Tony Parr and Jeff Price: Empowering Advisor Teams to Succeed

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Hello and welcome to Barron's The Way Forward. I'm Ray Scalfani, the founder and CEO at ClientWise. And today I'm joined by two special guests, Tony Parr, founding partner at Parr McKnight, and Jeff Price, managing director at Price Associates at Merrill Lynch. Today we'll be talking about empowering team success, strategies for crafting incentive structures that value and reward collaborative achievement,, and we're gonna dig right into it. So fellas, welcome to the podcast.

Thanks, Ray.

Great to be here. Right. It's great to be here.

Thanks for having us. Terrific. So let's get right into it. Tony, tell us a little bit about your background and your firm.

Yeah. My journey actually started 36 years ago. I was hired as a stockbroker at the premier Midwestern firm, a company called Piper Jaffray and Hopwood. I did everything my mother told me not to do, which is call strangers. And then I asked them for money. Uh, I became part of a team and it was a little bit dysfunctional, uh, very siloed team, no processes in common, no common investment strategy, no team meetings. And eventually I broke off with another advisor and we went to a different branch. We did leave and go to Prudential Securities where we started building an advisory practice. And I went off on my own for a little bit. My quality of life went downhill and I started employing interns, which blossomed into the organization that we have now. There was a stop at Wachovia Securities and then we were absorbed into Wells Fargo's private client group. And one of the cool things about Wells Fargo is they have a multichannel approach to our business. You can be in the private client group, you can be in a division called Finet where you have a little bit more independence, freedom, flexibility, and control. And actually, in a few months, we'll be turning into a full RIA within the Wells Fargo ecosystem. So that's a little bit about the journey. I've got 13 people on my team. There are 4 certified financial planners. We've got 2 paraplanners that will be full CFPs, hopefully when they pass their test the first week in November. And then 6 wonderful people on the support team that are in charge of loving clients up and getting stuff done for them.

Fantastic. It sounds like lots of clients and lots of assets and a growing team.

We've got about 100 clients per advisor, and I'm trying to navigate away directly from meeting with a lot of clients. It's more of a journey, another journey. But yeah, it's, it's working quite well. I love my work family.

Terrific. Jeff, let's get into it. Tell us a little bit about your practice.

Absolutely, right. And been in the industry for 35 years, a little bit of a different channel of coming in. Started when I was in college. Worked for a money management firm in Waco, Texas. I went to Baylor University and started out as a research analyst. They were an SMA, kind of a small firm managing a value portfolio. And wanted to get back to Dallas, so when I graduated, actually interviewed at Merrill Lynch. They sent me the thank you, but no thank you letter in the mail. And started working at ultimately what became JPMorgan Chase. It was called Bank One Securities at the time. And that gave me a great kind of intro into the business. I came over to Merrill Lynch, just started my 30th year as of April 12th. And during that time, been able to go from a sole practitioner, quite frankly, struggling to survive in those early days at Merrill, to today, a thriving team. There's 18 members on the team. We're highly, highly structured, very specific in our roles and responsibilities that we each have, everyone from myself all the way down to interns. Everyone has very specific roles and responsibilities that they're gonna follow. Also through that, and we'll get more into this later today, talking through even how we do compensation and how we develop people as well. But it is a practice that is built around financial planning at the core of how we engage and work with every relationship. Through our success and the favor we've had, we manage $2 billion in assets and we have about 400 relationships that we're working with make up that $2 billion in assets.

Terrific.

Let's talk about recruiting for just a moment. It seems like both of you are pretty eager to wanna grow your people, not only your profits, and grow your impact by expanding your team. Tell us a little bit about how you're finding talent and where it's coming from.

Well, Ray, I've got a pretty unique approach. The 4 business owners and partners of mine are all former interns. So Brian McKnight, became an intern 27 years ago. He's been my partner ever since. John Rudy was an intern 16 years ago and Nelson Moen was an intern 8 years ago. So we've got a pretty robust farm team. I hear of all these people that are growing and they're bringing in outside advisors. We're very careful and guarded about our culture. And all these people grew up in Tony's world.

So you've taken a long view and invested heavily.

