved, because I had been really in this position, I really loved the mentoring and I was curious about management. And as we were expanding, I was like, oh, it's kind of a bold move because you put me in charge of people who were older, people who'd maybe who'd had more experience. And I, I really dove in feet first and made so many mistakes.

43:35I'll tell you the first year that I was a relationship manager, I brought in zero clients, zero, like no leads, no clients. It was like, I thought I was such an abject failure, but I was like, okay, well, what, what can change here? What do I need to do? What Some of it was my own capacity, right? Like how much time am I actually investing in business development? How much am I investing in writing blogs? How much am I investing in honing my public speaking and really figuring out a way to start letting go of some of the responsibility that I had been really like clamoring for for years that had really gotten me, I think, to a place where I could do well as an advisor.

44:20all of a sudden that skill was working against me in the next phase of my career. And so I had to, it was like the first reorient of like, oh, okay, what got you here isn't going to get you there. And you got to, we've got to pivot again.

44:34Neela Hummel: Wait, can you explain this further? So what's, what's the thing that was working that now is not working? Gathering responsibility. I think gathering, like being the focal point, being the first person to get back to the client, being like the one source of truth, being the person that over-delivered on every single client experience. It was like, okay, well now you have 85 clients and you're supposed to be managing a team and you should also be bringing in new business. How does that all work? Something's got to give. And then it was the model of, okay, maybe I need to start bringing people into some of these relationships like I was brought into, right?

45:14So then it was starting to bring in an associate advisor and letting them do some of the things that I had always really hung my hat on so that I could expand my own capacity to basically do the next thing.

45:28Neela Hummel: The things being like, okay, I need to not be the first one to respond. Right. When the client reaches out, I need to not be the one that crafts that response. I need the rest of the team to do it because I need to have the capacity to not put eyes on that so that I can focus on growth. Right. Which is hard because if you are somebody, I think a lot of advisors are very type A and we do well because we like to hold on to that control. Yeah. And letting go of control is so hard. And I'll remember one of my mentors at the time, he was like, you just got to expect that somebody's going to do it a little differently than you.

46:14And that is okay. And I like had that seared in my mind. And that was like a very helpful push to be like, okay, there's like you said, there's like a lot of different ways to have success as an advisor. And my definition doesn't have to be somebody else. But I need to know that, can I will this person really take care of this client the way I think this client deserves? If the answer is yes, like, okay, that's kind of how this works. Can I kind of pass that trust along, still be involved in the relationship, but create a little space for myself while also helping this newer advisor learn?

46:57Neela Hummel: So how does it evolve then as you get from, I'm trying to learn to close business to now I'm at the top of a diamond team and I actually have to learn to source it? So it's also interesting to dovetail this with what was happening in my personal life. I came back as a relationship manager from having my first child. Okay. So I was like navigating, I basically like came back into a new role with a four-month-old at home trying to figure out how to be a parent at the same time. This is your first? This is my first. They're just all the life and lifestyle and other changes of figuring out how we handle, like, I'm, it's not just me and my spouse anymore.

47:46Neela Hummel: There's a baby. Exactly. I can't work a late night because I have daycare pickup, right? And, like, somebody has to manage a food situation. And my husband and I have always been very equal from day one. But all of a sudden, that introduces a different constraint in some way where it was like, no, no, no, I got to be out of here by, you know, 430. I got to be very careful with my time because it's no longer unlimited. So that first year, you know, you kind of feel like you're failing as a parent just because you're like, I just don't know how to do anything. How come there's not a good book? And then I also felt like I was pretty much failing at this new job, right?

48:22Because I wasn't doing a good job of letting go of client relationships. I wasn't doing a good job of bringing in business. And I was like, am I basically this fraud? Did they make a mistake? And I think it's so easy to have that feeling at every phase of your career when you're doing something hard, when you're doing something different, and when you don't necessarily know how to do it. So that was a really tricky experience, particularly that first year. But I started trying things out, right? Talking to other relationship managers. What were they doing that was successful? you know started really developing more of a blog writing presence I was a terrible public speaker but I started investing heavily in that I was like maybe that could be a good venue for me and just trying a lot of things to see what it what worked got really good about talking to clients about hey is there anybody in your life that we could be a help to like our team's growing and we have the space to take people on not from like a sleazy sales capacity but like hey we actually are pretty well suited to help you and your people.

49:32Can we do that? And so bit by bit, you know, you start, you're like, okay, what's working? What's resonating? Who are our biggest evangelists? How do we help them find us? How do we create the content that is answering the questions that people have? And it just kind of built from there.

