Hannah: Well. Thanks for joining us today, Katie.
Katie: Yeah, I’m glad to be here. Thanks for inviting me, Hannah.
Hannah: So, I am so interested in your story. There’s a couple of really unique factors within your career path and especially at the end, talking about the ownership of how you are a part owner of your firm now and the unique structure that they have, but we’re going to be diving into that later in this episode. I want to start out, I know that you graduated from the University of Georgia with a degree in financial planning. Did you know that that is something that you always wanted to do or did you discover that at school?
Katie: That’s a great question. No, I did not go into college thinking that I was going to come out as a financial planner. I’ve always had an interest in money and helping people, but I don’t even think I realized there was a career path to put those together. I actually entered college as a international affairs major. I had lofty dreams of living overseas and just doing some very cool things that way.
Katie: And I quickly realized that while those topics are interesting to me, it just wasn’t what I wanted to do with my life. And I was back when you had a physical class catalog, if you will, and so I just remember flipping through that thinking, “Okay, I’ve realized that what I thought all along was going to be my life is not actually going to be. What do I do now?”
Katie: And I came across, at University of Georgia, it’s called family financial planning. And it’s in the family and consumer sciences program. And so I came across that and scheduled an appointment with an advisor and figured, “Hey, while I’m still trying to figure this out, I’ll take an intro class and if I don’t like it, at least I’ve walked away with some good life skills.” And obviously, history speaks for itself at this point. I fell in love with the program and with the work that was happening and here I am 10 plus years later.
Hannah: So, you get that family financial planning and then you go and you start working at, was it Ayco?
Katie: Yes, I worked at Ayco in Atlanta.
Hannah: Did your expectations match what you thought the job in financial planning was going to be with what you actually saw?
Katie: Yeah, I think that’s a great question too. So, a little bit about Ayco itself for anyone who’s not familiar. Ayco is a subsidiary of Goldman Sachs. So it’s quite a large company, but their niche is a serving Fortune 500 executives and other top management within pretty high level companies. So it was an employee benefit offered to those executives, top management individuals. And so we came in and basically we were their financial advisors so that could focus on their companies and their careers. So, it was a very good training ground for me. I cherish my experience there. I think that that really sharpened my technical skills. I was only there about three years because life took us in a different direction, but it was a great place for me to start.
Katie: Getting back to your question of expectations coming out of school. Honestly, so I came out of school in December of 2009 and at that point I just counted myself lucky to have a job, one, and two, very lucky to have a really good job for me. Meaning that I didn’t have client development responsibilities, I didn’t have that, I’m going to call it, sales side of the business just yet.
Katie: And so for me it was a really great fit in terms of expectations meeting where I was at simply because I made sure that that job fit what I needed at the time. And I’ve evolved since then. I’ve gotten more comfortable in my own skin where I do have those responsibilities, but for me that was a great place to start.
Hannah: And so you said that life took you in a different direction. Why did you move on from that job into your next role?
Katie: I married my husband while I was working at Ayco. He is a professor in financial planning and so when we got married, he was finishing his PhD at the University of Georgia and so we always knew that Atlanta was not going to be our stopping point just because in academia you have to go where the job is. And so we knew we’d be leaving eventually. So that’s what took us here to Manhattan, Kansas. He’s now at Case State as their program director in personal financial planning.
Hannah: We talk a lot about career paths on this podcast and we, I think often, I hope we don’t give this message, but I think often it’s assumed that you have just very linear career path. But so often life takes you in a different direction, like a spouse’s job, like you’re saying, or having kids or whatever that may be. It’s not just linear.
Katie: For me, when I moved here, it was challenging. I went from Atlanta being a big city with lots of different opportunities in this industry to moving to Manhattan, Kansas, which is what a lot of us would consider a fairly small town. I think a lot of people would even say we’re still fairly rural. And so the job opportunities here are just very limited for me in this industry, particularly wanting for myself to stay fee only and just some things that I, from a philosophical perspective, value about the financial planning process.
