Michelle Magner: Powering Growth Through an Integrated Framework

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Welcome to The Way Forward presented by Barron's. I'm Ray Scalfani, founder and CEO of ClientWise, and today I'll be your host. What happens when someone breaks into a profession not designed with them in mind, climbs to the top, and then helps reshape the model for the next generation? Our guest today has done exactly that. Michelle Magner is the first non-contracted female partner of an independent advisory firm affiliated with Northwestern Mutual and one of the top-producing partners at Sociam Advisors. She began her career on the analytical side as a portfolio manager before transitioning to advising high-net-worth and ultra-high-net-worth clients. With the support of her team, she's built a high-impact client base through disciplined planning, strategic growth, and a relentless commitment to development. She's also a mom of 3 boys, a marathon runner who has actually achieved a 3-hour and 37-minute personal best, not once, not twice, but 3 times. Including a 3:37 in the Boston Marathon to qualify for the next Boston Marathon, and she's once minored in Japanese. Today, we'll explore how Michelle's motivation and understanding of her clients' needs have improved and reshaped her planning approach. The old separation between investment advice and insurance no longer suits modern families, so she's developed an integrated framework called defensive planning a structure that combines tax strategies, estate and trust planning, and emerging family office services. We'll also look at how she mentors next-generation advisors and builds relationships with heirs who will ultimately influence future decisions. Michelle, welcome to The Way Forward.

Thank you, Ray. It's an honor to be here with you today.

Hey, so let's get started with your journey. How did you first get into the business, and when did you realize you wanted to expand planning beyond investment management into this broader, more comprehensive approach you lead with today?

Thank you, Ray. If I had to sum it up with one answer, it would be the financial crisis. I got my start in the career in 2005, managed money through an incredible bull market ending in the fall of 2007, very green, managing a few hundred million dollars for clients, and over the next 18 months, I watched the market drop 58%.

Wow.

And the best advice that I could give my clients at that time was, we're now finally seeing the capitulation. The market is going to come back. And while I truly believed that and was very convicted in that, I thought to myself, there must be a better way.

That's a, a pretty unbelievable way to start. Uh, let's explore that background a bit further and the evolution in your thinking as an advisor. So over the past two decades, this profession has gradually shifted. Albeit slowly, toward a more diverse advisor base. And you've mentioned that being a woman has given you an advantage in building trust and creating stronger relationships in planning. What's this advantage shown itself in your work with clients?

Well, I think it's all about the lens. And so I'm a glass half full kind of gal. And I remember early on being at an industry conference and being one of perhaps 200 women in a sea of thousands of men. and I looked around and thought, wow, what an incredible opportunity I have in front of me. Women bring, generally speaking, different values, a different perspective to the table, oftentimes more detail-oriented. They may communicate a little bit differently, be more willing to have challenging conversations, and I thought there are so many people out there who likely prefer to work with a woman. This is a real advantage and opportunity in front of me.

That's a fresh perspective. We are here, live at the Barron's Advisors Women's Summit, where you led a session today, and it's clear that fresh perspective is adding a real difference in the marketplace. I'm curious what differences you've noticed in how women are received and valued in the profession, you know, compared to when you began.

That's right. And even bringing a takeaway from the conference today, I think that they shared on the 20th anniversary 20 years ago today, there were 300 attendees. Today, there are well over 1,000. And so watching that, I've seen it. I'm by no means a pioneer in this profession, right? Getting into the industry when I did. But I remember being alongside our founder, Scott Underwood, in the early stages of my career 15 years ago and often was referred to as his admin or his secretary. I think— I think that bothered him a lot more than it bothered me, underestimating underestimating me is the best motivation that you can give to me. And now here I am, the tables have completely turned. I'm given opportunities and accolades and awards and recognition that aren't even offered to many men. So I've really seen it kind of come full circle in a relatively short period of time.

That's terrific. And you had a great business partner in Scott Underwood helping you make those strides.

I sure do.

That's awesome. Hey, so what advice do you give those exploring advising as a career, especially women considering the profession? I know that's been a challenge for the industry at large.

It really is. I think that there's a misnomer out there that you must kill what you eat and go so hard indefinitely in this career. I think if you have grit, you put your head down, and you do the work consistently growing and learning, that this can be an incredible career and a rewarding career for women. Personally, I'm again the mom of 3 young, healthy, active, incredible boys. I work really hard at a demanding career. I don't juggle it all perfectly, but I'm very dedicated to my clients, to my firm, and to my team. But I also don't miss them on the golf course, the basketball court, or the soccer field. So when I'm with them, I'm present, and when I'm at work, I'm present. And it's been, again, just so rewarding for me to have this flexibility and a rewarding career as well as being able to be a present mom.