49:50Neela Hummel: So are there particular marketing tactics or content channels or things that just like that started to sync up and work for you in particular, stuff you leaned into because it was working, things you didn't because it wasn't? The best thing for me, it seems kind of hokey now, but blog writing was probably the most helpful thing because it forced me to really hone my voice. It made me a better writer. And then I use that content to reach out to people. But I think the biggest thing, it was less of a medium and more of a, just like a follow-up with people of meeting them where they are, right? Instead of being like, hey, I'm just checking in.

50:37Do you want to hire me? It's, hey, you told me you had this issue. I found something that resonated with you or you inspired me to write about it and I wanted to share it with you. So it was actually meaningful content that was about them and not about like my timeline. And oftentimes it's like, hey, I just want to make sure that you're in the right hands, whether it's with me or somebody else. I want to make sure you get help, right? We've all, we all have those horror stories of somebody that didn't hire us and then they didn't hire anybody. And then there was like, you know, a death and they didn't have life insurance and like you don't want that to happen.

51:13So really coming from this place of like, I really want to help you find your home, whether it's with me or somebody else, was probably the most helpful thing for me to realize where it was like, oh no, this isn't like, we're not Wolf of Wall Street here. Like we offer like a really amazing service. How do we help people find it or people kind of like us?

51:36Neela Hummel: so i get that from the closing end right and how the sales dynamic sales a bad word for a lot of like how the sales dynamic shift when the feeling is like we but we really actually do a great thing like when you truly feel like you do an amazing thing for people and genuinely help them why would you not want to tell other people about it? Like it feels good at that point. It doesn't feel good when it's salesy, but it does when like, no, we really do a cool thing. We help a lot of people. Totally. And I think that's the, like, people are like, well, I don't do sales. It's like, well, do you love the work that you do?

52:17Do you love the impact that you get to have on people's lives? Like, congratulations, that's sales. And like the best evangelists for your services are your clients. There's a reason that client referrals still rank in, you know, the top percentages of how a lot of advisory firms build businesses because they actually know what it's like to work with you. So it's like the sales reframe is super helpful, but it's that growth. And then, you know, beyond that, you know, it's like, okay, was there certain mediums? It was also, it was really about developing relationships on top of that. So, you know, we always get asked for referrals for CPAs, for estate planning attorneys, et cetera.

53:01I was like, well, I don't really have my own referrals. You had other people's referrals. So I was like, I'm going to build out my own referral network. And so I started just reaching out to random CPAs, getting introductions to estate planning attorneys. And I started having some lunches of like, who are the people that I would trust my clients with? And I started building that out. That ended up being a good referral network, reaching out for clients who had professionals that they really enjoyed working with. Hey, would you mind if I reached out to them? You know, I'd love to connect and see how we can help.

53:38So that was a big thing too, is starting to build those one-on-one relationships. And then, you know, I feel like my family didn't really know what I did until like not that long ago, but I had to get better about talking about the kind of work that we did and I made sure that the people in my life, friends, family, et cetera, had a better sense so they could know, oh, who could I refer to you? Whose problems could you help solve?

54:09Neela Hummel: So as I would infer from this overall, because we all have our own styles about how we do, I just think of the really pure sourcing and just how do we get at bats in front of people to then talk about what we do with great passion, that it sounds like it was very referral relationship marketing driven for you. It's referrals from clients. It's referrals from friends and family personal network. It's referrals from CPAs and estate attorneys. When we get to the very pure, how did you source it? That was the sourcing. And then the support for that was I wrote a blog post because I was inspired by the conversation we had.

54:56Neela Hummel: Like, thought you might find this meaningful, but I'm not sourcing clients from blogs or converting them from blogs. I'm sourcing them from relationships and introductions. And then these are ways that I nurture the relationship until they're ready to work. Correct. It's like building those relationships one at a time and, and rather focusing on a couple of key, really important relationships, um, was, was, it was very my style, right? Like I really love people. I really love genuine connection. And that helped because I was like, no, I want to, I want to like develop these relationships because I want to have good people to refer my clients to because it's, you take a risk as an advisor when you make a referral.

55:43So you really, you want those people to be very well vetted. And so there's a dual benefit, right? You're building out your roster of great professionals that you can support your clients with. And then you're developing these one-on-one relationships that also can be great knowledge sources. Hey, I'm working through a weird issue with a client. Can you help, can you opine on the efficacy of this slat? Like that's a cool, that's a really great positive feedback. There's not a real downside to building those relationships.

