Leading a Growing Advisory Firm

Maddy Roche: Hello and welcome to XYPN Radio. I'm Maddy Roche an Executive Business Coach here at XYPN, and the host of this podcast. Today our guest is Nathan Donohue co-founder and partner of Consilio Wealth Advisors, a fee only firm out of Scottsdale, Arizona.

Nathan's going to share his experience transitioning nearly $200 million of assets and a team of seven from a broker dealer in 2021, just a few years ago. Today's episode is all about what it takes to run a large firm. With over $425 million of assets and 275 client households. Nathan and his team are busy.

Nathan shares his journey of moving from advisor to manager to visionary of the firm and explains what it takes to delegate confidently and seamlessly to his very empowered team. He shares information about his team structures and his meeting cadence and even dives into his favorite books of 2024.

And as you can tell, Nathan is an avid reader and learner. I trust you'll find Nathan's interview informative and likely inspiring. And his words of encouragement to you, our listeners, to be generous and honest. Without further ado, here's my interview with Nathan

Hello, Nathan. Welcome to XYPN radio. It is so nice to have you on. How are you today?

Nathan Donohue: Fantastic. Maddy, thanks for having me. I'm excited to be here.

Maddy Roche: Of course, why don't you do the honors and introduce yourself and your firm to our wonderful listeners today.

Nathan Donohue: Yeah, happy to. So my name is Nathan Donohue and I'm one of the co founders and partners at Consilio Wealth Advisors. So we are an RIA, founded in 2021. And today we focus on serving technology professionals. So predominantly those at Amazon, Microsoft, Meta, and Google. That makes up a majority of our client base.

So we're fairly niche focused. Today we manage about $425 million for about 280 households. Been in the industry for about 16 years, started as an intern in college, went full time with a large broker dealer. And like I said, we broke away from that broker dealer back in 2021 and started our RIA.

Maddy Roche: Great. Awesome. There's already a lot there, Nathan, and I'm impressed that I have a lot of advisors on the podcast that work in the tech space and focus on equity comp but I love your around the actual organizations that you end up serving, employees from.

So great. And a nice big firm. So I want to dive into how you manage that, but let's go back to the early days. And did you ever think you would be an entrepreneur, Nathan?

Nathan Donohue: Yes and no. So my first entrepreneurial endeavor was when I was 16 years old, I started a mobile detailing business out of the trunk of my car. I was like just a car nut as a 16 year old and that was freedom and independence to me. I kept my car really clean and all of our neighbors took notice of that and they said, Hey, would you mind washing our car?

And then it just spread from there. And my parents gave me, my dad said hey, you can borrow 50 bucks, but you gotta pay me back. And we went down and bought all the soap and wax and all the stuff we need to do. And that was my first job and first business was a mobile detailing. That was like a phenomenal summer.

I had total control of the calendar, a pocket with some cash in it, and four wheels. And it was a lot of fun. In college, I knew I wanted to work in finance. And like I said I took an internship with a fairly large broker dealer. Went full time with them after graduating. And thought at the time that I was a business owner thought that I was maybe an entrepreneur, but really didn't have all of the control and flexibility and freedom that you have with an RIA.

And over the years that became more and more clear. And ultimately we decided to take the big leap and it's been a lot of work, but it's been so much more rewarding ever since.

Maddy Roche: Could you talk to the listeners a little bit more about some of the things you were hearing that were giving you the impression that you were in fact independent, but then maybe some of the sensations that were telling you that you weren't actually independent while at that broker dealer?

Nathan Donohue: So they would tell us, Hey you're a business owner, you own your own firm, you own your own practice. And to a certain degree that was true. We had our own entity. we hired our own staff, but and this is the case across multiple broker dealers is you run your own business, but you have to run it within the confines of a certain box, right?

That box has walls. And sometimes depending upon where you are, you'll have more or less flexibility on certain things. So everything from the technology we could use to the investments we could use to what you can or cannot say in marketing collateral, all were very dictated by the larger entity.

So they were like, yes, you can run your own business, but as long as you do it this way. And over time that just became more and more frustrating. And we also observed a number of cases where those rules and those confines were maybe not in the client's best interest. And so we said, let's go look at some other options.

And when we did about two years worth of due diligence before we finally started the RIA. So we started this process all the way back in 2019, met with everybody. So we met with wire houses, other RIAs, roll ups, other broker dealers and a lot of people were courting us. There were some pretty significant carrots that were dangled as well, in terms of transition or what they sometimes call transition assistance, basically a big fat check.

And we kept finding that there was, okay this seems a little bit nicer, but we have concerns over here on this thing or that thing. And we ultimately decided if we're going to build the vision that we have for the firm if we want to deliver the value that we want to deliver for the clients, we have to do it on our own.