So it's possible.

It is possible. It is more than possible.

That is fabulous. You know, when I got in the business, The old adage was you gotta learn the bond market first. And those that know the bond market and traditional fixed income, wow, they really understand how to run money. And it's interesting 'cause you've joked about being a recovered investment manager and obviously, you know the bond market with your background in fixed income. What made you realize the bigger picture of real financial planning?

Again, going back to my early years in the industry, And we truly believed in banking that we were doing financial planning. Now, sure, we would check a box on estate planning and trust management, and we would factor test our portfolios against a variety of market events over time. But what we were really doing was managing an asset allocation. We were having clients invest 80%, 90%, 100% equity for the bulk of their accumulation period, And then we transition their portfolios to 30%, 40%, 50% fixed income. In those days, you could easily count on a 5% to 6% coupon from that portion of the portfolio. That's what you live off of, and the equities are there to be exposed to long-term capital appreciation, keep up with inflation. That's your financial plan. And so what I learned over time is, again, that's investment management. It's not financial planning.

There's a real difference, and sounds like you've defined it in a differentiated way.

That's right. And if your clients are relying solely on fixed income to provide for their current income needs, they are vulnerable. We saw it over the last 10 or 15 years when we had interest rates near zero and we had elevated and sustained inflation. Relying on fixed income leaves those clients high and dry with nothing in the way of guaranteed income coming to them.

Yeah, it's an important shift. Before we get into sort of the technical side of the business, I just wanna draw attention to your consistency as a marathon runner. It's impressive, and so I'm curious, how does that parallel your consistency as an advisor?

I always think about if those around me had to use one word to describe me, it would likely be consistent. I'm also very Type A, and so I think it's only fitting that I, schedule my suffering to go along with my hobbies. So I carry out marathon training right now. If I looked at that end goal of running 26.2 miles, no matter what the conditions happen to be on that day or how I'm feeling, it would be really tough to start the process. But with marathon training, you take it day by day. You start to look forward to some of the track and speed work days to get those endorphins, feeling like you've accomplished something. And financial planning is very similar. I get to help clients build out a roadmap, check boxes along the way, focus on progress, not perfection. And so they align really well.

That's great. On those rainy days and you've got those long runs, you know exactly what you're in for on race day.

And no one else is out there, right? There's something really fulfilling about that.

Totally. As a personal aside, I remember training for my very first marathon, the Grandma's Marathon.

Oh yeah.

Which is a perfect first marathoner ever run, 'cause it's a slight grade downhill until the finish. And I remember on a rainy day going out for a long run. I had a 20-mile-long run. It was pouring down rain out. And my wife said, "What are you doing?" I said, "Well, I don't know what race day is gonna look like. It might be rainy." Sure enough, it never rains at Grandma's Marathon except for the day that I showed up for race day.

And you were prepared.

I was prepared. And I think that draws the same conclusion as to what you've been talking about. You're helping people prepare for their futures no matter what.

Correct.

Okay, so your clients, uh, I hear describe you as someone who brings depth to planning, and I want to unpack that because this term defensive planning I haven't heard before, and I'm curious, how do you approach financial planning for affluent, ultra-affluent families, and what is this definition of defensive planning? It's something different and I haven't quite heard it before.

Right, because there are so many advisors who spend a lot of their time talking to clients about investment alpha, And we talk to clients about balance sheet alpha. So we don't go into client reviews focusing solely on what's going on from a macro perspective. Is there going to be a recession? Which asset class is out— going to outperform which? And that's not the hot topic of conversation all the time. We talk about growing, protecting, and diversifying their balance sheet. I share with clients all of the time that if we outperform the S&P 500 every quarter or every year, and they run out of money at 75, ultimately we have failed. And so there is more to financial planning than the aggressive piece, which is the investment management. There is defensive planning. And if you're ignoring that part of the planning process, I don't feel we're doing our job as an advisor.

Okay, so let's flip the script. What happens when you sit with a family with net worth in excess of $10 to $20 million and maybe they're not worried about running out of money? What does that look like different?

So when we sit down with these clients, they tend to have a really well-designed investment portfolio, perhaps a smattering of products that they have accumulated along the way, but there's no real synchronization to it all. So that's where we come in to connect all of those pieces, often playing the role of quarterback, right, over their entire financial plan.

Got it. So that's a more comprehensive, I think I've heard the term holistic in some way, shape, or form, but this sounds like a much more creative planning approach as you describe defensive planning. Okay, so let me shift then and ask, how do you bring creativity to planning while still staying grounded in some of these fiduciary principles?