56:16Neela Hummel: So how long did it take before you were actually getting some business development momentum? I think it started in real actuality. I was probably six years into my career. if I'm being really clear on like when I really started building business in a material way. I definitely built some. I'd started getting referrals, a couple people in the network, but where I got to a point where I developed enough relationships, I developed enough client trust, I was putting myself out there kind of in any way I could that it was becoming somewhat repeatable. And so it was probably like six, even seven years before it was really consistent.

57:07And even now, I think what, you know, some years you have really strong years in terms of clients coming to you. And then some years it's not so strong. But it took a while because we are really in a trust-based business and you're developing these relationships over time. But all of those relationship seeds, they do bear fruit over time because people trust you. If you're trustworthy and you do good work and you keep getting in front of people and showing how you can really – demonstrating the value, but also showing we do want to grow. We want to help more people. Those things really work together.

57:48Neela Hummel: And how do you not lose hope waiting six to seven years to feel like you get momentum on this? Yeah. I think that's the thing too, that we forget, you know, we talk about the iceberg of success, but every job, there are grindy parts to every job. And, you know, you go on and people are like, I work two hours a day and I make 300 grand. And you're like, okay, love that for you. And like, you don't get to that point without putting in long, hard hours and making these big mistakes and doing offline learning that isn't part of the normal curriculum. But like, if you really like, I know Cal Newport talks about this.

58:31It's just one of my favorite. He's just one of my favorite writers when it comes to just the work experience is get the experience, get the expertise, and then you have more options with how you can spend your time. If we're, if we're doing it in the opposite way, it just doesn't work like that.

58:52Neela Hummel: so what comes next on the career path journey you're now at the top of this diamond learning and refining and honing the uh close the business source the business paths so what what comes next so at this point i think i was the rm of i think we had three diamond teams three total. And I was like, at this point, we were very much ensemble style. Everybody was kind of, you know, you were basically when you were bringing clients on, you were bringing them on, they were your clients, you were kind of building it from the ground up, we still weren't big enough, I think, to have this element of scale.

59:35And so at this point, I was like, Okay, well, I want to create some consistency on my team. At the same time, I'd also looked around and realized that there were so few women in the industry that it was like crazy. So I'm in this diamond team. I also decide to start a women's initiative internally at Abacus of like, how do we serve our female clients better? How do we serve our female employees better? How do we just like do better from a gender standpoint? And as part of that, turned out my diamond team was all female. And so I was like, okay, so we've got a couple of these diamond teams. What if we built the standard that allowed us to be the most successful team?

1:00:24Like, what if we could grow? What if we could serve the most clients? What if we could serve the most revenue and do it with this full female team and like build the standard that we then use as a group of four? And so I had this fabulous diamond team and we started building out basically Abacus' first client service standards, right? These are the terms. This is when you have a meeting, you do a follow-up within 24 hours. And this is what that looks like. And this is what we do on birthdays. It was like the very first client journey work that we were doing. And then at the same time, we've got this women's initiative going where I'm like, I want to bring more women into business.

1:01:03I want to bring more women into the industry. and I want to create content and events that are more helpful for our female clients. So it started just like shifting a little bit out of the one-to-one clients and started thinking more about how do we have this like really successful team? How do I be a good manager? How do I create efficiencies and scale in our diamond team that could then maybe be a standard for the rest of the firm?

1:01:37Neela Hummel: And so how does this go in practice? So for some firms, it's yay, standards, and further is like, yeah, you be you. Right, I'm good. I'm good with how I'm from my clients here, and change is kind of tedious. Yeah, I mean, I think is that we weren't pushing it on anybody, and so that made it kind of easy. And so then people would talk about these problems, and we're like, oh, well, we have a standard for that. You want to see it. And so we started, we actually called ourselves Team Bacon. or women who bring home the bacon. And we started sharing when asked, when people had these questions, when we were building out, you know, more of like our, like our matchmaking journey.

1:02:17And so it was a little bit more organic. And at the time, you know, we were continuing to grow, continuing to develop next talent and come, let's see, I guess it was 2018 or 2019, we made the full shift to professional management. And that's when we actually like developed, you know, C titles, these like, you know, CIOs and the chief of advisory services. And we merged in a firm and she became our chief marketing officer. And so at that point, I had a lot of support along the way from people internally who believed in me faster than I believed in myself and pushed me into roles and responsibilities well before I thought I was ready.

1:03:03And going from that RM and just kind of trying to set that standard of being the highest revenue team, which we did hit, by the way, that led to the path of running the advisory department and going from the RM role to the chief of advisory services.

