Sammy Azzouz: Mastering Organic Growth as an Independent RIA

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Organic growth and independence— those are two keys that today's guest focuses on, and it's helped his firm grow to about $2 billion in assets under management with no acquisitions. Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor The Way Forward podcast. My guest today is Sami Azouz. Sami is the president and CEO of Heritage Financial. In today's conversation, we explore several areas, including how Sammy transitioned into the CEO role as he took over for company founder Chuck Bean, who is a Barron's Hall of Fame advisor. We also talk about how they run their strategic planning process and why it goes way beyond just the numbers. We explore the four focus areas of the firm. We talk about why they have no service advisors and instead require that all their advisors develop new business. And we talk about how they deliver organic growth when so many other firms are struggling to grow beyond just what the market delivers. And make sure you listen to the end as Sammy shares some of his favorite books, excluding his own book, Beyond the Basics: Maximizing, Allocating, and Protecting Your Capital. With that, here's Sammy. Sammy Azuz. So you got promoted into the president and CEO role as opposed to being the founder of the firm?

Absolutely, yeah. Our founder, Chuck Bean, is a Hall of Fame Barron's advisor, founded the firm over 25 years ago, and I was the president for the last few years. And then this year he transitioned into a chairman role and I became president and CEO. Okay.

Tell me a little bit about that transition.

It was very, I think, well thought out by our founder who has been proactive his entire career really with thinking through what the firm needed to do next. And a few years ago, working with us as a management team and with some practice management consultants, we all realized that this transition was something he wanted to do, something the firm needed to have happen eventually, and that we wanted to be very forthright and give people years to kind of get used to the idea and the concept that this larger-than-life founder was going to take a half or a quarter step back at some point in the future, and so that the employees would be comfortable with it, the rest of the management team, the client base. And so for years we've been telling people that this is going to happen. And so by the time it did happen, I did have somebody come by at my office the other day— well, it was early January— and said, you know, I never officially congratulated you, but I feel like this has been going on for a while. So I think it's very important to lay out a plan and announce it well in advance so that people can get used to it, particularly if you're making such a major transition.

So it wasn't a clean break per se, it sounds like.

Yeah, no, Chuck is still very heavily involved in the business, in the strategic planning, the financials. You know, I talk to him multiple times a month. We have a more in-depth meeting quarterly. Still an ambassador to the firm, very much passionate about keeping Heritage independent, employee-owned, and on the same pathway, but just not doing the day-to-day CEO job.

How do you two define your lanes? So as a larger-than-life founder of the firm, I would imagine perhaps a little bit of his identity might be wrapped up in the firm. So how has the transition been for him to step away, and how has it been for you to step into these big shoes? Because they say worst thing you want to do is like follow someone who's been super successful.

Yeah. So we have been working with a business coach for the last few years as a management team. And as we got closer to the beginning of this year, Chuck and I and our coach kind of laid out what the chairman role would look like, what the CEO role would look like so that there wasn't a ton of overlap. The things that he still wanted to be heavily involved in and decide, the the things that it was okay for me to run with. So it does require some planning. I think it'll be customized to each firm and each personality and the things that they would like to do. I was clear that I didn't want to be kind of a junior CEO type, and he was very accommodative of that. He definitely wanted a lot of the decision-making to be taken over by me and our management team. But there are definitely things that particularly related to the financials, the strategic direction of the firm, that he wants to and deserves to be heavily, heavily involved in.

And you don't have to share percentages, but how does the ownership structure evolve? Was there a financial transition plan for him as well? How did that all work?

Yeah, I think in parallel, not in tandem with this process, but we do want to remain independent and employee-owned, and we want our employees to have the opportunity to be shareholders and keep this going that way. And so, for years predating the conversations about a management transition, we have been doing equity transactions internally to diversify the shareholder base. And that is something again that I think Chuck's been very proactive about. Not a lot of founders do that as early as he did. He's a young guy, but it's been something that's been happening along the same timelines as this transition.

And in terms of those equity transactions, do your, your team members have to buy in? Is this when they get promoted to a partner level that they have that opportunity? Is this like true equity ownership? Is it like phantom stock or how does that work?

Yeah, no, it's true equity ownership. They are buying in. We are not granting shares. Otherwise, I don't think the equity transition happens nearly as quickly as it could or should. So they are buying in. You can get into the technicalities. We're an LLC, so we don't have partners. So we haven't called them that. I know a lot of firms do and I can understand why. It's easier to understand. But our management team, our leadership team, they are not the only shareholders. It expands beyond that group.