So our, we hear this all the time, our fiduciary duty is the lens, the creative planning strategies are the approach, and some of these commission-paying insurance-based products are simply the tools to help us get there. If I know of a way to create a process for protecting excess gains when the market gives them to us, as it has over the last 5, 10 years, and I can help someone create guaranteed pension-like income for the rest of their life while not impacting in a negative way their overall balance sheet growth, how do I not bring that to the table? I would flip it and say if you are not talking to your clients about these things, you are potentially not acting in their best interest.

This has been a big trend in the RIA community at large, is a, a much broader shift to resourcing lots of the different products and services other than just the pure investment management and expansion of these family office services, risk products, estate planning, and trust. It sounds like your firm is pulling all of that together.

Yes, and we have for years. This has been part of our planning structure from day one. So now as we see some of the broader marketplace starting to shift in this direction, it's fun to be a little bit ahead of the curve.

Oh, that's great. Terrific. As you look ahead, how do you see artificial intelligence influencing the advisor's role, and where do you think the human judgment will matter even more?

AI has to be thought of as an asset. I think about day-to-day examples in our own firm. For me personally, having the ability to have the AI note-taker as part of meetings, reconciling the notes, summarizing the tasks and opportunities, creating the executive summary that can go out to a client moments after the meeting ends shaves off at least an hour a day of my time. Let alone the impact on the broader team. So if we expand that across the course of 6, 12, 24 months, this is incredibly efficient for, for our, our industry. Now, I don't think that this replaces what we do in any way. Our why at Socium Advisors is that we are committed to being the first call when life happens.

That's a big mission.

It's a big mission. And I don't see how an algorithm in my lifetime is going to be able to replace that.

This is a silly question, but it came up in a breakout session on AI here at the Women's Conference today. Have you observed clients showing up in meetings having done their research in ChatGPT or Perplexity and saying, hey, I think I've got an advice already drafted up here, Michelle, what do you think? Can you review this for me?

Yes, absolutely.

You do see that?

Oh, yes.

No kidding.

Yes. AI influencers, as this particular woman mentioned, sometimes it's more explicit. They're sharing that with you. And sometimes it's more implicit of, I just happen to be thinking about this and come to you with 5 paragraphs on a topic that they've never brought up to you before. So, you know that it's there.

So how do you do that without sounding defensive or like what's your— what advice do you give advisers and the next gen you're developing on how to handle these situations?

Yeah, I think you have to approach it from an empathetic standpoint. And the example that she gave, I would echo 100% that we have to sit with that client and get to the bottom of what is concerning them. They are clearly bringing this to the table because they are worried, they are anxious, they are hearing about something from friends, counterparts. And so they have gone to the trouble of finding this. We have to get to the ultimate solve. And oftentimes using a third party, not related hypothetical situation is a really great way to get to that point where you can talk through examples or situations of others that are related and maybe why that is not the right path or how that didn't work out as well as they may think rather than, going in and attacking the solution that they've brought to the table or the new concept.

It's absolutely fascinating. It's something I hadn't considered until I learned that today.

Yeah.

What's your take on some of the tools and resources in the AI space? Anything else in terms of how you think about AI influencing what's going on in your practice? And I heard the NVIDIA CEO on a podcast earlier today say something to the effect of, that task jobs will be gone in the future and knowing the purpose of an advisor, the purpose of, you know, the role, in this case advisor, is really where it's at. And I'm curious just what your quick take might be on AI for the future of financial advising.

Yeah, I believe what he said is true. All of the tasks, data management, day-to-day, that can be taken over. And if it creates more efficiency across the board, it will in the end elevate some and make others less relevant. So you have to put yourself in a position to be relevant. And again, that human element that AI cannot yet accomplish is where we fall.

Okay, that's terrific. Hey, let's shift gears from your personal approach and thoughts to Sociam Advisors for a moment. As a partner in the firm, I'm just curious about your firm's growth story. What I know of it, it's unbelievable and remarkable. Tell us a little bit about Sociam Advisors.

Well, going from $12 million in AUM in 2010 to $2.6 billion today.

It's extraordinary.

It's extraordinary. And it's also not for the faint of heart. We have had to break and rebreak and rebuild things over the years, and we've always focused on organic growth. Our marketing our marketing strategy for the first 10 years was to brand ourselves as the place to bring really incredible clients. We've built out the firm, we have the planning capacity, we have the team, we have the capabilities, the expertise, and now we are transitioning from that within just the Northwestern Mutual framework to bring us your best client and your two best clients to other advisors within the firm now to we are still the best place for your entire firm to come. So it's the next phase.