1:03:22Neela Hummel: So as you were shifting to professional management of CIO and CMO and chief of advisors, like you got the chief of advisory hat. Correct. So what drove this change that the firm suddenly said like, today is the day we're going to add a more titles with C's in front of them? Like what was, I don't know if you remember, what was the size of the firm? What was the context? What was going on that drove this? Yeah. I mean, we were probably in, probably around 2 billion or so. At that point, we had started bringing partners on. We had, I don't know, maybe 10 or 12 partners. And so I think there was just starting to be tension at that.

1:04:10And again, I wasn't the one who made that decision. But looking back now from the seat that I'm sitting in, I'm like, oof, that must have been a lot, very hard to wrangle, When you start expanding the partner base and you're being led by that partner base, it starts getting really hard to operate. If you have 10 partners and everybody has an opinion on everything, you will just grind to a halt. So I think it was from there.

1:04:38Neela Hummel: So the firm had been partner-led with founders and then added paths to equity and partners. And now all of a sudden, partner-led decisions and meetings are not so great when there's 12 people who want to sound off and inevitably have different views about things. Right. So then the shift was, no, no, no, we need to create a management layer, agree as partners that the managers are going to manage, and stop. like group decisioning everything. Yeah, exactly. That basically, that's the transition that was happening here. Yeah. And I think helping, yeah, helping making decisions, help disseminate decisions, help, you know, grow in a way that was like very specialized.

1:05:26And I think we had a president who was very forward thinking. And I think his, two of his greatest gifts was some of the early work in expanding our cap table and our partner program. And then I think it was professionalizing our team to a point where now it feels like our governance level is operating at a very high level. And I think maybe we did that earlier than other firms would do, but it was really impactful for the firm because we started saying, okay, this is what it goes from being founder-led to partner-led to more of a cohesive management structure with clear areas of accountability and ownership.

1:06:12Neela Hummel: And so in this transition where leadership roles are getting created, you end up with the chief of advisory role. Yes. So what does that mean? What did you actually do at that point? That's the fun thing about a new role is it's like, this is your role. You better figure it out. There's no playbook, right? And you also, I think the other tricky thing now having had so many roles in the same firm is that roles are also never binary because you're always kind of straddling two different roles. So as I took on the chief of advisory service job, I was still the RM of a team and I was still running a client book.

1:06:58So I almost, you know, I was kind of hanging on to different pieces of previous roles. And, you know, we didn't have, we weren't big enough necessarily to pay me a full-time salary to work in chief, as the chief of advisory services. So I kind of kept, you know, kept a foot in a couple of different areas and, and grew the role as I was figuring out, like, what is the outcome that we need? And a lot of that was career path development. And, you know, how do we create some consistencies that I'm not having the same conversation over and over? That was when we developed our first career path. It was when we first developed firm-wide client service standards, right?

1:07:40I'm like, I can't hire if I don't know if everybody's operating in a different way. And so it was like, okay, what are the problems that we have found? And what is the basically professionalized solution to solve that. But I was figuring it out as I went along. There was not a clear guide.

1:08:00Neela Hummel: What I'm struck here, I guess, going all the way back to some of our conversation at the very beginning, this is the point that you're sitting down and doing career path, like formal career path development for the advisors in your firm at 2 billion of AUM. That's when it actually showed up. Yeah. In a meaningful way. And it's funny because I looked the other day at the first career path iteration and where it is today and how much it's evolved. But it was mostly, a lot of it is like, okay, we now have enough advisors. We need to create some consistency from compensation standpoint. I wanted more women in the industry.

1:08:46And I was like, well, part of this is designing a firm that is designed around fair work practices, which means there should be compensation parity, which means there should be clarity around how you achieve these different levels of work. And so those kind of ended up working in tandem of like, what is the right thing to do for the business? How do we make sure that we are this great place to work for all kinds of people? And how do we answer the number one question that employees have, which is, how do I grow? Right? How do I get to the next level? And I think career pathing is, that's really, we started there on the advisory side.

1:09:24Neela Hummel: And what shifted from there versus now? I guess these are seven or eight years ago or something. So what changed that you said it's evolved so much since then? I think making sure that we're balancing all the pieces. Your career path says a lot about how you want people to spend their time. If your career path says you need to build up to 250 clients, that tells me something about how your service model runs. And so I think figuring out like what are the objectives at the firm level and what are the objectives at the individual level? And I think you need to kind of skate the line between those two things of how do you give people an idea of what they can personally do, but also like what does the firm need?