Okay. And as you're still going through this process, what would you say are maybe one of the 2 or 3 key learnings through this process that, gosh, I wish I would've known this at the beginning of this process and didn't have to learn it the hard way?

Yeah, I think that's a great question. We'll see. I'm still a few months in. Maybe check back with me, but I think there are certain parts of the business as an advisor who's good at planning, business development, investments, you don't know as much about, you know, operations, compliance, and that's now everything is under you as the CEO. So there's no longer the excuse of, well, I didn't really know how that worked or I didn't know how to do that. And so I think there's been a little bit of a learning curve, even though I have a tremendous team in place for all of those areas. For me to be able to understand and contribute in some of the areas that you wouldn't think you would need to know as much about as a client-facing advisor, I think that's been a little bit of a learning curve and something that I feel like in the next year or two will be under my belt. But I haven't had the need to be as exposed to those things.

Not everybody wants to be a CEO. A lot of advisors want to help clients. They want to just be meeting with clients. They want to bring in new business. They enjoy that part, but they don't like the management part. They don't like dealing with drama at the office.

Business.

Yeah, those sorts of things. So tell me about you. What is it about you that makes you want to be a CEO and not sticking with being an advisor?

I think it's loyalty to the firm. I think the firm and my partners, the other employees, the shareholders, and our founder needed somebody to step into the role. And that was, you know, an honor to be considered for that. And I think if the firm didn't necessarily need that, I wouldn't have been as driven to pursue that path. But it's, you know, Heritage is my home. It's the last place I'm going to work. And there was a need and an opportunity. And I had been doing more management over the years, even at a young age. I've had the opportunity to help build 2 or 3 wealth management practices. So I'm intrigued by the strategic planning. I'm intrigued by different pieces of the business. I don't mind managing people. I enjoy it. I've worked with a guy once who said, I don't like managing people and people don't like being managed by me. I— that's an advisor.

A bit of a self-awareness there, it sounds like.

A lot of self-awareness. I enjoy it. I enjoy helping coach people, develop people, helping them kind of unlock where they want to be. So that all kind of came together. And I think it's also important to progress in your career if you're going to keep working the hours that you're working and staying plugged in. You want to have different challenges, you want to magnify your impact. And so that was the appealing portion to me.

So Chuck founds the company, most likely he's building the company in his image. He's creating a culture that's really built around who he is.

Absolutely.

Now you come in as the CEO, he starts stepping back to some extent. How are you trying to reshape, or are you trying to reshape the company more in your image?

I don't think trying to reshape in our image. We are different people. We have different management styles, different approaches, But there are things that are very strong about Heritage Financial that were brought forth from Chuck's DNA. Our tagline is every detail matters. The culture is extremely important, a good place to work with opportunities for everyone to advance and continue in their career development. So growing and growing organically and developing talent organically and focus on the client first and develop good relationships within the firm. Those are things that are all from Chuck and the early partners, not obviously not, not just Chuck. And those are things I sign up for all day long, and I'm very interested in continuing. And I know it's extremely important for us to remain independent and employee-owned, that we are developing talent organically, that we are growing organically so that there is a next generation to keep this going. So I would say those are all things that we're in alignment for. And if I wanted to take it in a different direction or I had completely different views, I wouldn't be in the, in the seat. Right. I wouldn't have been a great candidate. But our management styles are a little bit different. And that's where I want to have a little bit more of an imprint, not for the sake of making change, but just because that's how I'm going to be effective is if I can run our management team meetings a little bit differently, our strategic planning process to go a little bit differently. I think that is maybe where the stylistic things are evident., but the ultimate direction should be the same.

Yeah, and I want to talk about the strategic planning process here in a moment, but before we get there, is there anything in those areas that you just described in terms of what the organization has become and what's been important, is there any areas where you say to yourself, you know, I really want to accentuate these two areas more than we have in the past? So it's not changing what's part of the organization, but it's maybe addressing the emphasis and placing it stronger in a certain area. Is there anything like that that you're thinking?