You know, and it's beautiful because I'm 58, Brian's 38, John's— Brian's 48. John is 38 and Nelson's 28. And one of the big concerns in the business right now is succession. And I just feel like, you know, by God's grace, I just kind of stumbled into it, the perfect succession plan. We've got like a bond ladder of advisors and we've been doing little internal transactions, empowering them with equity in the firm. And it's just worked out great. So, you know, we've had to recruit other staff members, but in terms of the partners and advisors on the team, they've all come from the farm team.

Jeff, you've built a multi-generational business as well, and it's even a family business. How has that worked out for you?

Correct. And this is where Tony and I have some similarities in that when I think about the partners, there's myself, there's Trent Owens, and Trent, I call him my business son because he started out with me when he was an intern at SMU. And so he's grown up with me around the business. And then there's my biological son also who interned, who obviously grew up and spent his whole life has been Merrill. It's the only firm that he knows that his dad has been with. And so I have my biological son and then I have my business son that both started really young in their careers, very young within the business, and it enables me to really mentor them and into the culture. You know, it used to be that I would go out and I would try to find the unicorn. This is that I need a financial planner or I need a portfolio manager, and I would try to search for that and do a plug and play. And I found that, yes, you can have some success. However, you can actually have a greater success best guess, just as we heard Tony say, playing that long game of going and hiring someone that's young, seeing them for not who they are today, but who could they be 10 years from, 20 years from now as you were to develop them out. And so we are going to— our primary way of finding new individuals will be through internships or hiring directly out of college. Oftentimes, they're being referred to us by our interns. And so we Well, if we have a really good intern that we know we're going to hire and bring them on full-time once they graduate, we'll ask them, who else do you know that looks like you that could benefit from this culture that we've built that you've been a part of? Who else do you know? Would you be willing to make that introduction? And that's how we're finding a really good line of new individuals to come and join the team. Now, going back to To the question a little bit more in depth, the family venture has, has been great. You know, it's interesting. I say I've got a picture in my office. Connor is wearing a Merrill Lynch onesie and now he offices 4 doors down. And so life has moved quickly. And so it's been really neat to have, like I said, not only my biological son, but also my business son in the business and how their relationship and friendship continues to blossom as well.

That's actually really pretty cool. I can, I can see the visual right, right there.

I'm thinking about how I get my stepson Nelson, who's 28, in a Parmigiano-Reggiano onesie. I mean, you gotta stock the company store. That's good.

My wife wants to do a redo of that picture. I'm like, okay, good luck. Let me know when you find that adult Merrill Lynch onesie.

Yeah, that's right. Hey, so let's talk about career planning, 'cause it sounds like both you fellas are really focused on thinking about playing the long game, but investing in career. And it's been so true for so long in our industry where, advisors have had to wear all the hats, the rainmaker, the business developer, a new client generator, new revenue generator, but also the technical advisor and relationship manager and providing real quality advice and guidance. And that's a lot of hats to wear. We're seeing a trend at ClientWise where the best in the business seem to be bifurcating that in some way and helping people find more career tracks. I'm curious what your take is on that, Jeff.

Sure. I think number one, and this is something you and I spoke about years ago, if you're going to be a CEO and really move from being a financial advisor to being the CEO, and I think that's what I'm finding your most successful advisors, be it in the RIA channel, be it in the traditional wirehouse channel, those that truly can move from being financial advisor to truly being a CEO. Financial advisor, that's the widget. CEO, that's really my position. What a CEO has the ability to do is not just necessarily manage for today. They have the ability to step back to see the bigger picture. And then in turn, they have the ability to say, I see this person again for who they are today, but more importantly, what would it look like if I develop them out over time? Early on in my career, one of the biggest mistakes I made, and it was just immaturity in my leadership style, is if I'm really honest, I saw people as pawns in my chess match, be it if it was my clients, they were helping me reach my financial goals, or if it was even my staff. And that's a horrible thing to say, but that's the reality of a lot of poor, broken leaders is they see individuals as pawns in their chess match. One of the biggest changes and shifts that's happened in my leadership style over the last 20 years is moving from how can I help someone help someone reach the level in which they want to go to. In other words, when I think about my legacy, my legacy as it relates to my staff is who did I help them become? Not that I said, hey, you need to be a planner or you need to be a relationship manager or portfolio manager, but how about I just have a conversation and ask them, what do you want to be someday as it relates to this industry? And then let me help you reach that. No matter if they finish their career or they finish their career somewhere else. To me, that's the definition of success is I've helped someone obtain their career objective that they have. To me, that's really rewarding. And that kind of shift of it all being about me and a shift to it being about them, it's very powerful, not only with your staff, but obviously with your clients as well.