M&A is starting to pick up.

M&A is picking up.

Well, you've been upfront about M&A being complicated. I've heard you speak about that. What do you think are the main challenges in integrating advisors and their clients into a firm like Sociam?

I'll be honest here, Ray. I have been apprehensive about M&A for years. I think back to the cozy, less complicated firm we had 10 years ago where there were 9 employees and we were just doing our jobs, serving our clients. And I thought, why do we have to complicate that? And we did an acquisition several years ago, and I took on the advising for probably about 85% of the, the clients. And what I realized was most of those clients were not 100% well planned. And I thought, this is it. This is the catalyst. We have to get our planning strategies in front of as many clients as possible. And how else are we going to do that without M&A growth?

It's funny, as you tell me that story, it sounds like it's a deep connection and rooted to how you got into the profession in the first place.

It is.

That's really interesting. You've come full cycle.

Yeah.

So as a partner, you've been challenged and pressed by others in your firm to adopt some of this M&A, and it really does sound like it's working out pretty well for the firm.

It is.

Okay, so when you're a firm, I want to dig into this a little bit because this is the hot trend. Obviously, there's a big focus on organic growth, and we're seeing that elevate, but yet the quarter after quarter after quarter record M&A activity in the RIA space. It's always interesting to see how firms go about acquiring other practices and how they approach evaluating and identifying some of the planning gaps, you know, where they can increase their impact and influence. Like, just curious, I can imagine it's challenging at times, but how do you go about critiquing other advisors' work when you're bringing in a business? You know, calling somebody's baby ugly isn't Pretty, right?

Right. We do our best to not go about it in that way. Well, that's good, right? We know, and they at some level know, that there is a gap, right? We have yet to have an acquiring firm or yet to acquire a firm who comes to us wrapped up in a bow, humming along with perfection. They have it all figured out. They just wanted to join forces. Because, and so we know that there we are going to find something. And I think of it less as critiquing, but being more additive. And if we can get that advisor to get on board with that, ultimately disarm them and they are happier that their clients are better taken care of.

So it's really reframing.

It's reframing.

Got it. That makes sense. I know organic growth continues to form the foundation of your strategy. Why do you believe depending solely on acquisitions are a risk for any independent advisory firm? Because there are some out there that are doing lots of integration and aggregation, and that's their sole focus. What do you think are those risks?

They're huge risks. Without organic growth, there's atrophy. And fortunately for us, growing up in that Northwestern Mutual framework, client building is in our blood. It is inherent in what we do. And so we really focus on that organic growth. I told Scott from day one that I did not want to produce, I did not want to sell. And 5 years later, I said, Scott, I'm not going to sell. And here today, even thinking back on that, I still don't sell. I'm one of the top-producing partners within the firm, But I plan and I educate and I build relationships and clients naturally take the next step.

You're trading on trust.

Trading on trust.

You're teaching others in your firm how to build that trust and then lay a plan out for clients to step into and co-create that together. It sounds like that's working well for Sociam Advisors and for you and others in your firm.

This is what I've observed of one of the best advisors I've ever seen, Scott. And now we're pushing it down to the next generation as well.

We're going to talk about that in just a moment. I've often said that growth, especially organic growth without a scale plan, is kind of chaos. And that chaos is turnover of talent, loss of team members, degradation in client advising and service. But if you scale without growth, it's kind of bankruptcy. You know, you get a big team and no revenue and the like. Tell us about how you scale at a pace that keeps up with this extraordinary growth rate? It seems almost impossible.

Yeah. So we are always building, recruiting, building a bench, evaluating talent. It's, it's the only way. And now here we are 15 years into this journey. And after breaking and rebuilding, I think we finally have the right client service model in place. And so now it's far easier. We, we just have to attract the talent and continue building it out.

So I get asked all the time about organizational design to go from $12 million to north of $2 billion and on your way to $5 billion. It sounds like at the growth rate compounded the way you're going, that's where you'll be in short order. How have you organized pods, teams? What does the support model look like to ensure profitability as you scale?

So we have pods and service teams for each of our advisors producing private wealth advisors. And they're all based on revenue metrics. And so some advisors may have a financial planning associate and a client service associate. And for others, if the revenue is there to justify it, they may also have an advisor on their team. They may have an executive assistant. And so it's less about the number of households and number of clients because we all know that that labor can be varying amongst different clients. So we base it all on revenue. Keeping the service models revenue-based makes it really simple. If we have an advisor or a private wealth advisor screaming for more support, we can encourage them to build the revenue and the support will follow.