I think that we have been institutionalizing the business over the years and we want to continue to go in that direction. And that's not necessarily a new point of emphasis, but maybe just continuing and staying strong in that lane. I don't know that there are big picture one or two new things or points of emphasis, It is more, I think, as we're bigger, developing full-time management and middle management, and also as the industry is evolving and you're getting these big competitors. And there's always been big competitors. You can overstate that because we compete with Morgan Stanley, Merrill Lynch, Goldman Sachs, JPMorgan, Vanguard, Schwab, Fidelity. So, the idea of an RIA becoming bigger and that's a pain point for us, I think, can be overstated. But You want to keep your eye on where the services are going and just make sure that you are staying competitive with those, even if you may not be as huge as some of those other players. So I think those are a couple of things.

You mentioned that your tagline is "Every detail matters." Now, I've been in environments where that can be a good thing and it causes you to really do well, cross your T's, dot your I's. And I've been in situations where it doesn't go so well and it creates an environment that's not great. How does your firm think about every detail matters? And can you gimme an example or two of how that is manifested in your company?

Yeah, I think the every detail matters definitely comes into play when you're talking about the wealth management services. So from a financial planning standpoint, there's nothing that we're leaving uncovered in our opinion. So we have an internal financial planning checklist. We have practice standards for how often I should be talking to you about the deductible on your car insurance policy, how often I should be reviewing your taxes, your estate plan. We have very detailed financial plans, very detailed net worth statements. And, you know, if you were talking to our investment team, they would share, you know, the same things in terms of their approach to money management. So the every detail matters isn't necessarily to nitpick or micromanage how people are doing their jobs as much as to leave no stone unturned from the client standpoint.

Now, this might sound like a random question, but you mentioned the internal financial planning checklist, and it sounds like you guys do a pretty comprehensive job. What is your definition of financial planning?

Yeah, it's a good question. To me, I think it's hard to understand some of these industry buzzwords, but I do think wealth management describes the practice very well. So you are talking about building a financial plan for somebody. You are talking about staying involved with them in their finances so they're protecting their assets along the way, they have the opportunity to accomplish their goals, they're growing their net worth, they're making good financial decisions, and you're managing the portfolio, their wealth, along the way. So financial planning, I'm less connected to the term these days because I do think it's more comprehensive, and I do think wealth management even though it can be generic and overused, is really what we are doing.

What do you think is the difference between wealth management and financial planning then?

I think financial planning can be considered more the building of a cash flow model, the building of a financial plan, you know, a one-time review of certain things like insurance coverages or whatnot and making recommendations. And I think, and maybe this is wrong and it's just in my head, but I do feel like wealth management is more ongoing and does include the portfolio, but it also includes the oversight to make sure that those things are getting accomplished. Clients have shared with us that they like the term that they've— some of them have come up with of gentle nagging. You have your homework follow-up. We're going to stay on top of you until it gets done. So I just think wealth management is a little more all-encompassing and proactive and making sure stuff gets done.

And I don't want to dig here, but sure. The term wealth, we can have different things that fall under the umbrella of wealth. For example, just like financial wealth, it could be spiritual wealth, it could be health wealth, it could be your knowledge and skills that enable you to produce income down the road. How far does your firm define the term wealth management?

It's probably a more traditional definition at this point. I think that some of those things, as they matter more to specific clients and specific needs we can, you know, dive into. But I do think it's a more traditional version of wealth at this point, which is why I would say largely a reaction to our client base and the things that we have heard from them in terms of additional services or additional types of conversations they could have with us. Our client base has tended to feel like, stick to what you guys do really well, right?

Yeah. So briefly describe what your client base is.

We don't have a client niche, so it's a big iceberg that's accumulated over the years. But everybody who comes to Heritage is coming to us because they want to get serious about their finances for some reason or another, whether it's a business owner who needs an exit strategy, whether it's somebody who's approaching retirement and wants to make sure that they could do that, you know, divorce, you know, loss in the family. They're starting to make big money for the first time and nervous about managing it themselves. So they all have this commonality of it's time to get serious about our finances and we need help to do it. So it does lend in, you know, the New England area to a lot of business owners. Corporate executives, professionals, you know, divorcees, widows, widowers. And I would just more think of it when we talk about our ideal client profile and who we want to market to, it is people who are getting serious for some reason, and they are in the kind of $1 to $25 million net worth or portfolio management size.

So as you're now the CEO and the president, And I think you've mentioned this idea of a strategic planning process. So tell me about your strategic planning process.