You know, Jeff, Jack Welch had a great quote. He said, the sign of a great leader A great leader is somebody who can develop somebody who can develop somebody. And it sounds like what's happening in your firm is not only are you helping others achieve what it is they want to achieve, but you're also helping them develop the skills so that they can carry on beyond you and them. And that's really admirable. Congratulations to you.

That's big stuff.

Thank you. Tony, what does career planning look like? I know you guys are very disciplined and you've got a pretty amazing roadmap, especially with people in their 20s and 30s and 40s 50s. So tell us a little bit about what track looks like at your firm.

Yeah, and Ray, I was actually getting a little fatigued when you mentioned all the hats that we have to wear, and I had a flashback to when I sat at a desk with a phone. I had my Dun Bradstreet cards that were in a recipe box. I had my script, and I came in, and that's all I had to do.

And now it's— by the way, people listening to this podcast are now twitching because the old-timers are remembering exactly what you just described. There are others who are listening going, what is this guy talking about?

Yeah, it was a luxury if you had your own courtroom. Part of it was it was on a lazy Susan. You shared it with somebody. You had to wrestle your neighbor for it. But, you know, and it's interesting, the career path development as well. When I first got started, hired Brian as an intern, then hired him full-time, it was, "Trust me, we'll get there." And, you know, with the young people today, that's not good enough. They want to see what they need to do to progress along their career path. And they're also interested financially in what they have to do to acquire more responsibility.

So you just said something that has resonated big time. That I've heard throughout the industry among high performers and their Next Gen, and that is there's something very different between something that's implicit and something that's explicit. And those implicit promises just don't seem to fly for the Next Gen.

Is that true for you too, Jeff? Absolutely. One of the quotes I always say when I'm coaching around leadership, the greatest gift you can give the people that you're leading is clear, concise communication. And I feel that more today than any other time when you think about the next generation that's coming into our business. Maybe another way to think about it around coaching and teaching and developing your staff, it used to be maybe early on when we all came into the business in the kind of late '80s, early '90s, we would be given the color wheel and we would then be given a little bit of instruction and then we could go paint a masterpiece. We could go figure that out. Today, I believe we're seeing a movement more towards paint-by-numbers, where we have to be very specific and guide and develop and train at a much deeper level than maybe the leadership of the past. Now, here's the cool thing. The reality of the leadership of the past, though there was some good, the washout in our industry was horrific. It wasn't financially sustainable. To me, if we can be more direct, more specific in the paint-by-numbers, I believe that it'll improve not only satisfaction, but I think it'll improve the success of the development of people as well.

Very interesting. We're gonna come back to that. Fairness and transparency. Tony, it sounds like you guys are ridiculously clear about what the path is.

Tell us more about that. It's open kimono with me, and my wife actually criticized me for sharing too much. But yeah, everything's on the table. We, and with your help, Ray, we've developed career paths for advisors moving everywhere from a financial services intern to strategic leadership advisor that actually has some opportunity to own equity in the firm. And we've listed out all the technical skills, all the social skills, all the investment skills that you need to acquire in your journey. So our young advisors can see exactly the skills that they need to develop to move along in their career path. And I also think, Ray, that some of this is up to them too, right? I'm looking over at Jeff and it's like, who did this for us when we were 25, 30 years old? I'm a firm believer that you give 40 hours to the company and you spend 10 hours a week developing your own skills. I ran around with a Sony Walkman clipped to my belt listening to Stoker the Broker and Bob Dunwoody and the Cold Call Cowboy and just, you know, I fed myself and I expect some of that, but that's not the only thing that I have to expect. I've got to have a plan for my people to visualize their future as a success with Parmacnet.

Right, that's great. Well, hopefully your next gen is listening to the Barron's Advisor, The Way Forward, because this is a great resource for those next gen as well as controlling owners and founders. Jeff, let's get back to this paint-by-numbers idea. One of the things that I've admired in your business is how specific you are with your team and your leaders are with team members about role, compensation structure, and more teams would benefit hearing from you about that.