Katie: It really limited my opportunities. And so I had to be a little bit more open to looking at things that I hadn’t considered before. And that’s what I think brought me to the trust company. I’d never really even considered a trust company as a type of firm that would deliver financial planning services. And traditionally they’ve not been. But I think a lot of them are moving that direction. And so that’s what I was brought in to do originally. I started as our director of financial planning to really standardize and enhance the planning process that our clients were going through. And my job’s evolved since then, but it was a great opportunity and one that I had to be a little bit more open minded to find and be successful at.
Hannah: For those people listening who don’t know what a trust company is, can you talk about what a trust company is and how that differs from just a normal financial planning firm?
Katie: Absolutely. So we’re an independent trust company, meaning that we’re not owned by a bank. A lot of times you’ll have trust departments within banks. We happen to be independent. But really what it means is that we’re, one, regulated a little bit differently. We’re regulated by our state banking commission. But what it allows us to do is have fiduciary powers, meaning that we can serve as a corporate trustee, executor, conservator, durable power of attorney, those types of roles we can serve in a corporate capacity, not individually, but in a corporate capacity for our clients. So they’re actually writing in the trust company in those documents.
Hannah: And so you get to be a lot more hands on in that sense with your clients.
Katie: We do, we’re a lot more, I would say, hands on as well as multigenerational. We work not only with grandparents and parents and ultimately the kids, but it’s throughout those lifetimes. A lot of times, obviously if funds are held in trust, there may be some circumstances where someone is struggling, it may be drug or alcohol abuse, it may just be that they’ve not gotten their life together, those types of things, and so we really are part life coach in some of those situations and part financial advisor. And again, I don’t think the role is necessarily unsimilar to what a lot of financial advisors are doing with their clients, our just happens to be a more structured role.
Hannah: So, I know that the trust company, they do trust work but they have a lot of other clients that are just more the traditional wealth management clients, and I’m always curious with people who’ve had time at different firms, how did you see that service to clients? How is it similar and how is it different in that financial planning process?
Katie: At Ayco, they had had years and years to develop that planning process. And so it was fairly robust. It was obviously somewhat of a different clientele. There were just different things that we needed to be involved in. You had a lot more executive compensation plans, deferred comp as stock options, things like that that we were focused on. So I would just say in that sense, the process and the areas of planning were more robust.
Katie: Whereas at the trust company, I would say just within the last 10 years, have they really started to focus on what I’m going to call a proactive planning approach rather than a reactive planning approach. And so I would say we’re still in that development stage. And so our process, we’re evolving and we’re getting there, but it tends to be more investment centric. But we’re working to make sure that we have all the areas of financial planning included in our planning services and our focus with our clients.
Hannah: I really liked that of, as people take on jobs, of realizing that it’s not all going to be figured out and you can really help be part of that solution to helping all these firms across the country really figuring out more of what it looks like to do financial planning well.
Katie: Absolutely. I think it’s great. I came into an established business, so the trust company’s been around since 1992 and I started there in 2012. So, I came into a very established business, but this piece of the business was not established. And so I’ve really gotten to create my own business within a business, if that makes sense. And so really have gotten to take ownership of our financial planning services. And so it’s been the best of both worlds for me. I’ve gotten to do my own thing, but have all the support and resources of an established business.
Hannah: So, it’s so interesting hearing you say that because I talked to a lot of new planners who would love that opportunity, especially to help create something within that established business without feeling all the pressures of starting a new business and all of those things. And one of the phrases that’s been thrown around, and I’m not sure if it quite fits here, is this idea of managing up and managing around. And so I’m curious, was that an easy process coming and building out this new program or did you have unique skill sets that really helped you in that process of navigating how to work within a larger company?
Katie: We certainly had our hiccup. I won’t say it’s always been easy. Just human nature is to, I think, not like change and we introducing change. I think that the big thing for us that has made it successful is that the company, the management of the company, recognized that there was a need for it. And so while it may have not always been the easiest transition, everyone knew the goal that we were working towards of offering a more robust service to our clients.