How does that work? Yeah, I think we have been a little bit deliberate in taking it in a slightly different direction. And the starting point for that was wanting to do strategic plan, which the firm has done all along, but wanting to continue the strategic planning process. And when I started to gather examples of strategic plans within our industry, They're very Excel-based numbers, lists, bullet points, SWOT analysis, things that I didn't find that exciting. I don't think the employees would gravitate to some of the numbers in there. You may not want everybody to know. And I started getting examples of strategic plans from outside the industry that were more descriptive documents, you know, visionary, almost like a lighthouse in the future that you can anchor to. And we were much more intrigued by that. Because we could share that across the client base. We could share it with anybody who asked. And you get a sense reading that document what's important to us, what are our key focus areas, what do we want to do over the next 5 years. And then we do an annual version of it where we talk about our strategic initiatives for the next 12 months. So I would feel very comfortable with anybody outside of the firm running through our strategic plan and looking at it. But I also wanted the employees to be very excited about it as well.

Well, you were kind enough to send me a copy of yours, so I've got that in front of me here, and I'm just going to mention what the different categories are that you discuss here. So you've got an executive summary, you've got a page there on your company, a little bit about the history, you've got your mission, you've got your vision, you've got your core values, you've got your strategic planning process. Then I think you go into like your—

Yeah, 4 focus areas.

Your 4 focus areas. So you've got one page on each of those focus areas. It's all nicely formatted. So this is a document that you give out to all of your team members, right?

Yeah. So we rolled this out for the first time a year ago at our annual staff meeting. Everybody had a copy of it. And then I had small group meetings with everybody to just get more feedback on the plan. And new employees get a copy of that and they review that with their new manager as well.

Okay. So I'm going to walk through some of this and I just want to get your, your reaction on this. So your mission here, you say, Our mission is to make a positive and lasting financial impact on the people in our lives and those we serve. So how did that come about? How do you feel like that is different than what 1,000 other firms could say?

I don't know if it can be, but to us it is. You'll see on the page, it is what we're trying to do. We're trying to do it for our client base, we're trying to do it for our team members, and we're trying to do it in our community. As a firm, we have a lot of, we think, financial expertise that we want to share with the people in our lives, friends, family, clients. We want to see our employees thrive in their careers financially, and we want to be involved in the community. We're heavily involved in the community and we want to improve the communities that we're in as well.

And then same thing with the vision. I'm going to read the vision here. It's a paragraph. So you say, we are a dynamic client-centric wealth management firm with a strong desire to deliver best-in-class wealth management services to an ever expanding group of clients in the areas we serve. Our focus is on organic growth, both with business and career development, so the firm can offer stronger solutions to more people through our employees' growth. Our independence and employee ownership allow us to share objective investment and financial planning recommendations with our clients and create exciting career paths for our employees through overall firm growth challenging projects, effective mentoring, and long-term retention structures. So again, is that just an internal vision? I would imagine. Yeah. Yeah.

Okay.

So go into a little detail on that, what that means.

That one is easier for me to maybe distinguish it from the rest of the industry. You see a lot in there about organic growth, organic talent development. That's something we take very seriously. There are other pathways to grow and acquire talent in the industry. Through M&A or strategic acquisitions. We are not doing that. We are focused on doing a good job with our clients, doing a good job with the advisors that our clients work with, growing primarily by word of mouth and new marketing strategies, and also by investing heavily in the career development of our people. You can think of growth in a variety of ways, but for us, growth is extremely important so that the people that we attract to the Heritage banner have the opportunities to develop and advance in their careers and never have to leave Heritage for a more thriving or dynamic opportunity. So that's what's trying to be fleshed out in that paragraph is our passion and my passion for those things.

Now, your mission is one sentence. Your vision is a full paragraph. I can certainly understand that everyone on the team would remember the mission. Correct. But they would probably not be able to state the vision verbatim. Correct. Are you okay with that or?

I'm not fully okay with it. I think sometimes when you write by committee, you end up getting a lot more words in there. And I think that happened with that paragraph a little bit, to be candid. But that is the launch point for where do we want the firm to look in 5 years?. And so I think that page is important. And if there's a little bit more verbiage in there, then otherwise I'm okay with it.

It's explanatory. Yes. And then you've got a few bullet points down here as well that go into some more detail. So, so no excuse for anyone on the team not knowing the direction of the company and what you're trying to accomplish and what you stand for.

So that comes through very, very clear. I think they have the opportunity if they want to know what we're thinking and where we want to go.

Yeah. And then you have core values. You have 3 here: teamwork, integrity, and excellence. How did those come about? Have those been core values since the beginning, or is that something that's really developed over time?