So describe, if you would. So let's, let's talk about it in a couple of different ways. Number one, as I mentioned earlier, the greatest gift a leader can give is clear, concise communication. So one of the things that we hand out every single year, it's at the beginning of the year, is every single member of the team receives their compensation plan in writing. They've signed off on it, we've signed off on it, they understand it. The reason we do this conversation once a year is that in a warehouse space, your compensation is also adjusted once per year. And that typically happens somewhere in the fall, call it October to November, maybe December. But that's ultimately where what I call the revenue to the company, the revenue to my company, that's really established in that warehouse compensation plan. I needed some time to process through what does that look like? How is the industry changing? How is the firm changing? And then ultimately from there, make adjustments changes to our compensation plan. So let me talk a little bit about our compensation plan and a little bit more, give you a little bit more strategic, more specifics around how we see compensation. So let's first understand the different roles on the team. As I said earlier, you have 3 FAs. These are what I call the equity partners. They're the equity owners of the business. Then underneath that, we have our administration staff, what we call within Merrill Lynch, CAs, client associates. This admin staff, they're gonna have a base salary. They're going to have a quarterly growth bonus pool. I want everyone to be focused on one thing, and that is growth. As a side note, one of the things I've seen historically within in a lot of firms, ours included, is a lot of advisors have built their compensation around paying every member of the team 1% of PCs or 2% of PCs, production credits, maybe it's revenue in the world you live in. And that works when it's you and one admin staff. But as you grow, that math no longer works. And so we kind of blew up that what I call 1980s way of thinking, antiquated way of thinking around compensation. And that's where we created this growth quarterly growth bonus pool. Now with that, that means every single member of the team, including myself, has a scorecard, and that scorecard is based upon every member's specific roles and responsibilities. And so how that individual scores for that quarter determines what percentage of that growth pool of money that they receive. Now one of the things that's important around these scorecards is we have them score themselves, and then we score them as I want to have dialogue every quarter around how they see themselves performing to their specific roles and responsibilities versus how we see them as well because here's the reality of life. Life is messy and people are messy, including financial advisors. What happens is it's very difficult, if not impossible, to leave those human life messes in the car. They oftentimes get brought into the office. This is where that emotional intelligence really begins begins to come in is what is causing this individual to underperform for the quarter? Are there stresses that they just haven't flushed out? Let's use this quarterly conversation to figure it out. If we need to put an improvement plan in place, is there just something they need us to have a little bit more grace towards them because they've got some life issues? Let's talk about those things. We're gonna be a family on mission, and this is where a lot of that comes out in those conversations. So going back to the, again, administrative, there's a base pay, there's a quarterly bonus, bonus structure. We also want to make sure that we give an administrative assistant an incentive to refer us business. They're in the community, they're actively involved. If they bump into something, an opportunity, we want them to be comfortable and confident to talk about the team, to have pride in the team. And so we reward when they actually make a referral, and then we give them additional compensation when that business is closed as well. We also want to give them an incentive to cross-sell. As they're servicing a relationship, they hear of a 401(k) rollover opportunity, they hear about a mortgage opportunity, some type of lending opportunity, banking opportunity, we want to give additional compensation for cross-selling. And then based upon their total score, going back to those scorecards, at the end of the year, we do a discretionary year-end bonus. And then finally, we have what is called a team profit sharing plan. And this team profit sharing plan is based upon if we have 15% or more year-over-year growth, we're gonna pay 1%. So we're gonna take the production or the revenue, we're gonna pay, have put 1% in a pool. And again, based upon the formula we use, the amount of time they've been on the team, their personal scores for the year, determine how much they receive. So 15% is going to be year-over-year growth will be 1% into the pool. 20% will be 2% into the pool. We want everyone again to be on mission around growth. So growing of new relationships, but also growing of year-over-year revenue or production. So we've talked about FAs, we've talked about admin staff. Now let's talk about what I call our professional roles. Another term we use within the firm is called EGP, which stands for Elite Growth Practice. That actually started with myself and another FA working with senior leadership. And the original, before marketing got a hold of it, it was called Team of the Future. And what we were trying to look at is looking at where the industry is changing and how do we need to build out our teams. And so we created these EGP roles, financial planners, relationship managers, CEOs, business managers, portfolio managers, and the kind of list goes from there. So there again, they're going to have all these professional roles. They're going to have outside designations. There's going to be a base salary. They're also going to participate in that quarterly growth bonus pool that I mentioned. Now here, what's different is they are more engaged. These, these individuals are paid well. They're very engaged in their communities. What we're doing here is we're actually going to pay them not to refer business, but when we close business, I want to give them a little bit of taste what it's like to be an equity partner, a true owner in the business. And so we're compensating them upfront what it would be like to be an FA when that business is closed. That's really where they can get unlimited compensation. And so we pay that out as well. We call upfront net new annuitized bonus. They also get a year-end performance bonus based upon their scorecard. Card. They get a discretionary year-end bonus, and then again, they participate in the profit-sharing plan. And then the final group, this is my leadership team, and this is what I call our phantom partners. So within our structure of the organization of such as Merrill, we have some, some what I call kind of structural ways of doing business. And so I can't necessarily give them equity ownership into my practice. So what we've created are what are called phantom partners. This is going to be my lead CA, like they're leading a group of people. That's one of the main things here is they're leading a group of people. My lead portfolio manager, he's overseeing the portfolio management team. My lead financial planner, who's also my lead relationship manager, my COO, head of HR, that's my leadership team. And so they receive all of those compensation pieces along with what we have is a leadership profit sharing plan as well. I want them to also participate participate in the total profits of the business. So those are the components. That's a very, very specific breakdown of how we run our compensation. And I got to tell you, Ray, one of the things that really helped me— you challenged me, I want to say it was about a year ago, around how much we were spending. And we were— I felt like, you know, warehouse-wise, we were spending well. And you challenged me and encouraged me and asked the question, are you spending enough? And then you kind of talked about some of the statistics that are out there around even spending more. And And so that's really helped me formulate a lot of these ideas around these profit-sharing plans of a way to give additional incentive, but tying it back into activity and then success of the entire business.