So we turned down a lot of those carrots, a lot of those checks in order to start the RIA.

Maddy Roche: Interesting.

Nathan Donohue: I was just gonna say, I think a good analogy is with inside of the broker dealer space. You say you're a business owner, you are to a certain degree, but it felt very much like a franchisee, right?

So the franchisor dictates, yes, you own your own business, it's your own entity, you can control the profits of that entity, but you have to brand it a certain way and you have to make the goods or services look a certain way. And so I think that's probably the most apt analogy I can use is that a lot of times you feel like a franchise and that's nothing wrong with that.

Like you can build a great business and a great life inside of that. But if you envision something different, if you want more control, you have more freedom in certain areas you in many cases can't do it inside of those confines.

Maddy Roche: I appreciate you sharing with the listener some of the due diligence that you did and talking a bit about some of the options and the carrots that were dangling in front of you. And if it wasn't the fat check that was enticing you, it really sounds like independence was. And so I'm wondering, what was it that you wanted to be able to implement that you were able to say nah, the money isn't actually what I'm looking for?

Nathan Donohue: Yep. So control over technology tools was one. So we wanted to be able to use certain financial planning instruments, certain tax planning instruments. And when you're with a broker dealer or a wire house, they say, all right, great you're an advisor and here's your toolbox. And we've already put the tools in it for you.

And if we said well gosh, there's our clients are a little bit different and they might. Get a lot of value from that tool over there. They're like well sorry. You can't touch that one. That one's off limits. And so change of tools, change of investments as well. So the ability to offer different types of investment strategies, whether that was private or direct indexing at the time.

We also observed that the share classes that were being used were not necessarily the least expensive option for the client. I don't think many clients, let alone some advisors recognize that there's a revenue sharing agreement with most of these mutual fund firms and the broker dealer. And the client could actually find the exact same portfolio for a lot less money.

So for example, when we left our clients, in some cases, we're able to save 15 to 20 percent on their expense ratio by keeping the exact same portfolio by just doing a share class exchange. So that was a component, the ability to run our team the way that we wanted to, the ability to market ourselves the way we wanted to, like we have really brilliant team members and we wanted to be able to write blogs and have a unique website and do podcasts and YouTube videos and share the expertise that our team members have with the world.

And you can't always do that. And so the ability to have, to be able to, the ability to share that was a big component as well.

Maddy Roche: I have a lot of advisors as a coach, I've witnessed advisors who are either making the transition or have made the transition, have some worry around how to explain that to the clients that they're bringing over that actually we're going to save you more money now that I'm running this new business.

There's a little bit of conflict and ickiness related to that conversation. Could you flush that out for us a bit and how you navigated that?

Nathan Donohue: Yeah, we did exactly that where we went to every single household and we said Hey, Exciting news, we're starting a different, our own firm. And here are the four reasons why we're doing it. Here are the four reasons why it's beneficial for you. And conflict of interest was a big one. And we went to those clients say, Hey, there's actually this intermediary.

And in some cases there's revenue sharing with that they're making, you could actually pay less money. And in almost every, in most cases, or not in most cases, but in plenty of cases when we talked to our clients about that, they came back to us and they said, yeah, we always knew that was there.

Like we always knew there was a conflict.

Maddy Roche: Interesting. 

Nathan Donohue: Clients aren't dumb. They're aware, but they all said the same thing as well. They said, but we trusted you, right? We trusted that, you were always telling us the truth and that you were doing the right thing. And so they, in many cases, when they said that, they're like, we're really happy that you're doing this.

And we're 100 percent in. What paperwork do I need to sign? Like in our business, when we made the transition, I think, so we were with a firm that had, we had advisory business, we also had brokerage business, so we could get paid either on a flat, a fee basis, or we could get paid on a commission basis.

And the commission basis was maybe 4 percent of our revenue at the time, it was paltry. It was not what we were focusing on. We were focusing on doing financial planning and doing flat asset management. And so we told clients like this is less than, it's a tiny little amount of our revenue, but we just don't even want it to be an option. We don't even want it to be a conflict. So when we left and started the RIA, we don't have a broker dealer affiliation. So we are just registered with the SEC and we share that with clients. So that makes perfect sense.

Maddy Roche: You make it sound easy. I hear a lot of hesitation with advisors around how do I go back and explain that I was still doing what I was supposed to do with those clients, but there's this new way of billing and charging. So thank you 

Nathan Donohue: No, most I found the opposite. Most people are like yeah, , we knew that there was a slight conflict, but we trusted you. And now that you have something better to offer, we're in. Yeah, it was a scary conversation. I have to, for sure. Like we weren't worried about the exact same thing, but it was.