Those have been core values for as long as I've been there. So, yes, from the beginning. I think we are very team-based at Heritage Financial. Your coworkers are relying on you to get stuff done and move things around the ranks. We're not siloed. So teamwork is extremely important. Being accountable, doing your job well, those are core values. Integrity. Goes without saying, those are things that, that are important and things that we talk to folks about in our coaching and in our annual reviews.

Okay. And are you using those core values in your decision-making process? Do you have situations that come up and you say, well, what would our values tell us in this particular situation? Does that happen?

I don't think that's had to happen too much. Obviously not because we're not thinking of our core values. But to me, there's not really two paths chosen. One, you know, is adhering to the core values. One's not where we are using using that document in our decision-making is not to have mission creep, not to go off in, you know, areas that were never identified as priorities, to make decisions that would be consistent with the 4 focus areas and where we want to be over the next few years.

Okay, so let's go into these 4 focus areas. I think this would be a nice launching pad here. So in the strategic plan, you've got these 4 areas. The first one is a focus on employees. It's about employee engagement, career development, and talent retention. So Tell me a little bit about that one.

You know, some firms do an employee value proposition. Some firms put it in a strategic plan. But we want the employees to know and we want the managers to know, we want the leaders of the firm to know that our employees are extremely important. And now that can sound like an obvious statement in a professional services firm. But what does that mean if you're an employee of Heritage? What's that commitment? And it's not, you know, advancement just because you've been here for 2 years or 4 years or, you know, moving up the banking ranks. It is— these are the things that we want to build as a platform for you. This is how we're going to do it. And this is the opportunity that you have as you plug into it.

Okay. So I see things on here like develop a long-term incentive plan for our employees, standardize an employee training program. You may have said this earlier, but is this like a 1-year plan, 3-year, 5-year plan in terms of how you're building this out?

That document is a 5-year plan, the core of the document shouldn't change much year to year. Okay.

Within the 5 years. Okay. And then a second focus here is on growth, about business development and marketing efforts. So tell me a little bit more about that one.

Yeah, I think what's interesting about a strategic plan or what can be is not just what's in it, but what's not in it. And when you're talking about growth, we are, you know, explaining to our team how we want to grow organically, how we're thinking about M&A and inorganic growth, even if it's not a focal point. What would cause you to change your mind? Why isn't it a focal point? Where does the marketing team fit into this in terms of marketing initiatives to help with business development? So it's just re-emphasizing something that I've said a few times already— how we want to grow and maybe things we're not going to pursue at this moment for a variety of reasons.

And in terms of the organic growth, tell me a little bit more about that. What are you doing to generate the organic growth?

Sure. So one thing that is, I think, somewhat unique about Heritage is our lead advisors. So every client of Heritage works with a 2-person advisory team that's there for every single meeting. Obviously, they're working with other people at the firm, but that's who's leading the relationship. The lead advisor in that relationship. We don't have any service advisors at Heritage who are leading relationships. You need to be contributing to our organic growth push if you're in that seat. So that's one thing is building that expectation, letting people know as they're coming up the ranks, if you want to get into this role, you're going to have to pursue business development activities to contribute to what others have done to develop these opportunities for you. We want you to help keep the growth engine going so that people behind you can progress in their careers. So that's one thing. Two is we have a much more focused business development committee than we've had in the past. It's only people who have a business development goal. We're in there monthly. We're holding each other accountable. We're having an annual offsite. We're comparing best practices. We're learning from each other. And then from the stuff that is led by those advisors, it is, I would say, mostly referral based. From clients or centers of influence. Direct relationships has been growing as our team is getting older and more well-known in the community. And then marketing initiatives have started to, you know, build up the sources of client activity, new client activity as well.

So sounds like multiple prongs here. One is the lead advisors are responsible for business development. You also have senior people like you that are doing some firm-wide business development where you might bring it in and then you funnel it off to other—

Chuck's been doing that for years and he and I continue to do that.

Okay. And then got a growing marketing effort as well that's bringing in some leads at the firm level?

Correct. Okay. We're not doing M&A. We're not on any of the custodial referral platforms. Some of those things may change, but so far it's been, you know, driven by people in marketing.

Okay. And the marketing effort, are those employee marketing team members using third-party marketing organizations?

We have a phenomenal internal marketing team.

Okay. What are some examples of the kind of marketing that you're doing these days?

