Better practice management and productivity, with Ray Evans 

Hello, and welcome to the PracticeLab podcast, where we talk to top advisors about what makes them successful, so that you can apply those lessons in your own business. 

I'm your host, Will McKenna, and this is part two of our conversation with Ray Evans, from Pegasus Capital Management in Kansas City, Kansas. As we learned in part one, Ray leads a team of six associates with assets approaching $500 million. Now, in this episode, you'll hear Ray describe his team-of-teams approach in an ensemble practice, how that has both helped him grow and also added energy and new ideas to his business. We'll also dig into several practice management and productivity topics. Ray reveals what he learned about productivity from working with the coaching firm, Pareto Systems. 

So, here's Ray, kicking it off talking about his team-of-teams approach.

Ray Evans: Well, it's been really fun. There are two other significant advisors within the Commonwealth organization in Kansas City, one of whom I office with, and he has his own team as well. And literally, probably 2014-15, we started talking about, "Man, wouldn't it be fun to get under the same roof and see if the synergy we think that would happen, actually happens? And worst-case scenario, we just office together. And we see how that goes?" Well, we finally put this together with a couple of other Commonwealth teams in Kansas City. And so, January of 2017, we started officing together, and the name of that entity in our firm is Infinitas Wealth Council. 

And you kind of hit it, it is a bit of a team of specialists. One of the teams is a tremendous 401(k) practice with, I might add, a lot of people. So, we're able to chase some business now that has multiple locations, not just Kansas City. So, we can, you know, get on planes and service people from around the country. One of the partners has a terrific practice primarily, converse to me, with people who work for publicly traded companies. So, he's the, you know, the incentive stock option specialist and has a great background from that standpoint. And so, it's very easy to drag him in when I encounter something like that. We have an advisor who’s got an expertise working with families that have special needs family members. Boy, is he talented and bright and smart and, you know, good-hearted. So we've got a nice cadre of folks with – again, I wish I could tell you we sure thought this would be the case 10 years ago, but you know  – guys who have a complementary skill set, and different practices with different acumens that really integrate well together. 

Will McKenna: That's fantastic. What an interesting mix of specializations and niches. So, what are the benefits of this? You hinted at it, but talk about what are the benefits of working in this arrangement?

Ray Evans: Well, I'll give you a quick example that's current. I had a client call last night. And he said, “So are you super…” - he just assumed I was, he goes, "Are you super-knowledgeable regarding nonqualified deferred compensation types of plans and benefits?" And I said, "You bet." And, you know, I knew who… I knew four steps down who actually is. And so, he gave me the scenario, and the opportunity. And so obviously, we're working with some other people here in the office who we'll bring in. And, you know, that's what they do. And so, it's just an opportunity that I wouldn't have had otherwise. And it ties the client to us a little tighter, and a little different way, then, you know, him just working with me on his own personal planning and his own personal investment stuff. So, you know, it's kind of exciting.

Will McKenna: That's great. And is there some arrangement? Do you just scratch each other's backs? Or is there some revenue sharing? Or how's it set up?

Ray Evans: Yeah, so we do not throw everything into one pot. Every team is, you know, is their own revenue source. We share all kinds of expenses. But in a situation like this, we obviously share revenue and whatever the formula. I mean, we've never had a situation where whatever formula we came up with wasn't satisfactory. So, a little bit of a case-by-case basis, but I pretty much know what the 401(k) guys need to bring them into a situation and so on. So, it's really been fine. And they've been great to me as well.

Will McKenna: That's great. And it sounds like you've got somewhat the best of both worlds and that you have your own small group but then the bigger enterprise that you can draw energy and inspiration and ideas from. Earlier in the conversation, you talked about growth and some things you're excited about. How are you thinking about growing the business from here? And what [does] the next two, three, five years look like for you?

Ray Evans: Yeah, it's interesting. You know, I think we've got or are getting our arms around what our succession plan, ultimately, looks like. But one thing that was interesting about the lockdown, Will, is that I got a whiff of what not going into the office looks like. And it wasn't that fun. I was surprised it wasn't that fun. And I was sort of laughing at myself, you know, because you sit there and you think, “Oh, I can't wait till I retire. And I'll have all this time to do stuff.” And I don't know, maybe I'm a simple guy, but there wasn't that much. I didn't, it didn't look that fun. So, it really helped clarify in my mind, that I want to do this for a while. And the stuff that really gets me fired up is the opportunity to grow, and do it smartly, and not be in a situation where you have to chase something you shouldn't chase. 

So yeah, I mean, we kind of feel pretty excited about the opportunities that exist. And most of that has been with this group integrating together, or these groups integrating together.

Will McKenna: In this next section, Ray describes his business planning process, and how his team has been working with Pareto Systems, a well-known coaching firm. Pareto has been helping Ray's team document their business routines and set up standard operating procedures to improve their efficiency and productivity. And that's so they can spend more time on what really matters, which is working with clients and growing the business. And finally, Ray reveals his lessons learned from more than 30 years in the business. So, take it away, Ray.

Ray Evans: I had two consultants the last four years, one of whom some of the folks may know, the group at Pareto, Duncan MacPherson's group. And we just by luck have a very good Pareto consultant in Kansas City, about five minutes from here. We’ve worked with him for a couple years; he's been great for us. 

You know, a goal for several years has been to grow at 15% a year and try to double business every five years. And I would say that the goal is not, in my case, to acquire other firms. I think that would bring a level of complexity that I don't really, I wouldn't gravitate to. I like being with clients. I mean, it's fun to run my team, that we've got a number of households and a number of folks to work with that, to me, work really well. And the idea of adding another level of complexity, no matter how profitable all that might be, that's great for a lot of guys. It would not be great for me. So that's probably not my vision. And having all this has been a lot of fun. 