Super positive. The trust and rapport in the relationship went up by a significant margin.

Maddy Roche: And how many clients did you transition?

Nathan Donohue: Oh gosh. We brought over about 180 to 200 million and we probably brought over about gosh, number of households. I'd have to go back and look at my records, but it's probably somewhere between a hundred and around 150, 175, somewhere in that range. I'm guessing. It was also a great opportunity to clean up the book too, because we've been doing it for 16 years, had a lot of folks that we brought on originally, great clients 15 years ago, maybe not so much today.

And so we invited a lot of clients to come with us, but we did not invite everybody.

Maddy Roche: And I hear you say, we, 

Nathan Donohue: So, I have a co founder, Chris, and we have a phenomenal team of nine in total. So we took the team with us as well. So that was also part of the messaging was your experience, who you email with, who you talk to the financial planning philosophies, all that's going to stay exactly the same.

Maddy Roche: That is reassuring to clients.

Nathan Donohue: Yeah,

Maddy Roche: Awesome. Okay. So tell us a bit about were you working with these tech professionals at the broker dealer, or is this a newer development for you? 

Nathan Donohue: We were. So I grew up in the Seattle, Washington area. So backyard for Amazon and Microsoft and Meta and Google have every major tech firms got an office in Seattle. So that niche started just by default, right? We just got a lot of referrals to people that work there. But when we started the RIA, we said we now have freedom and flexibility to market ourselves, how we want to market ourselves.

And we go we're very bold with we do financial planning for tech professionals. If you go to our website, that is the landing page. It says financial planning for tech professionals. It is very clear what we do. and that's what we want it to be. The concentration of technology professionals at that niche has only gotten stronger and more robust since starting the RIA.

Maddy Roche: I know referrals end up being a major source of new clients. Once you even just cross the threshold of 30 clients in the space, but originally where were you finding your clients?

Nathan Donohue: Referrals same, very similar way. So today we do get more leads from some of our marketing efforts. So we do get more introductions, people reaching out from the website. we have really strong blog content. So if you Google "Microsoft ESPP" their employee stock purchase plan. We're one of the top five search results or "Amazon 401k", things like that.

We're typically within the top five, six search results. We actually get quite a bit of traction from some of the content that we put out now.

Maddy Roche: What other marketing channels do you rely on?

Nathan Donohue: So we've got blog marketing, market commentaries, YouTube, podcast. We have, a lot of our team members will write articles for various publications, whether it's Smart Asset or Bank Rate, you name it, Nerd Wallet, Life Hacker. So we've got quite a bit of content on a regular basis in the news. gosh, what else?

Those are the dominant ones.

Maddy Roche: Beautiful, and what kind of tracking across all those channels are you doing on a, weekly basis? I talked to a lot of advisors about needing to keep a pulse on, and making data backed decisions around their marketing investments. How do you manage and track the results of your initiatives?

Nathan Donohue: Yeah. We have an Excel sheet. So it's probably just like everybody else. So we track every new lead that comes in. Where did they come from? How much, what was the approximate AUM? Did they engage with us for a financial plan? And we can go into what our service and process looks like there.

Did we have an introduction? What was the date of the introduction call, first meeting, second meeting, did they come on board as a client? Did we close them? Did we onboard them? So we track all that. We develop ratios for our closing ratios, break it down year over year. and then we can also analyze, what, percentage of our clients came from referrals versus the blog versus these other avenues.

And even today, even with the amount of traction that we do get from the marketing efforts. Majority of clients still come from referrals, right? Just happy clients introducing us to them.

Maddy Roche: Let's talk a bit about your service model. What could a client expect when they work with you?

Nathan Donohue: Yeah. So we have a two step process. So let's say you came to us today. You said, Hey Nate, I'm a principal at Amazon. I'd be interested in working with your team. I got referred to you by my neighbor. Phase one is what we call design. So phase one is an initial financial plan where you come in.

We'll take a look at. All your investment accounts will ask for statements will ask for the last two years of tax returns, estate planning documents, insurance policies. We'll go through all of your goals. What do you want the financial plan to look like? And then our team will put together the full analysis for you covering all those topics, education, retirement taxes, the works.

We also put together a written very detailed executive summary of that analysis. So we'll break out those recommendations for each of those respective categories. And that is our deliverable to you. We charge $4, 950 for that three monthly installments of $1,650 per month. So it's a three month engagement, and then we're done. So we tell people that you're going to have so much information. You could go ahead and, It's if you wanted to build a house first, you have to get the blueprints, right? We're gonna give you the blueprints you wanted to go build the house yourself You could you'll have the information to do so Phase two is when they say hey this blueprint looks great I love the house you designed for me.