Katie: And I would say obviously management support, but also we have a board of directors, they’ve been very supportive in the process as well. And so just having that from the top, that level of support, I think has trickled down to make it easier. But then you get into the nitty gritty and you may be asking people to do different things or do things out of their comfort zone or bring you into a relationship that they’re very protective of. And that’s just where I think it comes to building rapport and building trust with your colleagues.
Hannah: So, you’ve been at the trust company for eight years. When you started to now, how big was the trust company both in size of assets and employees to now? Have you seen growth in the company?
Katie: We’ve seen tremendous growth in the company. I believe when I started, I’d have to go back and look at the numbers, but just off the top of my head, we were still, I’m going to say, 21, 22 employees. I think I may have been employee number 21. Today we’re about 32 or 33 employees. When I started, we had just opened our first branch office in Columbia, Missouri. Now we also have branches in Lawrence, Kansas, and Marysville, Kansas. And when I started in terms of assets under management, we were somewhere around I think 400 million, and today we’re about 1.2 billion. So, tremendous growth, not just in terms of people, but assets as well as physical locations.
Hannah: From your perspective as an employee, what are the changes that you saw in the company as it’s almost doubled, tripled in size?
Katie: Yeah, absolutely. I think one of the challenges, we use the word growing pains around the office a lot because certainly there are issues that come up as you grow, but they’re not necessarily bad. They’re just part of it. I would say for me, one of the ones that we’ve perhaps struggled with the most or has been the most pronounced for us is, when we first starting and we were very small everyone had a seat at the table for everything.
Katie: And we’ve just gotten to a size now where that’s just not practical. We can’t get 30 something opinions on everything before we move forward. Whereas when it started, almost 30 years ago with just a couple of employees, obviously that was very easy to do. And so we’ve had to, not in a bad way, I think still in a positive way to make sure that we’re making progress, implement different teams and different committees and I guess different layers of decision making just so that we can continue to be nimble and move forward and make progress.
Hannah: So it was funny because even before you said seat at the table, it’s what I had just written down of asking you, wondering do you feel like you have a voice or a seat at the table in this company? And so if I’m hearing you, you’re saying that you still have a seat at the table, it’s just not for all aspects of the business, if you would.
Katie: Absolutely. I still definitely feel like I have a seat at the table. So, I mentioned different committees and different teams. One of the committees that we have is an executive management committee or exec team as we call it. And so that is a team that I am on, I’m representing our planning department on that, that team.
Katie: And so I do feel like I most certainly have a seat at the table. We still to this day have all staff meetings once a week. So every Monday morning all of our staffs sits down together, both Manhattan office as well as our branch offices are virtual with us. So that is again, an opportunity for everyone to quite literally have a seat at the table. And again, it may not be decisions that are being made in that meeting. It may be conveying information or giving updates for other things that have gone on, but at least everyone feels like they have input and that they’re part of the conversation.
Hannah: And so when you started, how big was the planning department?
Katie: Just me. It was me. I started.
Hannah: And now how big is the planning department?
Katie: You know, we’re in transition right now. Currently I have two planners working with me. I have an assistant who works with me as well as a planning intern. We’re in the process of onboarding a new financial planner. He will be starting with us this summer. And then we’re still looking potentially to add another planner, most likely officed out of one of our branch offices. So, either Lawrence or Columbia potentially. So we’re a little bit in flux right now, but roughly four to five people on the team at any given time.
Hannah: So, I’m so interested in this idea of … Everything about this podcast is geared towards new financial planners and you start in a firm and often within a couple of years, you’re now finding yourself managing people. And so I’m curious what that transition was like for you from being just like, “I just do financial planning work.” To now I do financial planning work and now I’m managing a team.