That's great. So that's fairly comprehensive. And so thank you for that. What you're referencing is the conversation around what the industry calls the 40-30-30 rule. This has been around for as long as ClientWise has been around that I can recall. Paul, which is 18 years now. I know Mark Tabershin back in the day was at Moss Adams and was teaching others about sort of industry benchmarks and financial management. And it's a very simple formula, but it's a good guide. It has served the independent RIA channel for a long time. That is 40% of gross revenues is professional staff. I'm not a big fan of the word staff, I don't call it that personally, but that's what the industry calls it. That is anybody who's front stage advising a client, who's sitting in the room as either a first chair or second chair, who's advice giving. We are in the professional advice business, great. Who's providing that advice and guidance? That's professional staff. 30% of gross revenues is operating expenses, and that includes support professionals in an admin capacity or a support capacity who maybe aren't providing the same kind of advice. And that leaves 30% operating costs, profit. So marketing, rent, E&O insurance, licensing, training, developing, all of that is an operating expense along with support. And then the operating profit at 30% is really a great industry benchmark, and a multiple of that EBITDA in the independent RIA channel is really value-affirming, and quality of earnings comes along with all of that. So there's a lot in there, but, but Jeff, it's really terrific to to see you're using industry benchmarks even in the independent RIA channels, uh, how to sort of feather into the wirehouse structure a way that really works for you. So thanks for sharing that. You know, base and bonus is one thing. Let's talk a little bit— I know Par McKnight, Tony, you have done just an amazing job building an environment, an inclusive culture, a supportive culture, a culture that recognizes, uh, and rewards high performance, but so oftentimes advisors don't do the long-term incentive plans or the non-monetary benefits. Lots of folks do benefits, but tell us a little bit about sort of the other parts of working at Parmcgnight and why teams are empowered to want to collaborate more so and be together more so in the culture that has been built and crafted by your firm.