1:10:13Right. And so we expanded it so that there's EQ components, there's technical expertise, there's like leading indicators of, oh, you might be ready for a promotion when. There's lagging indicators. Okay, you're, you know, managing roughly X number of clients. And, you know, people are wanting to team up with you on clients. And so we added pieces that were both personal and at the business level, speaking to both technical expertise and the EQ work that is really hard to quantify, right? It's hard to say, like, people trust you, but you need that in order to grow in your career. So you've got to quantify that.

1:10:56Neela Hummel: And so how long are you seeing this chief of advisors role? I have this stuff. Oh, and, and my clients and my team to manage and all the rest. So I was officially, I think in that role for about three and a half or four years, depending on the timing. And it was probably only in the last year that I was able to spend like a good chunk of my time on it. Like, I really felt like I was juggling a couple of hats. And in a really weird, crazy way, I feel like I hit my stride right as COVID happened and was also, you know, one of the hardest points of my career because lockdown happened. I'm chief of advisory services.

1:11:45I'm running a diamond team. I also have client relationships. I have a three-year-old and a one-year-old and I'm four months pregnant with my third child and daycare's closed. I have three jobs. And, and then, you know, you go back and you just like, remember the fear of that time, that there wasn't really a good blueprint. And as hard as that was, I think it forced this level of like, okay, how do we get through this? It was like a survival kind of metric. And it's like, what do people need? People need helpful leadership. People need to be seen for being humans, not just employees. How do we build a firm that really sees people for all the all the loads they're carrying.

1:12:38And I mean, I was like doing staff meetings with a, with a kid on my hip, right? Like there was this normalization of work-life integration that I think ended up, it helped me become a better leader. It helped me delegate things that I could delegate. I was like, okay, okay, Nila, you've, you've, you've hit your limit. It exists. This is too much. You got it. you got to kind of start shedding some hats. So that was like a very tough low point and also something that ended up being helpful for my own development. But it was a mess.

1:13:18Neela Hummel: And so where did the role go next? So there's a lot that happened in 2021 and 2022. We are our longtime founder had been our CEO, he stepped back from the CEO role at the same time that we were also navigating a firm split. So towards the end of 2021, he steps back and the board was like, I think we have good internal candidates. Let's run, let's basically run a full application process to see if we have people who want to be CEO internally. We think we've got a strong talent bench. And so we went through this process. And, you know, during COVID, during that time as chief of advisory services, I had gotten really close with Meredith Storjohan, who was our chief marketing officer.

1:14:10She and I collaborated very heavily. She was marketing. I was advisory. Like together, I was like, oh, we can do this. And we were like, it's so fun working together. We're very complimentary. What if we ran together? And so we ended up submitting ourselves for co-CEOs, which everybody we talked to told us would be a terrible idea. Like literally no one was like, this is a great idea. Everyone was like, this is the worst thing in the world. You guys shouldn't do that.

1:14:39Neela Hummel: Why was everyone so negative on co-CEOs? It's not, it's more common than people realize, but it's rare. and you know we're also look we were 37 young women by the advisory standards and we wanted to do co-ceos so it was almost like we were already so different and people are like oh well you just need one person who's going to always make the call it'll never work with two like you have to have such good communication like people just didn't think it was possible and in leading up to it, we did a lot of work together of like, okay, well, what happens? How do we come make decisions? What happens when we disagree?

1:15:19And we really did a lot of research. We showed models where it was successful. We laid out how our org chart was going to work. We were going to, you know, this is how it worked. You can't use mom to go after mom. Like we needed to, how were we going to communicate as a unit? And, you know, we really went through it one by one. And in the end, the board accepted. So we became co-CEO, which is already like a huge shift in a firm's world, right? When your management turns over, that's like a huge deal. At the same time, there were some personality conflicts with some of our partners and some differences in vision.

1:16:04And so at this time, our firm actually split into two pieces. We are a founding B Corp. We have been a B Corp for the last 20 years. We have our roots in not just Buddhism, but in ESG investing, right? That's one of the things that really defines abacus. We fundamentally believe that you can do well by doing good. And we're also really wanted to pursue doubling down basically on that model, employee ownership, being a B Corp, being a values aligned firm. And that wasn't the feeling that everybody had. And you had, you know, with partnerships, you got a lot of opinions. And sometimes those opinions boil over to a point where it just doesn't work for the firm anymore.

1:16:53So we split this firm.