Katie: For me, I didn’t necessarily think through it as it was happening. It just happened to me. I feel lucky enough to have a wonderful team in place, but managing people is very different than doing the work. So for me the biggest struggle has been to let go of the work and let them do it. And so that control piece, I think a lot of planners we share the personality trait of being a little type A and we like control. And I think I’ve in the past been very guilty of … It’s just easier or more efficient for me to just do it myself. And I have to recognize that I have to give things away. I have to push them off my plate. One, so that I have capacity to do other things. But then also two, for them to have a chance to learn.
Katie: So I would say, I’ve been managing people for about four or five years now and my management style has changed. I’ve gotten to a point where I’m very much … I’m not going to be a micromanager. I’m putting you in the situation, but I’m going to be there to support you. I’m not a sink or swim, but I’m very much a you learn by experience and the only way for me to give you experience is for me to put you in this situation. So, it’s been interesting to evolve as a manager.
Hannah: I’m just imagining the new planner that’s sitting out there and saying, I hear your career path, Katie, and I’m super interested in doing this, of getting in there, getting my hands into the planning work. But then once I start managing people, you said you needed to open up your times that you could be doing other things. What are the either things that you started doing?
Katie: Yeah, absolutely. So in our world that has meant taking on direct client responsibilities. So basically now I also manage a book of business and part of that is having client development responsibility as well. So onboarding new clients, servicing existing clients, outside of just the planning work that we’re doing. I’m certainly still involved in the planning work through management and supervision of employees, but also some of the more complex financial planning situations that come up. Still heavily involved in those as well. Part of it has also been just corporate management things as well. And that’s an area that, like I said, I’m on that exec team and so there are times where some of my responsibilities lend themselves more to corporate management. I also serve on our investment committee and so that is part of what I also do with my time.
Hannah: How does the planning department interact with the rest of the firm? How do they work together?
Katie: We work in teams first of all, and so we have what I’m going to call client service teams, which are typically made up of a trust officer and an account administrator. In our world, that assistant role, that support role. Are planners are then assigned to teams and so they may work with two or three or four client service teams to deliver the financial planning product to those teams, to those clients. So, they’re involved in the planning meetings, doing any planning focused questions or research that come up. So, they’re that third person on the team, but they may not only serve one team, they’re going to serve multiple teams as part of their planner role.
Hannah: And so people on the financial planning team, are they getting direct client interaction or are they more that back office support doing that work for the advisors?
Katie: They are very much getting direct client interaction. It’s just that that client responsibility doesn’t fall solely on their shoulders. So, they are in client meetings presenting the financial plan to those clients alongside the trust officer, but they’re responsible for that portion of the meeting and then they’re also having contact with clients, phone and email and that back and forth that happens through either the data gathering or implementation and follow up stages of the planning process. So, very much client facing, it’s just they’re not the one that’s ultimately responsible for that relationship.
Hannah: And so in a client meeting, how many people are usually there from your firm’s standpoint?
Katie: It depends on the meeting, but I would say it’s pretty typical to have two individuals. A lot of times that the trust officer and the financial planner. We’re also very much in a succession phase right now where we’re trying to phase in our new generation, our next generation of advisors.
Katie: So, I guess to back up a little bit, that financial planner role, it doesn’t have to be, but in a lot of cases for us it is a entry point to being a trust officer. So, that is one of the methods in our company for someone to work up to a trust officers, is to start as a financial planner. They would typically then go to an associate trust officer and then ultimately a trust officer.
Katie: So, it’s a way to ease them into the financial planning world basically, making sure that they’re comfortable with clients and that they’re learning the ropes and getting ingrained in our process so that they can add value on day one while they work up through that career path. So, it’s typically that trust officer, that planner, it might be the associate trust officer if that team has one. So, anywhere from two to three people may be in that client meeting.
Hannah: And it’s so interesting even just the language that you’re using of calling them trust officers, because so many people call them financial planners versus trust officers. And it’s just interesting to hear you use that language.