I feel like this is exactly what we've been looking for can you help me build it and maintain it and that's what we call Phase two and that's where we transition to an assets under management engagement and that is a flat cost as a percentage of the assets it's tiered. So the more money that we manage, the more of the lower, the composite cost is very similar to other firms.

And then we will typically meet the client two to four times a year, just depending upon what's going on in their life. But that is an ongoing perpetual engagement. 

Maddy Roche: Do you have a time frame that individual has to move from design to the second phase or is there, if they came back a year later, would they be able to roll right back into the second phase?

Nathan Donohue: We have not observed that's happened yet. Typically, typically they convert relatively quickly

Maddy Roche: Okay. What's your conversion rate between the two?

Nathan Donohue: about 90%.

Maddy Roche: Beautiful.

Nathan Donohue: Yeah. If not, I haven't looked at it in a couple of weeks, but I think if last time I looked, it was about 90 low, 90 percent.

Maddy Roche: And what do you see among these tech professionals as some of the themes that they really need you for?

Nathan Donohue: Stock concentration is one. So a lot of times, most of our clients that come to us, they are, they are in tech, obviously they are also oftentimes first generation wealthy. So a lot of our clients don't come from money. A lot of them are also first generation to the United States. So a lot of our clients come from India, Pakistan, Mexico, South America, parts of Asia.

And so they're looking for, they're families that are very busy. They've studied hard. They work very hard and they wake up one day and they go, holy crap, like we're rich. Tech stock has exploded. We now have a million dollars of Meta and half a million dollars of Microsoft.

And so their portfolio looks really concentrated and they have very, high incomes. As well. So taxes are a massive problem and they typically have kids by that point. They've reached a certain level of success in their career where they're at a leadership level and they're just really busy and they're looking to help delegate to delegate some of the execution of this to a professional team.

But that is typically who we're working with.

Maddy Roche: I loved as we prep for this call, you talked a lot about wanting to help your clients live their best lives and make sure that they enjoy what they've just achieved. Talk to us a bit about how you and your team support them there.

Nathan Donohue: Yeah. So our purpose, we are really passionate about our purpose and our core values. And so our purpose is to empower our clients to live their lives fully. Our purpose is not to garner a higher rate of return or to save them money on taxes or to even put together a really robust retirement income plan.

That is not our purpose. we believe money is purely a tool to accumulate memories of people that you care a lot about. That's the purpose behind this. A good example is actually had a meeting earlier this week where husband and wife and one of the spouses was really frustrated at work.

They've done a beautiful job saving money. and the one spouse was really frustrated at work and they said, gosh, I want to quit, but I don't want to disrupt our plan. And can we still educate our son? And my other spouse was interested in taking a sabbatical maybe in a year or two.

And we ran it and we're like, Quit like tomorrow, you're fine. Like not only can you quit, you could take a year off. You could actually potentially never go back to work if you don't want to. And just being able to, like being able to tell clients that those are family decisions, not financial decisions feels awesome.

Awesome. 

Another good example was we have this other family that we work with and their, two daughters are getting to the oldest is about to think to enter their senior year in high school. And the husband said, gosh, it'd be great if we could take six months off and just be with the girls.

Cause this is the last time the four of us will all be under the same roof perhaps. And so we ran the plan. I'm like, yeah, Take, don't just take six months off, take a year off. Go be with your family. This is the last time you can spend it together. And that seems so counterproductive from a math perspective, but that is the whole point.

You've done a great job for decades of saving money to have the flexibility and the freedom to use it. Life's not about accumulating dollars, it's about accumulating memories. And so we're really big on that from a purpose standpoint.

Maddy Roche: The permission that you're giving to clients. That's so beautiful.

Nathan Donohue: Spend the money, blow it. Yeah, go have fun.

Maddy Roche: How has your relationship with your own financial picture evolved as you've built this business as a coach, I witnessed such shifts in advisors over the years of them wanting to make it too, and so many of you guys don't actually have financial planners of your own. So I'm wondering how to keep yourself steady with your family, making sure that you're balanced.

Nathan Donohue: So my wife and I, we have a financial planner, so we have somebody that we meet with a couple of times a year and gives us the same advice. Cause I have the same anxiety that most of our clients have about money. And like growing up, we had financial turmoil for a lot of it. And so I get my own anxieties around it.

So we have a financial planner. The other thing that's been really helpful is my wife and I have a family finance meeting once a month. Once a month, we get together, we go over all of our accounts, we go over all of our transactions, we go over our cash flow, we go over our investments, we ask tough questions like, where did we spend money last month that brought us zero joy?

And how do I get rid of that expense? If I can, can I just get rid of that? Or where do we spend money that brought us tremendous joy? Can I, spend twice as much next month? That was great. Are there subscriptions we're not using? Like how, what part of our finances makes me happy? What part of our finances gives me anxiety?