1:16:55Neela Hummel: And we have a management turn. Oh, yeah, go ahead. I just want to understand that the, I guess a little bit of the dynamics of the split. it? The fracture was really investment philosophy, right? Can we do ESG and do non ESG, right? Which is frankly what a lot of firms do is like, you want this? Okay, then we can give this to you. And so it's not the wrong choice. The difference was we really had our DNA in this values aligned world. And so the more we kind of skewed out of it, we basically had a choice. Did we want to double down on our values or did we want to become the generalist? And for us, we were like, it's just we have too much directionally invested and we have too much conviction around things like B Corp not being a marketing spin, right?

1:17:47It's actually something that helps us stay accountable and create a more sustainable business for profit. So it really was this ESG versus non-ESG because now 100 % of the portfolios that we offer are screened from a value standpoint. We end up attracting people who want their money to line up with their values. So between the vision in terms of investment philosophy and just some personality misses, it was like, I think this is the right call.

1:18:20Neela Hummel: And so the firm literally splits some advisors leave, take their team, take their clients and teams. You figure out how to carve up equity of who stays and who goes as it gets smaller with all the awkwardness that goes with that. Exactly. So, you know, 2022, we are, we have people leaving, the firm is basically redirecting where we're heading, right? We're basically doubling down on this conviction. But there's so much in transition, right? Clients are moving around, some advisors are leaving, we've got the operational structure of a bigger firm, but now all of a sudden, we're a smaller firm. And so this is all happening, which quite frankly, like there's a lot of people who would have taken that point and we could have just sold.

1:19:16Right. And like that would have been a lot easier than what we did. But we really were like, let's let's double down here. And so we had, there was a lot of stabilization work of just like, okay, where is everybody going to land? How do we make sure all of our clients are getting the best service during this time? But, you know, it's hard, it's hard to grow when you're trying to figure out where things are going to land. And keep in mind, this was like our first year as not just CEOs, but co-CEOs. So we're like figuring out a co-CEO dynamic. it's both of our first time in the CEO seat. We're navigating a firm split.

1:19:58And if anybody remembers what happened in 2022, markets fell, inflation went through the roof, interest rates went up. Like it was basically this like Murphy's law year. So 2022 was rough.

1:20:13Neela Hummel: So as this, just one more question to it. As the split came, were these founders who had changed their views or was this more partners who came in later and then weren't happy with where the firm was or was going or I guess wanted it to go in a different direction than it was? It was the latter. So it was equity partners who came in, but I guess either didn't necessarily buy into the roots of where it was or hoped that they could change it as they became partners and the firm decided it did not want to change. That's right. And or, you know, had we gotten more, had we developed more conviction over the years?

1:21:05And so something that maybe wasn't as front and center, what we, we used to call some of what, like the work that we did secret abacus, like, oh my gosh, it's so great, but we're not really talking about it. And I think there was a big difference when we really started talking about it. We started talking about impact investing. We started talking about the B Corp certification. So things that maybe didn't seem like core parts of who we were, you know, like nice to haves, I think we got louder on those. And I think that that created some issues, too, where it's like, oh, wow, you guys are like really into this ESG stuff.

1:21:42And that ended up being somewhat polarizing.

1:21:47Neela Hummel: and so what what's changed now we're going going forward to try to manage this in the future so we are we really doubled down at that point and got very clear on who we are and who we serve and that extends to both people who work at Abacus and the clients that we bring on. I think we just got, we stopped kind of trying to be all things to all people and we're like, this is who we work best with. And if you bring somebody on who wants a different portfolio, there's a lot that they're not gonna like about Abacus because they're gonna get content on how we engage with AI data centers. Like that's, there's going to be a lot of things about the experience that they aren't going to like.

1:22:41And so I think it was a good exercise in just not, not over promising and not bringing on clients that just weren't the right fit and, and employees too. So now like the people that are attracted to us are coming because they're like, you guys bring rigor to financial planning. You also, you know, are leaders in this space in the, in the ESG world. You have conviction there and I want to be a part of it. So it's like we're not, we've just gotten more narrow in who we work for and who works with us. And has that even shaped paths to equity and partnership now? Yeah. And thinking of personality conflicts, governance is messy.

1:23:28And especially as employee owners, we now have, so about just over a third of our staff own equity in the firm. We have nobody else on our cap table other than employees. So 26 partners. And part of that is defining the role of what an equity owner means, right? We're not leading at that partner level, but partnership is both an economic interest and an investment in your future in the firm, right? Just like the journey that I had where I'm like, I think there is a component of, I think when people own a piece of something, they treat it like their home, right? You don't wash a rental car, but you do wash your car.