Yeah, so it's evolved a little bit. Like, everybody can answer the pre-COVID, post-COVID. Yeah, no, we definitely do small client events, educational, you know, paired with an entertainment component. We've been doing webinars, podcasts. We have a robust blog, one that goes to clients, one that goes to prospective clients. It's, you know, two different streams. We're pushing that out weekly. Our team has developed an ebook and some gated content. Things of that nature. And then also supporting a specific business development strategy that a wealth manager wants to pursue. So, you know, we have somebody who's doing Social Security webinars regularly, and that's a strong push for them. And the marketing team didn't come up with that idea, but they improved it, facilitated it, and are moving along in that direction. We have a women's initiative that is tied somewhat to career development, somewhat to working better with clients, but somewhat also with developing business in those areas, and the marketing team is involved in all of that.

Now, you have written a book.

Yes. Tell me about that. I wrote a book called Beyond the Basics: Maximizing, Allocating, and Protecting Your Capital. And the theory behind the book is, if you know the financial planning basics, right, beyond the basics, if you know not to rack up credit card debt, if you know eventually to max out your 401(k), but you don't want to sit around and try to figure out how to pick stocks on your own, What else can you do to build your wealth? And so, the framework of the book is building a capital base. So, things like making money, saving money on taxes, limiting spending, growing that capital base, investing, working with an advisor, doing it yourself, real estate, business ownership. And then third, protecting that capital along the way, which would be more like the traditional financial planning section, estate planning, insurance coverage, things of that nature.

And how are you promoting that book? How are you using it in your practice? Who does it go out to and how effective has it been in terms of visibility and potentially bringing in new clients?

Yeah. One thing the firm has done, which is they've been very supportive of the book initiative, is we do send a copy of that to every new prospective client. We have copies of it in the lobby, so periodically we have to replenish those. The ebook that we just launched from our marketing team was a slimmed-down version, not a complete replica of the book, but definitely helped create that. And it's tough to say pompous things like, well, increase my credibility or raise my profile. I have had my stronger new business development years since the book has come out. And where I think it has helped differentiate with some of the networking that I do compared to other advisors, frankly, it's helped people who are very good friends of mine or people that I know in town who I would never get into these things with. They've bought the book, they've talked to me about it. Now they know what I do. And then there's like the random one-off. I, you know, my, my mom was a bank teller in the '80s and she posted about the book on Facebook. And one of her colleagues, you know, 40 years ago bought the book, reached out to me and is now a client. So there's those random one-offs. But for the most part, it's less direct. It's intangible.

Did your mom give you a 5-star review?

She did. Yes. I think I— to be honest, I think I grabbed her phone since she doesn't know how to do the reviews. And I created my own 5-star review from her and I had her approve it. All right.

Yeah, we won't tell anybody other than the millions of people that are listening to this. Correct. All right. So another one of your focus areas here is to focus on clients about delivering top-tier wealth management services. Give me a little more detail there.

Yeah. So that is really the practice management page, right? How are we going to stay at the cutting edge of the wealth management industry and what do we consider that to be? Some firms have different investment approaches. We want to just be passive and get you what the market's going to get you. So we lay out that we are trying to earn competitive returns compared to a blend of global stocks and US bonds. We do want to have a differentiated investment approach and story. We're not just a beta shop. And then wrapping in the concepts we talked about, every detail matters, the wealth management, the financial planning, and what do we need to add over the years to that service offering to stay cutting edge and top tier?

Well, this I think will be an interesting question. Okay, so you say you want to remain cutting edge. So of course everyone is talking about technology, everyone's talking about how fast technology is changing, everyone's talking about how the future is going to be so different from the present. But you and I have both been in this business for multiple decades. Sure, both of us. Let's just go back 10 years, let's go back to 2013. Sure. And I think we can both remember 2013-ish think about what the industry was like in 2013, what people were saying it was going to be like. Oh, 10 years from now it's going to be this, it's going to be that. Well, here we are 10 years later in 2023. What can you point to and say, oh my goodness, look at how different things are today in this area compared to what it was in 2013? Do you think there is an area or two that has really changed and evolved dramatically in our industry over the past 10 years, whether it be through technology, or just the way we think about a process or how we deal with clients? Anything that you think has changed so dramatically over the past 10 years?