It's funny, I heard Mark Dubergen many, many years ago talk about the revenue per professional, revenue per client, and that the only ways to scale was to really understand the profitability not just the revenue per professional and per client as well. It sounds like that's what you're doing in the pods and the structure you've got.

That's right.

You've built a large client base yourself, but you're also pretty disciplined about who you work with and how you've created a scale plan for transitioning client relationships to other team members. I hear among many advisors, as they grow, they run out of capacity. You've obviously taken on a lot of responsibility as a partner of the firm, as the largest producing partner there. I'm curious, how does it work for you? How do you think about the what is the right client mix for you and when is the right time to transition relationships to others at Soseum?

Yeah, so again, it really goes back to that revenue model and the metrics around the revenue. I can also feel it when I'm getting stretched, but we can't run an organization of this size on gut feel and how someone is feeling at a particular moment.

Fair enough.

And so we know that if things are running a little too lean or a little too profit-heavy, something needs to be sniffed out there. And so we're really intentional about looking at these things on an annual basis.

Got it. That sounds like mathematics is helping solve the equation a bit. You've mentioned that if a firm grows through both organic growth and M&A, you're always restructuring your client roster. What motivates that discipline? What does that really mean?

So being committed to the 10-10-10 growth model that we are. We have each advisor committed to growing their current client revenue by 10%, new client revenue by 10%, and 10% by acquisition.

Okay, so that, that, let's break that down. That's the 10-10-10 growth model. I've not heard anybody talk about it quite like this. So just go back through that. 10%, uh, new clients, 10% of what?

So 10% of 12-month revenue.

Got it.

Increase current clients by 10%, new clients by 10%, and acquisition will provide the other 10%. And if we have every advisor within the firm doing that on whatever their starting point for revenue is, we're going to grow between 20% and 40% each year.

Oh, you obviously have the track record to prove it.

We have.

So this 10-10-10 works. That's impressive because that's really breaking the rules when we see the RIA community at large, 70% of returns it's reported comes from market movement.

Right.

So you're really out there in a new and different way, paying attention to the growth of the firm and not sacrificing the quality of the advising you're providing.

Mm-hmm.

You mentor advisors, I'm interested, on a day-to-day basis who now handle the majority of the daily client tasks. What does creating your replacement really mean to you?

I firmly believe that shifting client relationships is a net positive for the clients, for the firm, for the developing advisors. I go through this process at least on an annual basis. I just went through and shifted 75 clients to the next generation. And if we have built the client service model and the planning process the right way, the client's experience does not skip a beat. The clients get to work with a new perspective, someone who's hungry. I am no longer feeling like clients are on autopilot or feeling complacent because I've had the same book of business for the last 10 years. So it's, it's really a win-win structure.

This is a transition of trust conversation. Those transfers for many advisors is really difficult.

Really difficult.

So the letting go to grow piece, uh, what advice or guidance would you give advisors listening to this episode and thinking about, hey, how do I create a structure where I have unlimited capacity to continue to grow? If I build out my team, how do I get rid of that head trash, like I'm the only advisor that can really serve this client?

Well, if you're not adapting to that, you will eventually run out of capacity. So there will be an end to, to your growth level. And again, as I talked about shifting 75 relationships over the last quarter, that didn't happen over a 3-month period. It's been building for years. So these advisors have been interacting with clients, helping them transactionally, transactionally, helping them with their planning, participating and observing in meetings. And so when it comes time to formally transition, it's not a surprise.

Got it. There's some patterns emerging here. There's an intense focus on the quality of your deliverable. There's an intense focus on this transitions of trust and building out the capacity for the organization with an intense focus on growth. There's a pretty magical formula here that seems to be setting Socium up for what's next. This is interesting to me because I'm seeing a pattern in the industry where there's a much higher degree of specialization. Yet what I've learned about Sociam is you serve clients ranging from the mass affluent to the ultra-high net worth. Now, I understand you're focused in the ultra-high net worth and high net worth spaces, but you've got a team behind you that really hits the entire range of affluence in helping people with financial security. How do you guys balance the inclusivity with the realities of revenue and profitability talent and capacity, it seems daunting and overwhelming, right?

Scott's vision has always been very clear that he did not want to build a firm that says, call me when you have $15 million for us to manage. We wanted to build a firm that provides really solid financial planning for clients that are willing to engage in the process. And if we can zero in on those revenue metrics, and it is profitable business, why can't we also provide services for the entrepreneur who has most of their net worth tied up in their business for a period of time, or for the next generation that is just getting into the workforce and starting to accumulate?