1:24:15And I would love to just get more equity into the right hands. And so when I look around like at our partner group, I'm like, this is the engine. And I wanna grow this engine because when people have that equity ownership, They operate differently. And yet, there's a lot of decisions and a lot of opinions. And so it's slowed down some of the decision making and just kind of bringing people along. But I think ultimately it makes for a stronger firm because we've got this fabric of a lot of people who we all want the same thing.

1:24:50Neela Hummel: And so did the co-CEO structure continue through all this as well? Is that still present through today? So now for the last year and a half, it's been me solo. But the shift from co-CEO to regular CEO was wonderfully drama-free. Mary Beth and I are still very close. She left for her own reasons, but did it in a way that was really actually great for the firm, right? We created a plan. It was a full transition. the reality when we talk about the glamour of like a CEO job or of an elevated title like there is so much muck like there is a lot that you end up spending you spend your time answering or figuring out the problems that nobody else wants to touch you know for every every award you win you know there's plenty of times where you're at a funky hotel eating peanuts for dinner.

1:25:49It's like there's so much unglamorous that goes with the role that kind of balances things out where it's like, well, this is a role about stewardship, right? And it's like, you think about it. I really think about it as a responsibility piece of like, how do I play my role to help get the best out of everybody else and move the organization forward?

1:26:12Neela Hummel: So what has surprised you the most on this journey of building this career intern to CEO over, we are now about 18 years, 17, 18 years? Yeah. A few things. I'd say the people is both like the hardest part and the best part, right? The people, like you don't have firm issues, like you typically have people issues. And I think it's some of the most rewarding work that we do, both, you know, the people that you work with and the people that you get to serve. So it's, it's always, it's always a balance there. And this was a surprise, like you didn't, you didn't expect it to shape this way? Yeah. I mean, I love people.

1:26:56I love people a lot. Like I am actually a total extrovert. And I really enjoy that. But managing people is hard. People, everybody's kind of operating with the different set of just things that they come to conversations with, you know? And so people struggle and things can get messy. You know, governance is hard. So I think, you know, the management work is always tricky. Um, but it's also, you know, coaching, coaching people on being the best versions of themselves is pretty amazing as well. So, so what else was a surprise? I think there is no job that exists where you don't struggle and you're never ready for the next job.

1:27:52I've had so many conversations with people where they're like, I'm not ready for that level of responsibility.

1:27:59Neela Hummel: Try becoming a parent. It has a very similar phenomenon. I was just going to say that. No one's ever really ready. You're never ready. As my mom said, mom of six, she's like, you just kind of have to do it. I think that's it too. I certainly felt that. I never felt ready for any of the roles that I ever had. So what was the low point on this journey? I feel like I've talked about a few. I feel like there were low points all along the way. And I think there were low points at every hat I was wearing. As an advisor, just breaking over my own overcapacity and being my own worst enemy when it came from doing everything myself and not leaning on other people.

1:28:47feeling like I failed as an RM when I took over a team and just bombed in terms of bringing on new clients. Like I was like, this is maybe, maybe I've petered out. Maybe I shouldn't be in any kind of an elevated role. I think being the chief of advisors and COVID happening and just feeling like, oh my God, how this is like a survival question. How do we move the organization forward and not break as a human. And then the whole split 2022 was really hard, right? Trying to, to, to stabilize a firm that I really love, right? And have loved for a long time and, you know, make sure that our clients and our people were good.

1:29:33And I think when people criticize a co-CEO model, I'm like, I don't know if we could have done it without both of us. Cause it took a lot of, you know, just talking to people and stabilizing and understanding what are the needs. And I think as part of that process, you know, we really uncovered, there were a lot of issues at the firm level that we really needed to grow up with, right? We needed service models. We needed better career pathing. We needed more robust minimums. We needed segmentation. We needed performance management. There were so many gaps that were going to keep us from continuing to grow that we had to deal with.

1:30:17A lot of our sales were still coming from co-founders. We needed to diversify our sales team. And so I think the heaviness of all of the work that we felt like we needed to do while also managing the split was very daunting.

1:30:37Neela Hummel: So what, I think of this like pearls of wisdom do you have from the school of hard knocks experience now you wish you could go back and tell you 10, 15 years ago? So like, what do you know now you wish you knew then? I think when you really care about the work that you do, it's really easy to get sucked in to both the highs and the lows. And you got to be able to call it and kind of even out the ride. Like if you really care about the work, you really care about the people, it's easy to just like, when you have a great day at work, then you are great with your kids at home. But if you have a low day, then do you bring that home?