Hannah: But that trust officer really is the advisor. They could be a financial planner.
Katie: Yes. Ultimately their background may be financial planning. In our world, we call them a trust officer. So, think of them as the lead advisor, the relationship manager. Those are some of the other industry terms that would be synonymous in our world.
Hannah: So, you had mentioned earlier that your role had shifted and now you came in as a financial planner, you didn’t have this client development responsibilities, but now you do. I’m curious to hear more of what that looks like for you.
Katie: When I started, going back to our previous conversation about Ayco and why that was a great fit for me, and I specifically mentioned because I didn’t have client development responsibilities. So, I very much was not someone who was comfortable with that coming out of school. That was not where my head was at. But I’ve seen, through working in firms and working in good firms, that it really is an easy process. And so part of it for me has just been time and experience and I’ve gotten comfortable with it.
Katie: But for us it’s not cold calling. I wouldn’t even say it’s warm calling. It’s typically people who are coming to us or have been directly referred to us through their other advisors, whether that’s their attorney, their accountant, maybe an insurance broker that they’re working with, or a family member, a friend, a neighbor who is a client has recommended us.
Katie: It a lot of ways it’s very organic in terms of what that a relationship development looks like. And we’re also very, very blessed that our firm really values community involvement. The Trust Company is just a recognized name in our community, but it also gives us a chance to network and meet people and build those relationships. So it’s planting those seeds and you may see the fruit of that labor many, many years in the future. But it’s really just about getting to know people and having very genuine relationships with them so that when they do have a need, they remember who we are and what we do and that’s who they want to go to to work.
Hannah: So, when I talk to a new financial planner, I often hear this fear of getting a role where they have to be finding clients. And what I’m hearing you say is that it’s really not that scary. And even though you didn’t see yourself doing that when you started your career, you’re doing it well now.
Katie: That’s where it goes back to really understanding the culture of the firm that you’re working with. I would say we definitely have a sales culture, but it’s very easy to quote, unquote, “sell your service” when you have so much confidence in what that client is receiving. So, it’s very genuine in I truly feel like anyone that I sit down with that’s not a client and I’m explaining what that process would look like for them to become a client, I’m so confident in the service level that they would be receiving that it’s very easy for me.
Katie: It’s not a sales pitch. It’s simply sitting down with someone and explaining, “Here’s what we identify as your needs. Here’s how we could help solve those problems. And here’s what that would look like.” And so to me, it doesn’t feel salesy. I very much when I started out thought sales was a dirty word. And I’ve realized that regardless of the industry, regardless of the business that you’re in, you’re selling something. It just happens to be that usually in our world we’re selling a service, and so if you have confidence in where you’re working and the services that you’re providing, it’s very easy to do.
Hannah: Oh, I love that. We’re not selling a used car that we’re trying to hide something or a timeshare or something like that.
Katie: Right. We’re not selling the latest widget. We’re selling a service. We’re selling ourselves as they deliver of that service. It’s about relationships is what it boils down to.
Hannah: Yeah, and really believing that. This is an FPA podcast and I’m definitely all in on that, but it’s just this idea of part of their mission statement is they talk about the power of financial planning that transforms lives and if you don’t believe that, it’s like, even if you don’t work with me, please go work with another financial planner.
Katie: Right. And I think that that’s a great point, Hannah. There are sometimes where we visit with prospective clients that for whatever reason we’re not the right fit. We always make sure to get them connected in some way with either the service or the person that we feel like would be the better fit for them. So again, I think it’s just going back to being very genuine. And if you do business right, it’s all going to work out in the end.
Hannah: Well, one thing that I’m very interested in talking to you is about this idea of gen two, or G2, at firms and how G2s are getting introduced into the firm and into the ownership structure. So, can you tell me a little bit about the ownership structure of the Trust Company?