I think it may be a cop-out to take the easy way, but COVID, I think, changed a lot of things, and firms are navigating that still in terms of, you know, schedule flexibility, remote, hybrid, in-office. I'd mentioned we have an amazing marketing team. One of the silver linings of COVID is We hired people that I used to work with who live— we're based in Boston. They live in New York and South Carolina. We would never have even entertained something like that if we didn't do it during COVID when everybody was at home anyway. So I think the challenges of culture, career development, running a firm, interacting, but still allowing employees the flexibility that they feel they need coming out of COVID and our team was extremely productive during that stretch, probably more productive. So it's navigating that, and I think a lot of firms are going in different areas. And then connected to that is, you know, client service, Zoom, you know, not coming in every time there's a meeting. You're seeing some clients more often through Zoom than you would be if, you know, their schedule was a challenge. The spouse who's traveling who may not be able to join the meeting now Zooming in from the hotel. So I think the things that you had to do to stay relevant during COVID from a technology standpoint internally to be able to run your business and to connect with clients were accelerated, and I think they're here to stay.

Yeah, and I think that's actually a great point because all the technology that became super prominent during COVID have been around for a long time, and they were slowly seeping their way into the industry, but it wasn't until COVID where we were forced to change overnight the way we did business, that people said, okay, I'm going to do Zoom, or okay, you know, we're going to do all these different things that the technology allowed us to work from home, that sort of thing. So yeah, I think that's a great example.

We took our entire operation remote in a day, right? You know, could we have done it 10 years ago? I don't know. I asked you maybe for your thoughts on it, but we were forced to, right? And some of that adoption is here to stay, right?

Yeah. And I suppose like cloud computing, I mean, it was certainly here 10 years ago, but now it's like everything is in the cloud. And again, when COVID hit, because we had cloud computing and a lot of stuff was on the cloud, we could very easily work remotely and that would work. And the video, of course. So yeah, so I think that's a good example. Yeah, I appreciate you sharing that.

Sure.

We'll leave that in the recording.

All right.

Thank you. Let's get back here to the fourth focus area, which is operational excellence and efficiency.

Sure. Yeah. And that's the area that would encompass things like cybersecurity, resilient systems, good technology, internal client-facing technology, compliance, you know, the right amount of operational and client service staff and keeping up with the digital age in terms of processing paperwork and client transactions. That's where that kind of brainstorming falls.

Okay. So let's just talk strategically about the strategic planning process. So you've been doing this for a couple of years or so. Now, how helpful has it been from a leader standpoint in terms of getting the organization to really focus on the future a bit, to identify what the key initiatives are, to hold people accountable? Have you seen an improvement in the organization by however you want to measure that as a result of having a, a more sophisticated and prominent and important strategic planning process?

You know, I think the feedback from the team has been they appreciate the fact that this document exists. They appreciate the rollout of it, the small group meetings, the opportunity to influence future versions of it. Our shareholders get together for an offsite where we talk about the things late in the prior year that will influence next year's strategic initiatives that will make their way into this document. So I think that that has been a cultural benefit. I think it's also helped us focus on priorities and avoid mission creep, as I mentioned before. The accountability is really to me now that I've committed to this process. I've committed to— we have a staff meeting at the end of the month where we're going to have this year's initiatives and this year's version of that plan, and I need to tell them how we did on last year's initiatives. So I kind of created an accountability monster for myself to make sure that these things happen.

So how could Sammy get fired? We'll talk about accountability. Now, I'm not talking you do anything nefarious. Gotcha. But from a performance standpoint, what would you have to do where you didn't like hit the numbers or something didn't get executed? Is what would be fireable within your culture for you?

For me, you know, I don't know. I'll, I'll ask Chuck that next week. Yeah, I'm gonna ask him next week. I think what's extremely important for us is a good culture, employee retention, client retention, and growth and profitability so that we can keep this thing going. And I think if we were not successful in a multitude of those areas, that would be an issue. We would have to revisit who was running the firm, and next year you'd be talking to somebody else about this podcast episode. So those are, are the things— culture, growth, retention, profitability that I think about every day.

Okay. Well, and I'm confident you're not gonna get fired.

Well, I hope so too.

I think so. Based on what I know about you.

All right.

Thank you. Okay. Well, Sam, as we get ready to wrap up here, I know you also do a lot of book reading. Yep. So tell me a little bit about the books. I know you'd published some things related to the books that you're reading.