It sounds like there's got to be a strong talent strategy if you're going to get that right, having different levels of talent and skill set and competencies and experience at different levels. Tell us a little bit about the distinctive parts of Socium's model, specifically the mentorship system that's been developed inside your firm. It sounds like it's got to be a strength for where you're headed.

It really is. So we work to formalize what happened more organically over the last 10 or 15 years. As I mentioned, I observed through osmosis Scott's ability to engage with clients, not come in with a hard sell, really just plan. And now we are bottling that up and moving it to the next generation. Scott shared during a leadership meeting on Monday morning, our success will be measured by how well we can develop talent.

There's a Marshall Goldsmith quote there, uh, what got you here won't get you there. And in order to succeed, a great leader has got to develop talent who can develop talent.

That's right.

So what are the non-negotiables for advisors who want to progress in your firm?

The non-negotiables are adopting the Socium way of planning. So we do not want to be the firm where advisors come to hang their sign or hang their name on the door. We want a consistent client planning experience across the entire firm. Everyone brings their own style and authenticity to the table, but in the, in the end, we want most of the planning deliverables to look the same across the board.

Got it. It seems obvious, but for most firms who are doing lots of aggregation and not integration, that isn't always the case.

Right.

So balancing the organic growth with this M&A activity and making sure everybody's aligned around the quality of the deliverable, that's the secret sauce.

That's right. That's what's going to help us carry out our why. If we want to be that first call when life happens for clients, We have to ensure that all of our advisors are running with the same mandate. Neither is right or wrong. This is just the way that we have chosen to build our firm.

So I'm curious how you know when someone's ready to sort of leave the nest from a support role to advising clients on their own, you know, the scorecards, the designations, like what's in the, what's in the develop talent? Scott talks about developing talent, you know, on Monday's leadership meeting. How does that come alive? Day to day?

So each quarter as we're working with advisors and through these mentorship programs, we have mandates, learning objectives, scorecards. They're having weekly one-on-one meetings with their mentors. There are targeted learning objectives throughout the quarter. We are doing peer feedback, so live mock client meetings amongst their peers. And everyone realizes that there is significant value in this. So people are candid, people are vulnerable, and we get real impact from that.

Break that down. What is a, what is a mock client meeting like? What does that training look like inside your firm?

During our broader advisor meetings, after someone has gone through the first quarter of a mentorship program and focused on 5 to 10 learning objectives, we will have that advisor present with another advisor standing in as the client what they have learned over the quarter, go through a full advisory meeting highlighting some of the targeted objectives for that quarter.

Do they act like tough clients? Do they act like a normal client?

You never know. Yeah.

Oh, interesting.

You could be in for anything.

Got it. And that really raises the game, I guess, for everybody.

It raises the game, but people respect the process, so they take it really seriously.

That's great. So they've been observing a while. Now they're actually in mock sessions, what's the observation look like when they get a live client? Does the partner still stay involved in those kind of meetings?

Absolutely. Then there's the period of time where they are running the client meetings, but the partner is still involved in those client meetings. We know that those at-bats, those experiences, that's what ultimately gets them to the next level. I think about drawing on my own experiences over time. Had I not started in 2005 and gone through the financial crisis, I would not be the advisor I am today. That perspective, that experience has, has made me the advisor that I am. And so when COVID happened or Liberation Day and most of my clients reside in the D.C. area and they think the world is ending, I have that experience and that level of perspective that I can bring to them and other advisors observing how I'm interacting in an empathetic way with those clients. That's really invaluable on-the-job learning.

That's great. How about this capacity and talent? Business development does not sound like it's been a big issue for Sociam. The lead gen continues and the M&A now has really picked up. But the bottleneck— everybody's talking about capacity, capacity. Where do we find the talent? McKinsey's reporting a 100,000 advisor shortfall. Like, what's Sociam doing to attract the talent so you can actually develop them?

Right. And growth through M&A is almost like having a baby. You're never really ready.

It just happens.

You just have to hope that you have prepared enough. So we don't have advisor pod teams sitting at desks twiddling their thumbs waiting for the next acquisition to roll in. But we are constantly recruiting, building out that bench. One of the pieces I think we've become far better at over the last few acquisitions is also evaluating and pre-integrating some of the talent that is on the current advisor teams that we're looking to integrate. And if we can really utilize and speed up that process, that helps us as well.

So there still is a bench of talent.

Yes.

Everybody's constantly learning and growing, and there's a development plan in place for everybody, it sounds like. Okay, so how do you cultivate individuals on the team who are helping to solve problems and not just escalate issues if you're in a service capacity. And like, what's that look like at Socium? How do you guys handle that?