As we just have a very open conversation about money in our family, in our household. And we've been doing that for probably three to four years now, every single month. It's been awesome.

Maddy Roche: Oh, I have not yet heard from an advisor that talks that way about really sitting down and being goal oriented. Would you mind sharing what some of your goals are for yourself and your family as an entrepreneur?

Nathan Donohue: So we, we like to keep things very simple from a finance perspective.- so a couple of years ago it was to pay off any other outstanding debt aside from a mortgage. We accomplished that. We also use a fairly simple way of figuring out how much money to be safe and how much money do we spend. So for every dollar that comes into our household, we set aside a third of it for federal and state taxes.

We set aside a third of it for our investments. And that goes into various different places 401K brokerage accounts. HSAs, real estate. You name it. And then the other third we have to spend. And that one has actually probably brought me the most freedom. Cause I've always get concerns and anxiety around cash and cashflow as a business owner.

Like your cashflow is not always guaranteed. And, but just to say no, if we have taxes taken care of, if we set aside, if you're saving a third of your gross income, you'll be just fine in the long run. And then you have total freedom to spend the other third. That's been very liberating for me.

Maddy Roche: I'm always so interested in how individual advisors own personal money scripts and values can actually become biases in how they plan for their clients. It can become philosophical and become their theories and how to plan and be very helpful in the marketing space and helping advise, advisor clients meet their goals.

But I'm wondering, have you found anything else about your own personal experience with money, either bleed into your approach or potentially be a roadblock for you that you've had to work around?

Nathan Donohue: I think one thing that's been helpful is to have conversations with our clients about how money makes them feel. It's not just our job to talk about expense ratios or taxes or rates of return or projections or yields or whatever, but how do you feel? How do you feel financially?

And we have some clients who are like, I'm really nervous. I have anxieties. okay, let's talk about that. And like, how can we address that? How can we help? Because the, point of accumulating all this is not to give you anxiety. It's the opposite. And so I think just having a conversation around and owning that, that can happen and that does happen and that's okay.

But let's just have a conversation about how we can try to address it.

Maddy Roche: On that note, the tech industry has had a lot of ups and downs in the past couple years. I imagine that you've had more than a few conversations around layoffs and, industry shifts that your clients are witnessing. Could you give us a little summary of what the past couple of years have been like and how you've navigated that from a planner perspective?

Nathan Donohue: So if we go back to boom time, so 2019, 2020, 2021, most of our clients were bouncing all over the place. They're changing jobs frequently. They were getting a lot of competitive offers. So a lot of our job is helping them put those job offers side by side and giving them feedback. Hey, this company has a different comp plan.

This company has employees stock purchase plan. This company's vesting schedule looks differently here and here. And then in 2022, that all changed, right? Massive layoffs, tech sector specifically got hit really hard. It's interesting for our firm, whenever the market experiences a lot of volatility, we have our best years in terms of net asset flow into the firm.

So 2022 was our best year ever. Wow. Before that it was 2020 and those were both very volatile years. And so whenever people seem to be asking questions or having concerns around their portfolio. We do really well in terms of a net asset flow year. But I would say that it has, it has provided clients with some context of Hey, this doesn't always just go up.

My job is not always super safe and we need to make sure that we plan for some of these contingencies. So we do have, especially over the last 12 to 18 months, we have more clients saying, Hey, can we model? What if I got laid off for six months or a year.

 Absolutely. We can model that. And, or what if that happened?

Where do we go for cash? And so let's talk about your liquidity. So you are having more of those conversations.

Maddy Roche: Great. It sounds like you're really in the advisor role still. How frequently are you meeting with clients?

Nathan Donohue: So typical schedule. Monday is an all internal day. It's a Monday meeting with the team. We have our Monday morning L10. We use a lot of EOS inside of running our organization. Tuesday through Thursday are probably the heaviest client days. So we don't take, I don't take meetings until 10 o'clock. probably any given week, anywhere from 8 to 10 client appointments per week.

So, decent amount of volume. It depends. and then Friday is a lot of, Friday mornings are our education time. So we always have, Friday's a learning day at Consilio Wealth Advisors. Every Friday morning we do some type of learning event. then we have some internal stuff, some marketing stuff, some projects.

So Friday's a little bit of a catch up day as well. I'm the CCO for the firm. So I do our, call it my compliance corner on Fridays as well.

Maddy Roche: Great. Oh, I'm glad to hear. I love some of this lingo that you're sharing. talk to us a bit about those Friday morning, learning sessions. What is that full team or individual time blocks? What's, that look like?