Yeah, thanks, Ray. That's a great question. And I think the first thing I'm going to do when I go home is call Jeff and have him be my compensation consultant. I feel like we've done a good job with the benefits, but we got a ways to go with our compensation structure. A couple things that we did when we went, when we left the private client group at Wells Fargo, we walked out of a big branch. I think there were 50 advisors, regional managers, presidents, branch managers. We built our own workspace and I didn't want it to be Goldman Sachs opulent, but I wanted it to be elegant and fun. So it's kind of where investment firm or financial planning firm meets Google. So we've got a nice employee area. Everybody's got a private office. Office. We offer— the private offices have glass windows, so all the natural light comes in. It's just a cool place to hang out. We live in Minnesota, and year after year, our favorite benefit when we poll our employees is heated underground parking. And maybe that doesn't matter in the summer, but for those days in January when it's 20 below zero, it's nice to get in a warm car at the end of the day. We do a couple of other pretty cool things. We match charitable contributions up to $500 for our employees. So if they want to give to a homeless shelter or the arts or to a hospital or support for cancer research, what's important to them is important to us. Every month we also put as a firm money in our donor advised fund, and the 13 of us get together and talk about the critical issues of the day and what organizations might need capital, and that's a good way that our team comes together. We offer free unlimited book purchases from Amazon. We also give everybody an Audible subscription. I'm a bit of a reading and listening junkie. So we're trying to aid and assist people's career and personal and professional development with that. We have 13 people on the team, and there are 16 dogs that are a part of our work family.

Yeah, a lot of furry animals.

A lot of furry animals. And I was reading an article in Fast Company magazine, and there was a small tech startup that offered a subsidy for pet insurance. So I went to my partners and I said, got a lot of dogs here. Let's offer pet insurance. And that's gone over big. The other interesting thing we do, people value monetary compensation compensation, but they also value culture and collaboration and camaraderie. So we eat lunch all the time together. And we're in downtown Minneapolis, which has had a hard time recovering from COVID So I think single-handedly, we keep Chipotle and Jimmy John's in business. So I was walking through our break room the other day, and I saw Mindy and Emily and Patty sitting down talking, having a salad. And, you know, there's culture being created there. There's friendship being created there. And I think they were talking about business half the time. So lunch for our people is not a cost, it's an investment. What else do we do? We also have sport tickets. We bought season tickets to the Timberwolves and share those with the team. And that's a benefit that just increased in value in a huge way this year. So, Ray, those are a couple of fun things that we do to make Parmic Knight a cool place to work.

You know, Tony, it's interesting. So many advisors overlook all of that great benefit and all the investment. I bet there are listeners listeners to this podcast that are spending lots of money on all kinds of benefits that team members may not be aware of and taking advantage of, right?

I call it giving anonymously. And one of the things that's important, we give at the end of every year as a playback of all of the benefits and what the cost was and how it's benefiting them, not only the cash pieces, but all of the various pieces that are being shared with the entire team. Moving from giving anonymously to giving them a playback every single year, what the total compensation—

Yeah, we do the same thing, Jeff. It's a total compensation statement. We list everything on there and they see the actual cost of having an employee, including FICA taxes. Everything's on there. You know, they see their net paycheck after 401(k), but really there's a lot more benefit than just the cash compensation.

Well, fellas, I gotta take a page out of your book because I'm the guy walking around our office talking about the gym membership that nobody takes advantage of, but we're paying for in the building. Yeah. And it's another subscription they're paying for. And it's costing them money, and yet it's free at the office, and it's a brand new gym, thanks to Caterpillar and what they've done in the offices. So it's an interesting, I'm gonna follow up on that year-end thing. Hey, we're bumping up on time, so I'd like to really check in as we're talking about empowering team members and culture. I'm really interested in learning more about the overall wellbeing and what some like to call the work-life balance, balance. I don't think there's such a thing as a work-life balance, God forbid. I think it's more of a blend. But I'm curious, in today's environment where there's such an attention around mental health, we are seeing an extraordinary increase in the level of depression among young 18 to 24-year-olds, but also those over 50, and suicide rates on the And it's a pretty heady topic, but I'd really be interested to learn from you guys, what are you doing to support that overall wellbeing of your team members, especially considering the nature of the great demands? You know, there's that old saying, you know, when the oxygen mask comes down, you gotta put it on yourself first before assisting others. And you guys are in pretty serious businesses helping others navigate life and financial security. What do you do to care for your team?