Well, Ray, I also want to mention, just going back to the last question, that you posed a question to me specifically in a ClientWise coaching meeting 10 years ago, and Scott and I are at the group session and you said, Michelle, what is the biggest challenge facing your firm right now? And I, without hesitation—

Yeah, this is 10 years ago.

I asked you 10 years ago.

I have no idea what you're about to say.

And I said, too many clients.

Wow.

And you really encouraged me to think about that differently and said, would a company like Apple ever have that issue? and I have never forgotten that. And so being where we are today and being— having built out this scalable service model, it's something that I reflect on often. And now I think we've solved for that really awful problem of, of too many clients.

Oh, that's great. So there's blue sky.

Blue skies.

I love it. And, you know, it's funny, we talk about growth and the shifting talent pool that you have. I appreciate you sharing that story. Culture seems to be at the heart of your competitive advantages. How do you describe the culture? And as I've gotten to know your firm over the years and have coached your co-founder, Scott Underwood, this is an intense momentum kind of thing going on for Sociam. To be part of something that's growing at this speed with an unlimited upside in terms of clients to this point you just provided, I'm curious, what do you mean by this intense momentum and what is it like culturally at your firm?

Intense momentum is probably my favorite of our 5 core values, and it's exactly as it sounds. It is very intense around Socium advisors. Many of us often joke, could we just have regular speed momentum from time to time? Does it always have to be so intense? But anyone who's a part of the team embodies this in what they do. They know that we're going to work hard. They know that we're going to play hard. When I am interviewing a candidate to work at Socium Advisors, I often lead with this because if embodying intense momentum is something that scares you, need not apply.

Got it. You're really clear about that.

We're very clear.

What are the other core values? You mentioned this one. What are the other four?

Client-centricity, collaborative engagement, personal responsibility, and continual innovation.

How would you sum those up? Like, give a little description on what some of these really mean to Sociam. How do they come alive in your firm?

Collaborative engagement is at any given moment you could walk through our office, which is an incredible space, incredible environment to be for our employees, and you will find pods of varying team members or departments working together. We really encourage that level of collaboration. Client centricity, pretty self-explanatory. We focus on and put our clients first. We're always doing what's in the best interest of the clients. Personal responsibility. Obviously, we want all of our team members to take on their own personal responsibility and continual innovation. If we are not innovating and reevaluating things like the integration of AI or other fresh ideas and reevaluating how they may have changed or shifted, will die old and stale. So we're always looking to innovate.

I hear Socium's a fun place to work as well, and I've heard about this Big Cedar Lodge annual event. What is that gathering about and how does that build the culture that you've got today?

It's incredible, right? We started this tradition probably 6 years ago. There were perhaps 9 attendees at the time. Big Cedar Lodge is a luxury wilderness resort It has everything from—

sounds like an oxymoron there.

I may have thought that in the past. It's now one of my favorite places to go. They have everything from world-class golf, very fine dining, to a luxury spa, fishing, painting, spa activities. And so we bring the entire team together for 2.5 days and we start kick off at the beautiful top of the rock. We have an incredible dinner, watch the sunset celebration, and we just spend a couple of days being together and human and thinking about how we're all aligned in this mission to serve clients. And we very intentionally spend time with team members, have fun, have meals, do activities, and we don't do any learning or formal agenda. We have a State of the Union address at breakfast as we adjourn on the morning that we leave, but we're really just there to have fun and engage with one another. And now that we are geographically spread over 5 offices across the US, it's even more imperative that we do these things. And I would say it has grown to be a large expenditure, but our best spend as far as what we spend on, on the team and engagement.

That's a pretty big investment, putting your dollars to culture and to building those deep relationships. When you're going through this rapid hiring, because it sounds like from 9 to— how many attended the last Big Cedar Lodge event?

52.

So it's a big expansion. That's rapid hiring plus all the M&A. How do you maintain culture during all of that? Obviously, Big Cedar Lodge— it sounds like this should be an advertisement for Big Cedar Lodge. But besides that, like, what do you guys do to keep up with all of that and maintain that culture and grow the culture?

It's always been one of our non-negotiables with growth. We're not going to sacrifice the incredible culture that we've been able to cultivate over the last 15 years just for the sake of growth. And so the runway may be a little bit longer with team members who are remote, but again, it's that collaborative engagement amongst departments, amongst service pods that we are getting team members together continuously, even if they're not in the St. Louis office, to continue to cultivate that culture that, that we have.

So I know we've only got a few minutes left. I'm curious if I could shift gears for a moment, if you don't mind. I want to talk about women in the profession for a moment, both for clients and advisors. There's obviously a big transition in wealth underway. There's a high degree of wealth inheritance by women, and you've said this career can be extremely lucrative and flexible for women willing to do the work early What advice do you share most often with advisors in the space thinking about serving more women in the future?