Nathan Donohue: So one of our core values is thirst for learning. So we believe we need to have this insatiable desire to learn. Every single day we show up, we have to try to learn. Something that's one of our core values. Like we, we, our vision for Consilio is this is the number one firm to work, if you want to grow as an advisor, if you want to get smarter and grow your skillset, this is the place to be.

So one of the ways that we reinforce that is Friday morning is a learning event. We have four of them every month. So first, first Friday of the month, we have an external speaker come in. So somebody from the outside. So we have might be an estate planning attorney is going to come in and talk about, trust planning, right?

So we have somebody from the outside coming in and presenting to the team. The second Friday of the month, we have an internal speaker. So everybody at the company has to present on something once a year. So today, one of our financial planners, he did a presentation on the history of the federal reserve.

It was awesome. We had a great discussion about the Fed and talked about the history and its impact. It was awesome discussion. We also have a firm offerings meeting every Friday. So that's the third Friday of every month. That's where we get the entire organization together and we talk about these are the products and services.

This is what our process looks like. These are the investment strategies we employ. This is our billing structure. So if a client calls anybody on the team, they should hopefully be able to look up, here's what you're paying. so that's our firm offerings meeting. And then we have an advisor huddle on the fourth Friday.

And so that's where the advisors get together and we talk about cases, role play. We have a service schedule. So we have certain topics that we need to cover throughout the year throughout our review cycle so that every client has the same experience. Every advisor uses the same verbiage, the same philosophies, and so we train on that every single month.

So that's our, those are our Friday, and then our investment operations team has a different meeting. Our administrative team has a different meeting. So every Friday morning we're learning something new.

Maddy Roche: Oh, I love that. And listeners, whether you have a big firm like, Nathan's firm or not, I think dedicating an earmarking time for professional development is absolutely crucial for any advisor in this space.

Nathan Donohue: We have a pretty robust education and designation bonus pool as well. So we like to believe that advisors or educators are not salespeople. And so in order to be a better educator, we need to learn, like we have to be able to understand a lot in order to share that with others. So if team members want to get their CFP® or CFA or CPA or RICP®, we will cover the expenses for the study materials, we'll cover the cost for the exam, for each test you pass you get a pretty sizable cash bonus when you complete the designation you get a pretty sizable cash bonus and typically it comes with a raise as well. It's like we put sizable incentives behind our team members.

Maddy Roche: I'm interested in kind of compensation generally at the firm. What industry benchmarks are you using? Or do you just have a nice gauge on, what you think the value of the work is from each of your employees? How do you do that?

Nathan Donohue: We use industry benchmarking studies every year. So we'll use, Fidelity's benchmarking study, Investment News and Commentary, a couple others as well, but we're probably looking at least three to four, studies and we'll do, our structure is that we do that review in Q4. In, January we do part of one of our first review.

So we have four reviews throughout the year with our team members. First one in Q1 is where we talk about compensation benefits and we make any appropriate changes there or any promotions. and then we do quarterly reviews every quarter thereafter.

Maddy Roche: I'm interested in kind of your experience as an entrepreneur here. What would you say over the past several years has been the hardest part of this on a personal level for you?

Nathan Donohue: Starting the firm was really stressful, like very stressful. It was a ton of work to get ready for this. You have to hire attorneys. You have to hire transition consultants. You have to get a website ready, a brand. You have to figure out the messaging to the clients. You have to demo. I don't even want to know how many pieces of technology we demoed and you have to make a decision that's going to last years based upon maybe a couple of demo sequences.

And that is a ton of work and it's a ton of stress and it's risky too, right? What if people decide not to go, you understand the industry averages, but what if they say no? And some people did say no. But that was probably the most stressful part. But now I look back on it. I'm like, that was so much fun.

Like we had a, I had a blast doing that. Wouldn't have it any other way.

Maddy Roche: How did you manage the transition with the team through all of this as, the leader and the visionary of the firm?

Nathan Donohue: Constant communication. So we have fairly regular meetings with all of our team members. So every Monday we have our L10, level 10 meeting. And then Tuesday through Friday, we have a daily team huddle. And then we have various group we're just big on recurring meetings. So investment operations meets at a certain time, every single week, firm administration, Team development, things like that. So very regular communication. Hey, this is the direction we're going in. We're going from A to B. These are the steps we're going to take along the way to get there. Let's make sure we check in and we're tracking along with that. When we were making the transition, we told our team members we needed to get about $180 million over in three months.

We put some incentive behind the team in order to do that. And they raced at it. We got it done in 30 days. We moved about $180 million in about 30 days. It was awesome. It was a ton of work. We processed a lot of applications. But, but every day we were, the whole team knew what our number was. They knew what the scoreboard was. every day.