For your people? So let me start with that one, and that's one that's near and dear to my heart. And I jokingly said to someone within the firm the other day that I'm maybe having my Jerry Maguire moment a little bit, but I really have been wrestling through a term around restful movement. And to take that a little bit further, let me ask you a question, and this is a question I think you need to ask everyone on your staff, is have you lost lost their joy. Call it COVID, call it whatever you want to call it. I do believe a lot of people in our country, not only within our industry, they've lost their joy. And so, what can I do as a leader to make sure that that joy is there? And so, a couple things that we've done and I felt convicted on, and we're not there just yet, but I feel convicted that no one can work more than 45 hours a week. You can maybe do that in your, in your 20s and your 30s, but just turned 54, and it's not sustainable. It's not sustainable at all. There's a great book called Rest out there that I'm going through at the moment, and the author talks about seeing your life like the, the dashboard and the warning lights that are going off. And I would submit to you, the lack of joy in what you're doing, that's probably one of those warning lights. But what happens is we We just have these natural scales on our eyes that we just can't see. So who do you have in your life that's helping you see those warning lights? Mine's my wife. And my wife and I, we're empty nesters. We're about to have our first grandchild. And last year, we're sitting at dinner at home. We always have dinner together. And she said to me, she said, "You're physically in the room, but your mind is a million miles away." Matter of fact, I was sitting there murmuring. Murmuring, talking to myself about the things I had to do the next day. And that was like something of helping me see, hey, there's this warning light. I'm physically present, but I'm emotionally not. And so what it's causing me to realize is that I think about the health of my team, and I think about— we all hear about a term called sustainable growth, moving from sustainable growth, which we all have to have that in our business, but we have to move from sustainable growth to thinking about sustainability of people. So absolutely right, it It's not a balance, it's a blend. But how is we as CEOs of running these great practices, of running these businesses, how can we be more intentional? I think first, we have to recognize that there's a problem. Then second, saying, hey, no one works more than 45 hours a week. Okay, well, how do we get there? That's a great statement, but now I got to put my money where my mouth is. I've got to hire, I got to develop, I got to get ramped up in order for me to make sure that I have sustainability of people, because what's going to happen is eventually it will break. We will hit a plateau and then ultimately people break and then the team breaks and we won't be able to reach the long-term vision that we have for the business because I haven't built the business to be sustainable because I didn't build my people to have sustainability and I gotta work on that and fix that.

That's great, really great awareness and thanks for sharing so candidly. Tony, what's that look like at your firm in terms of this blend, this way of thinking about caring for others?

Yeah. I think part of what we've done a good job at is we've always had extra bandwidth on the team to grow into. I may not behave like it, but we've got extra capacity. So nobody's running around with hair on fire. We don't expect people to work, you know, before 7 o'clock in the morning or after 4 o'clock in the afternoon. We've got summer hours that we promote on Friday. Half the staff leaves at noon on Friday one week and the other half the staff leaves at noon on Friday another week. One of the benefits I forgot to mention was a subsidy for travel. We offer people a $500 credit just to show that we value their downtime. We've got work from home by request. If you've got a good reason to work from home, just let us know and we'll likely approve that. Outside of that, we like to have people in the office. You know, and I hear what you're saying about losing your joy, and I was feeling that a little bit myself a while a while ago, and our whole move to RIA and the excitement of independence and a new tech stack, I think has the entire team reinvigorated. And Jeff, I read the same book and the conclusion I had was rest is not the enemy of productivity. Rest is the friend of productivity. Exactly. And I'll speak to our schedule. The advisors on the team, we have 3 weeks of a month in the office where we're meeting with clients and we meet with clients Tuesday through Thursday between the hours of 9:00 AM and 3:00 PM. 10:00 AM, so we rarely have the evening meetings unless it's an institutional account that meets in the evening. And then the last week of the month we call strategic week. And in our business, it's really hard to toggle from doing 4 client meetings a day or 3 client meetings a day and dealing with a staff issue and dealing with administrative issues and then work on those projects for the long term, like your compensation program or like your procedures manual or like your benefits package. So we segregate time for that every month so we don't have the franticness of pivoting from client stuff to other stuff. And the other thing that I've done is I've taken a 30-day sabbatical every year, just an entire month off the grid, no email. My team is very respectful. They don't call me, they don't text me. It's just my rewind time. And I'd like to expand that strategic week and sabbatical to the rest of the employees over time.

So, Ray, that's a little bit about what we do. That's terrific. So today's been all about empowering team success. And these strategies you gentlemen have so generously shared around crafting incentive of structures that value and reward people and collaborative achievement have been just fantastic. So gentlemen, thanks for joining today. Our guests have been Tony Parr, founding partner at Parr McKnight, and Jeff Price, managing director at Price Associates at Merrill Lynch. For more podcasts and the latest wealth management news, head to barons.com/advisor.

For The Way Forward, I'm Ray Dalio. Sclafani. This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow.

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