1:31:25And so really, it's almost like a boundaries observation for myself of like, you can love work, you can love doing the best job that you can do. And you also can leave it at the door and switch hats and become a partner and a parent and a friend. And that doesn't make you bad at your job. I was curious to hear more in that perspective, just what you have done, your tricks of the trade, as it were, to even out the ride of not getting totally

1:32:05Neela Hummel: sucked into the highs and the lows. some of what I've I mean I think it's an evolution right I think I'm always I'm always doing work here but the the biggest shift that I think I've made is designing a time like my time that works for me that then works for the firm right I like I don't take meetings before 10 I don't take meetings after four I don't take meetings on Fridays like I have I have made it very hard to have meetings so that the meetings that I have are really intentional. I don't have a lot of time. I got three kids and it's a big organization to run. And figuring out that how you can fill your time with meetings, you can fill your time being busy, but that's actually not the best thing for the firm.

1:32:53The best thing for the firm is for me to have capacity to deal with the crazy problems that pop up and space to dream up the next cool thing that we're going to be, you know, moving towards and to have the kinds of conversations one-on-one with the team that, that are like really, really invigorating because I look around and I'm so impressed by the talent that we have here that just like getting little bits of it in doses throughout the week is like the most exciting part of my day. So I think I started really taking ownership of how my time can really be better used, like energetically and for the firm.

1:33:35Like I do a coffee with Nila once a quarter where I just open it up to everybody. And it's like, you know, questions. And I'm very candid, like questions on the firm, direction. What do you guys want to know? But I think really allowing myself to have my own style and my own time boundaries, I think has been really, really helpful in riding out the highs and lows.

1:33:58Neela Hummel: So any other advice you would give younger, like newer advisors coming to the profession today and trying to get going on a good track? We talked a lot about grit and hard work, right? I think that's an easy one, but I think the real nugget I would share is get curious before you get judgmental. That it's very easy to look at a problem and feel like, oh, I've got the solution to that. Why doesn't the firm just do X? When some of the best conversations are, look, we don't know everything from a leadership standpoint, but we are operating with a pretty big chessboard. And so it's like, oh, I see that solution that you have.

1:34:41You want to understand why we've actually approached it this way. And that so many of these conversations are a lot more nuanced than people realize. And I think if I'm looking for one trait in future advisors and future employees, it's curiosity. Because this is a learning profession. And if you feel like you've got it all figured out, you won't grow as well as you could in this profession. Because that's the coolest thing, is that you've never done learning about financial planning. You're never done learning about relationship building and communication. There's so much to be learned. And that's why I think it's one of the best industries and best jobs in the world.

1:35:25Neela Hummel: So it's the difference between a team member that says, why are you doing it this way versus why aren't you doing it this other way that I can see we should be doing that. Or maybe we consider that as well and you don't have all the context yet. Right. But you could ask. But you could ask. And like, oh my God, we'd love your ideas, but it's like, oh, okay, why have you designed the career path this way? We're like, oh, well, let me tell you, this is where we're going to go instead of like, you didn't do this right. And it's like, well, did we? Did we not? Are we optimizing for the same things?

1:36:02We don't know. Like, let's have a cool conversation about where we're going and what we're trying to optimize and like bring those ideas and I can share some context. And if there needs to be a change, we should make that change. But let's do it with, you know, symmetric information.

1:36:19Neela Hummel: So as we come to the end here, this is a podcast about success. And just one of the themes that comes up is that that word success means different things to different people, changes for us sometimes through seasons of life. And so you're on this wonderfully successful path with the career and the firm as CEO of a multi, literally multi-billion RIA. And so the business career seems to be in a wonderful place now. How do you define success for yourself personally at this point? I think for me at this point, and I think my definition of success really shifted with every role, right? It's like, what does success mean at these different levels?

1:37:05I think in this role and as a 41-year-old mom of three, I think about success being durability, building something bigger than any one of us, which includes me. And I think that there's parallels to parenthood, which is like, I want to develop really good humans that don't need me, but want to hang out with me. And I think about that, like with the firm is, I think about succession planning constantly. I think about cultivating the next generation of leaders. I think success is like, have we developed a group of teammates who I actively want to take my job? And have I developed kind, wonderful human beings who are going to be a positive impact in the world?

1:37:55And so I think like durability is the word that comes to mind.

1:37:59Neela Hummel: I love it. I love it. Thank you so much, Nila, for joining us on the Financial Advisor Success Podcast. What a joy. Thanks for having me, Michael. Thank you. 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.

1:38:49Thank you.