Katie: Yeah, absolutely. So we are majority employee owned. We do have some outside stock holders that are either current directors or helped Mark Knackendoffel, Our CEO and founder, start the business back in 1992. But for the most part we’re employee owned. Every employee of the trust company has the opportunity to buy in. None of our shares are given to us. It’s not an ESOP, it’s not a restricted stock plan or anything like that. As Mark likes to say, we pay cold hard cash for our shares. But it’s a formula every year for employees. It’s based on your compensation. So, it’s 10% of your previous years compensation as well as one additional percent up to an extra 10% for years of service. So there’s a tenure component to it as well. So maxed out, capped out, an employee could purchase 20% of their previous years compensation in trust company stock each year. But again, that formula is based on compensation from the previous year and years of service at the company.
Hannah: Is that something that was implemented before you got there?
Katie: Yes. That has always been in place since day one.
Hannah: When they set that up, you’ve mentioned firm culture a handful of times already. What were they trying to create with that? What was the intention behind setting it up that way?
Katie: So again, earlier we talked about everyone having a voice, everyone having a seat at the table. It was a way to get that. It was a way to create buy-in to the company of making sure that we all were on the same page with the direction we were going in. So, it really just came down to making sure everyone felt valued and felt pride in the company, if you will.
Hannah: When people start, do they immediately start buying into the company or is that a person by person decision?
Katie: Yeah, it’s person by person. It’s the option to buy in, the ability to buy in. It’s not mandatory by any means and you don’t have to buy your full allotment. So, you have some people who just want to say that they’re an owner and so they may buy a couple of shares and that’s great. You have other people who want to buy as much as they can every year and so we certainly have people that are on that path. It’s typically after your first year of employment that you’re eligible to participate.
Hannah: When people leave the company, do they still retain the ownership or are they forced to sell at that point or what is that exit plan, if you would?
Katie: Sure. So, shares that are purchased through the employee plan that we’ve been talking about, one of the requirements is that you do have to sell those back when you leave the company. Typically the company buys those back and so they just go back into the treasury stock pool.
Hannah: How has that changed your perspective as a financial planner working? Do you feel more invested in your company?
Katie: I do and I also think it adds to the conversations that you’re having clients when you’re able to say, “No, I am an owner of the company.” Being still a small business, a lot of times we get questions about, “What are your plans? How do I know you’re not just going to leave?” Things like that. And so it’s a very easy conversation to say, “Well, I’m an owner of the trust company and here’s how that works and here’s why that’s important to me.” And so I think it adds some credibility for our clients also to know that we’re all invested in making sure that our company succeeds and our company succeeds because our clients succeed. So, it’s that trickle down effect for clients.
Hannah: I know succession planning is always a big topic, especially at larger firms. How has this changed that succession planning conversation?
Katie: We all have the ability to buy in and to buy stock, but financially speaking, because our company has been successful, it’s harder for the next generation to get to the same ownership levels that the prior generation has simply based on how the math works. At some point it gets to be hard to cash flow that. That is certainly part of what we’re, I wouldn’t say struggling with right now, but part of the conversations that are being had is how do we make sure that the next generation has the ability to participate at an ownership level that the prior generation has had?
Katie: But more of our succession planning has focused around how do we make that a successful transition for our clients? And if we get that part right, the rest of it falls into place because again, our clients are the number one asset of our business. So, if we take care of clients and we make that transition as easy as we can for them, the rest of it we’ll figure out.
Hannah: Well, I’m curious as we’re wrapping up, Katie. If you were to start over today or for those who are just starting out, what would be your advice to them?
Katie: When I was starting out, I think what I wish I understood more at the time was how important company culture is and making sure that that aligns with your values and your priorities. Again, I’ve had good experiences where I’ve been, but I don’t think I took that part as seriously as I should have in the beginning when I was searching, when I was on the job market. Because these are people that you’re spending most of your day with. And so again, you’ve just got to make sure that you really believe in your company because that’s ultimately how you are going to be a successful professional. So, I guess that’s the advice that I would give is really make sure you understand the culture of the firm and the people that you would be working for.