The best advice I've ever received that I utilize professionally and in my day-to-day life is write a handwritten note. I write 10 to 30 of those a month. I make my boys implement the same, and it's a lost art.

It is a lost art. So that seems really obvious, but it does sound like it makes a big difference. That's great. How does meeting with both spouses at least once a year, if not more, strengthen continuity? Talk a little bit about how you're including others, especially women, in the conversation.

I will require meeting both spouses of my clients at some point, whether it's at least once a year or once every other year. We see the entire spectrum. So we see clients, married couples where one is the breadwinner, one plays more of the CEO or CFO role. So integrating both of them leads to more client continuity. We know that engaged clients are also the stickiest clients, and we also know that life happens. People get sick, people get divorced, and if you are not developing and cultivating the relationship with all of the parties involved, you're leaving yourself vulnerable.

There's a little secret sauce in here, and I'm interested in, in how Adsoseam's advancing the more female advisors. Like, what are you doing to prepare for the clients of the future, especially as it relates to female advisors?

From constantly recruiting, acquiring, and mentoring that talent, we're doing everything we can to promote and develop more female advisors.

You have women's programs or events on your team? Like, what specifically are you doing?

We sure do. So we have— I've worked closely with our marketing team to develop our women's program over the last few years. This includes things like luncheons in all of our target markets. And so one of my favorite stories that have come of this is hosting our women's luncheon in the D.C. area. So we'll focus on things like financial literacy, learning, engagement, community. And as we adjourned for the day, I watched ladies at one of the tables who walked into that room not having known one another all exchange contact information. So now the clients are The clients are interacting with one another and they built over a 2-hour luncheon relationship strong enough that they wanted to stay in touch with one another. And looking at that table, it was such a diverse crowd. Their paths would have likely never crossed had it not been for that event. But the best part was watching them all attend the following year and reconnect. And they had been connecting over the, over the past year.

So their relationships have grown. So it sounds like you're building more community-based for advisors and for clients.

Yes.

Just out of curiosity, there's a, there's a big shift and the advisors entering into this profession, especially for women, just sticking with that for a hot minute, what is the, what does it mean to bring somebody new into the profession as a female advisor? Like, what does that development plan look like? Obviously, yours began you know, with portfolio management, that sort of thing. What do the college campuses look like today? Are you bringing people from other professional places where they were CPAs or attorneys? Like, what does that pathway look like for more women at Socium?

I think right now it starts with our internship program. So this is something we've developed over the last couple of years, and I spent a good part of last summer with two of the female interns that we had at the firm. And these are women that we are breeding to come and work with Socium, come and work at Socium when they graduate in 2027.

So you're really deep in—

Starting early.

Yeah. Okay. And it looks like you've hired some pretty impressive people into that internship program.

Okay.

So this has been pretty rich and insightful. If you could offer just one piece of guidance to advisors listening today, what would it be?

Complacency is death. Never stop growing, learning, innovating.

And what do you want people to understand about the impact of this deep planning and how it can have an impact on client relationships?

I would bring that back to our why and wanting to be that first phone call. Sometimes those phone calls are joyous, sometimes they are catastrophic or life-altering, but I have never had a client call me in tears over a double-digit investment return.

Wow. That says it clearly. Just out of curiosity, curiosity as we wrap, what is it that excites you most about the future at Socium and maybe about the profession at large?

Growth. I love what I do. I love the end deliverable and the planning work that we get to do with clients. And now being in In this arena where the opportunity in front of us is boundless, we get to provide that exponentially for hundreds or thousands of clients over the next 20 years. If I can continue to develop the next generation of advisors and bring the SoCiem way of planning to more clients, that is so exciting to me.

Hey Michelle, thanks for joining us on The Way Forward today.

Thank you.

Your story for me highlights that growth isn't just about gaining new clients or assets or acquisitions. It's about maintaining standards and growing your impact. And it's about having the discipline to let go of what no longer fits, the dedication to develop others, and the courage to build a firm that scales without compromising its mission. You know, I learned today that you've really demonstrated what it means to lead with intensity and base everything on thorough planning and cultivate a culture that attracts and nurtures talent. You've also reminded me and all of us listening that the next generation of advisors doesn't develop by chance. Even Scott has said it's deliberately built. For our listeners, whether you're navigating M&A, scaling teams, or elevating planning, Michelle's insights provide a strong framework for what's ahead. Until next time, I'm Rais Ghilfani, and this is The Way Forward presented by Barron's.

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