Maddy Roche: Yeah. And so are you utilizing the entrepreneurial operating system at a peer level, EOS as, folks know it by? 

Nathan Donohue: We have implemented components of it. We could probably use with an actual implementer coming in and implementing others as well, but we use the VTO. We use the level 10 meeting. We use a variety of components of EOS. Yes. I'm like a very big structure process oriented mind. That's just how I think and how I live my life.

And so when I read Traction I was like, yes, this is it. And so, yeah, we use components of it and it's been phenomenal.

Maddy Roche: Are there any other programs or systems, that you've committed to at the firm, that have helped you succeed?

Nathan Donohue: A lot of the programs we've developed internally. So like a lot of the coaching and development has been really big. So we, we do quarterly reviews with, team members. Some team members will also do monthly and weekly coaching as well. I've always maintained that I want the business to grow far beyond me or my partner, right?

It should be about the organization and the team members. I think that's what really drives value. For the company, what makes it worthwhile or worth something is if it's not just the, let me put it this way. I heard one time, somebody said, you have a business where you can go on vacation for six months and you come back and the business is still there.

And I think that is BS, frankly. Like I think you will know you have a business when you can leave for six months and you come back and the business is actually bigger, that's when, it's not just having a self managing company, it's having a self multiplying company as Dan Sullivan from Strategic Coach will put it, like that is really what we're trying to drive for.

And in order to do that, the founder-advisor has to delegate a lot of components of the business to other really smart people and support them in doing those roles.

Maddy Roche: And how's that been for you personally, as you've had to delegate away some of these accountabilities?

Nathan Donohue: Years and years ago, it was really hard. Today, it's gotten better. I think part of that has come back to hiring. We hire really smart people today. We pay them very well. Another great line I heard one time is, Pay your people a lot of money. Because you can expect a lot from them too. And so that's something that we've always implemented.

We always pay more, all those benchmarking studies we were talking about earlier. What's that top quartile let's pay a little bit more than that, so we hire really smart people. We hire really passionate people. We use assessments to try to understand what type of a personality, what type of natural traits do they have?

So we'll use DiSC, Culture Index to try to identify the right person for the right seat. it's really hard initially because there's so much to do but as the organization grows, it becomes a little bit easier. And I think for me, it's been really fulfilling to be able to see other people do things better than I probably could have done. I think that's the sign of a job well done as a leader. It is, if you can say I used to do that but now you do that and you do a much better job than I do. And I'm just so happy about that.

Maddy Roche: I think a sign of a fabulous leader is someone who can say that confidently. Alan Moore, our founder, co founder with Michael Kitces for years has always said that has been a big evolution for him to be able to acknowledge. And, as I talked to different advisors as they are able to release the ownership over some of the tasks and give credit to the team doing it, that often the work is done better and differently, than just that one founder.

So kudos to you, Nathan, for getting to that space.

Nathan Donohue: Great line was, and I think this is just, gosh, who was it? Seth Godin said this, Seth is like the GOAT on leadership and values. He said, give credit, take responsibility. And that is really, huge. If you can give credit to your team members for doing a job well done and when things don't go well, that is my fault, that is my responsibility.

I think that it's just, I'm not always perfect, but strive for that.

Maddy Roche: I think this conversation of ours, Nathan, has been a beautiful demonstration of how you as an advisor have moved not just from an advisor into the entrepreneurial role, but into a leadership role, which is so crucial for firms that are looking to get as big as your firm has gotten, to be able to balance the responsibility and the accountability of being in charge of other people's jobs and livelihoods and the results that they produce.

So I think it just, it speaks volumes of the kind of team that you've created and what you've built.

Nathan Donohue: Thank you.

Maddy Roche: As we look forward, what can we expect Consilio Wealth over the years? What do you hope to build and get to?

Nathan Donohue: Yeah, we're not done growing. So vision is to get to well over a billion within the next couple of years. And we're on the right path to get there. the vision is to bring on other. Wicked, smart, and incredibly passionate people onto the team. That's what gets me really fired up is how can we grow this organization?

How can we start to layer on other services as well, whether it's. tax planning, tax returns, other types of investment strategies our clients might be looking for. So how can we continue to expand on what we're offering to clients? And also how can we, I like to think about productizing our service.

So professional services is really tough to scale because what you do changes a lot, right? Whether you're an attorney or an advisor or a CPA. It is really tough sometimes to scale because sometimes your time is the bottleneck and you have to work really hard to turn your service into a product.

if you think about a widget factory, they make the same widget the same way every day. How can we think about our service the same way. How can we productize our service such that it's repeatable? It's scalable. It's predictable. It's reliable because that will allow us to continue to grow And also deliver the same experience to the same clients in the same way every day.