Tell me about that. Yeah. So one thing connected to the book that you asked me about is I did with the firm support, start a blog to keep some of that content going and attract new readers to either the book or the firm. And through that blog, I share a Wednesday reading list, which typically has a book recommendation and then another original article a week if I can. And in that, I also have a couple of pieces that I update regularly. One is a list of the best financial literacy, personal finance books. It's a running list that I update and connect reviews to. And the other, oddly enough, is a list of the best presidential biographies for each president that a colleague of mine, Michael Waldron, our director of portfolio management, and I wrote together. And years ago, independently of each other, we just each started reading a biography for each president. So we talk about the book that we chose, we compare notes, and then we declare a winner if we didn't read the same book. And We're also constantly updating that. So there is a new JFK biography. One of the presidents that we felt didn't have a good biography already was JFK. So we're reading that. We're going to, you know, incorporate it into the list if we can. So both of those, if I read a great personal finance book or a great biography, I'm updating those lists and they're easy to find on the blog.

So we all have an impression of a JFK, of a Ronald Reagan, of FDR. Lincoln. Sure. After reading all of these biographies, which president surprised you the most from what your original public perception of them was?

Yeah, Michael and I both agreed that Thomas Jefferson doesn't come across as, as great a guy as you would think. He was not loyal to anybody. Some of his ideas were a little out there. And so if you really get past all the things that he did as a founder and dive into his relationships and some of his behaviors and how he treated the presidents that he worked with, and not to mention, you know, all the other issues related to slavery, you kind of come across thinking, it's not a great guy. That one surprised us both. Okay. Yeah. And I can say that because I don't think anybody's going to get offended by an 1800 verdict on a president.

Is there anyone who surprised you on the positive side where maybe they weren't as positive publicly perceived, but after you're reading, like, I think this person's underappreciated.

Andrew Jackson is extremely interesting. So I guess if you want to read a biography and you're thinking where to start, the Andrew Jackson biography is— but I believe John Meacham— is extremely interesting. He's a very interesting person, a very interesting president, probably a better president than people realize, but also, you know, a lot of interesting things that you maybe wouldn't agree with. So, he came across as somebody that we were both pleasantly surprised to find relevant. And then, as a warning, there's a stretch of presidents in the 1800s before and after the Civil War that are just dull as watching paint dry. So, you got to be careful if you don't pick the long version of those guys.

Okay. And with the personal finance books, with the exception of yours, which we know is right up there at the top—

It's not on the list.

What would be one or two of the personal finance books that stick out in your mind?

You know, what I put into the list is, you know, learning about finance. There's a section of books in interesting places that you maybe wouldn't have thought of. You know, the book Moneyball, I think, is a great investment book, even though it may not necessarily be— And a great movie. And a great movie, even though it may not necessarily be portrayed as that. I think a book like Too Big to Fail, where you really just dive into the, you know, how the credit crisis unfolded and what was going on at these banks. Those to me are two that you maybe wouldn't consider as like, hey, personal finance 101. But then obviously, you know, Jeremy Siegel was here, Stocks for the Long Run, Jack Bogle's book, Common Sense for the Small Investor, you know, The Millionaire Next Door. Those are all ones that I think, you know, belong on anybody's initial reading list. You can't read enough about Warren Buffett or Charlie Munger. So it's a diverse list. I would recommend people check it out.

There's even novels on it.

Yeah.

Well, and what's interesting about what you just said there is like Moneyball and some of the others are, narrative stories. And it's not just facts or how-tos, which can be very dry and boring. They're wrapping stories around it that have really important financial messages.

Yeah. And if I could go the other direction, like to answer the question on the president, a topic that I don't find as interesting as I would've thought to read about repeatedly is behavioral finance. I think once you've read 1 or 2 books, you get the concept and the newer books or the other versions of the— they're not talking about anything new or unique. So, read one or two. They're important concepts, but I don't think you're going to make a career out of reading every behavioral finance book that's out there.

All right, Sammy. Well, as we wrap up here, what's the best way for folks to stay in touch with you, whether it's LinkedIn or your blog or website or—

Sure. Yeah. I would encourage people to go to our website, heritagefinancial.net. There's a lot of great content on there. I'm active on LinkedIn. My personal blog is thebostonadvisor.com. And if you go to any of those areas, you'll definitely find a lot of Heritage Financial-generated information that should be useful.

All right. Fantastic. Sammy, appreciate you being on the show.

Thank you very much, Steve.

All right. That's all for today. Make sure you like and share this podcast through your favorite social platforms. And for more great podcasts, visit us at barons.com/podcast. Take care and be safe.

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