Maddy Roche: Well said. What's it going to take to get there?

Nathan Donohue: Well a couple more clients will help But I think like just a growing team, the right people in the right seats on the bus. 

Maddy Roche: Absolutely 

Nathan Donohue: And a little bit of time. 

Maddy Roche: Nathan, just from your background, you and I have connected over, our favorite books and I would be interested in you sharing with our listeners, as we wrap up this podcast, a couple of recommendations for books from mindset to actually executing how to run the firm. what have been your top favorites of 2024?

Nathan Donohue: so couple favorites. I like books that changed my mindset around certain maybe limiting beliefs, or I also like books that are, tactical systems you can employ. I also really like stories around entrepreneurs and business leaders that talk about times of struggle. So two great books that are biographies or autobiographies.

One of which my favorite is Shoe Dog, Phil Knight, founder of Nike. That is a book of just sheer grit and determination and a little bit of luck. That is just a wild story and roller coaster that he went through. another great one is Ride of a Lifetime by Bob Iger. A thing I really like about, about his story is he is very transparent about the success he had.

He's also very transparent about his failures. And just getting to hear from both of those authors and leaders about what went well, but more importantly, where they screwed up was fantastic. I'm also a big Dan Sullivan fan. So founder of Strategic Coach, he's got his book. 10X Is Easier Than 2X.

This forces you to completely reframe how you think about your business, right? We can't just keep doing the same thing every day, every week, every month, and expect us to astronomically grow our business. So we have to go about completely changing our service model or how we're going to grow if we're actually going to have a 10x business.

And he talks about how that's actually a lot easier than trying to 2x your business. if you want to double your business, that might just the only input you need to change is your time and your work, but that means you have to work a lot more. But if you want to 10x the size of your organization, you have to think completely differently.

And that actually might be a lot easier than trying to double it. He's also got a great one, Who Not How. We're big on team, getting the right person in the right seat. Your problem isn't, you don't necessarily need to solve your problem with a how, you might need to solve your problem with a who and the right person. Measure What Matters is a great one. This is a tactical one on OKRs, by John Doerr, making sure that you're actually tracking the right stuff in your organization. Traction. Is a good one. That's for EOS, and Dan Martell's Buy Back Your Time was one of my favorites this year. All about time management, just about everybody needs an assistant.

And he talks a lot about that and how to manage your time. at a personal level, probably one of my favorite books was The Comfort Crisis by Michael Easter. This is a great book about how human beings have been, are driven for comfort and how counterproductive that is to our growth. So he talks a lot about getting outdoors and being bored and putting your phone away and dopamine management.

And, just a phenomenal story about how he spent five weeks in the Alaskan bush with some hunters, and then also a bunch of other, he's very research oriented as well. So he talks, he goes and meets with a lot of professors and professionals about, what he's studying. And it's a phenomenal, book.

Maddy Roche: Oh, I love it. so many of those actually came to mind as you were talking about how you built that business, especially 10x Is Easier Than 2x, is it is sitting on my shelf and you must have had read it, to be able to do what you've done over these years. 

Nathan Donohue: Yeah. When I first, finished listening to it on Audible, I was like, that was fantastic. I got to listen to that again. So started it all over again.

Maddy Roche: That's awesome. Thank you for sharing, your book recommendations.

Nathan Donohue: Happy to.

Maddy Roche: Do you have any advice for our listeners who may not have left that broker dealer yet, who may be a little hesitant to doing this? What's on the other side for them? What could you advise them about, in terms of holding as a carrot for them in the future?

Nathan Donohue: The first thing I'd recommend people do is to go out and meet with other firms that you could join or other people that have started their own firm. Go and talk to a lot of people, go talk to other broker dealers, go talk to a wire house, go interview with an RIA, go talk to a friend that started their own and ask a lot of questions ask tough questions. Because one of two things will happen. You'll either decide that no, actually where I am is the right place. And you'll have even higher confidence as a result of that, right? no, I actually already know what's outside these walls. And I like where I'm at. And that's great. Or you might decide, gosh, I now understand how these platforms work. And I could see a great opportunity for my team and my clients by starting our own firm or joining this other one over here. And you might decide to make that shift. And, you don't sometimes you don't know what's what other doors will open until you've closed one already.

So it's a little scary to do that, but sometimes you need to close the door in order to see what, other doors you could possibly have ahead of you.

Maddy Roche: Beautiful. Nathan, it's been a total joy to talk to you over the past hour, and thank you so much for showing what's under the hood of a firm as big as yours, and I hope that you achieve all of what you have just laid out to our listeners, and I trust that you will.

Nathan Donohue: Appreciate it very much. It's been fun. Thanks for having me.

Maddy Roche: Thank you.