And that I think sometimes, in the RIA and independent channel, you have your smaller groups. And it's fun, but you kind of got these small groups that you're like, "Well, who can I go talk to about what just happened now?" And certainly, we don't lack for that here. I mean, there's a lot of energy up now in the halls, and it's kind of healthy, competitive, in a good way. So yeah, I mean, I think the opportunities are there. I mean, I think you work your whole career to get to a point where your peer group are decision-makers and you can chase them down and not seem like you're 30 years younger than the person you're checking on. So, this is a good opportunity. And we're going to keep driving.

Will McKenna: The Pareto piece of it. Tell us more about that. Are they helping you around things like efficiency and productivity as well? Or what? What are you getting into? What are the mechanics of what that looks like?

Ray Evans: I would love to tell you we had this all figured out before, but so much of our practice was in my head and in my director of operation's head. And we needed to document everything, and we needed to, I mean, did we have a process for most things? Yes. Did everybody know it besides me? No. And as we add more people, and it's natural that we are and will, we've got to document this kind of stuff. 

So, the very first thing they do, which takes a year or so, is let's go through every single process you've got. Let's talk through it. Is it the best way to do it? Are there best practices we can shamelessly steal from somebody else in the system? And you know, if so, let's evaluate that. So, they've been incredibly valuable from that standpoint. And the meetings typically have involved their entire team. So, it's really good and inclusive, and you get input from people that maybe don't get asked for input as much as they probably should have before, by me. So, we've gotten a lot out of it. And we've now kind of gotten past that part. And now we're going through some really interesting things, making sure that we are tracking Moss Adams studies and those kinds of things from a compensation standpoint. You know, are we doing everything we should be doing from that standpoint: How do we stack up? And so that's been really valuable.

Will McKenna: That sounds really interesting and putting some, call it, business routines in place to get those documents and standard operating procedures down on paper so that everybody understands them. And not that you weren't before, but professionalizing the enterprise at a level that you hadn't quite been.

Ray Evans: And I think, too, and I totally over- or underestimated this, you can have your weekly staff meeting and have it be in-depth and detailed. But a lot of times your team and a lot of the operations folks don't know your process in front of a client, don't know what you say in meeting two versus meeting one. Don't know what you say at the strategic review meeting. Don't know what materials you use and why. And so, having to go through that with the Pareto consultant and doing it as a team on a weekly basis, they got a much better understanding and appreciation for what we do. And I got a better appreciation that they, maybe, I should have been more inclusive in that with them prior to this.

Will McKenna: That's great. How much tracking do you do across the different parts of your business, whether it's your efficiency, productivity, conversion rate of new clients? How much of that do you have in place and keep track of? 

Ray Evans: A lot, and we do it a lot better than we did it before. I think I mentioned to you that Commonwealth is our broker-dealer, and their practice management group is terrific. And so, they have a lot of that kind of metric measurement sort of built in. So, we can steal that pretty easily from our dashboard. And being able to put that in a format that everybody can see at a weekly staff meeting is really, really, really helpful. And again, you can probably guess just being 37 years in, I mean, I had a lot of old brokerage business that needed to be, have a fresh look and needed to be updated and needed to be shown models and to see if they were an appropriate fit for a fee-based relationship. And so, we've had to do that over a period of years. And some folks stay in that setup. But there's obviously some folks who sit there and say, "Well, these are your highest conviction solutions. Let's pivot to this," and they fit.

Will McKenna: What does productivity look like for you? And how are you finding ways to be more efficient, more productive, and so on?

Ray Evans: Yeah, Monday's planning day, so staff meetings, partnership meetings with the Infinitas people, meetings with the marketing person at Infinitas. And so, I try not to have any client meetings scheduled on a Monday. I mean, obviously, other than the occasional phone call. Tuesday, Wednesday, Thursday — pretty strict regimen of appointments/online meetings, anywhere from four to seven a day, and try to have 15 a week. And then I want Friday morning to be a flex day. And if I have a couple of appointments, great, but I'm trying to be done at noon on Friday and goof around on Friday afternoons. So, I'm halfway successful at it so far.

Will McKenna: I think that's okay. 37 years in the business, I think that you're allowed some of that flexibility. You know, that's interesting. I've heard from other advisors who've tried to kind of block their days in those thematic ways, like Monday is a planning day, then a few client days and then more of a thinking day or something like that. That seems like a smart approach. Given all your experience and years in the business, when you think about lessons learned, what advice would you give, you know, call it a younger planner, that might help them accelerate their own path to success?

Ray Evans: You know, I would say that the main thing is, you know, for, since I started in '84, you've heard, man, you know, the advisor community's on their way out. There's discount brokers, and there's all kinds of ways for people to get investment advice, and you've heard this for 37 years. And the reality is, people want a conversation, and they want to be able to unload, particularly when they have anxiety that is financially driven. Whether it's bear markets, whether it's, “I'm buying my first house.” Whether it's, “What do I do about taking care of mom and dad?” You know, whatever those are, they want to have a conversation. And they want to have a conversation with somebody who has some experience with that kind of stuff. So, I would say that there is a need for the advisory community continually to reach out verbally or face-to-face. 

It is so easy, I catch myself in it, you know, communicating electronically. Somebody sends you an email and says, you know, “Did my TIPS come due?” and you know, “What was, you know, how did that work for me?” Or whatever. I mean, I tend to immediately email them back. I'm like, wait a minute, this is an opportunity to touch this guy. And I think people like that, whether it's a two-minute phone call or not. I just don't think they get that very much in other walks of life. And in some cases, you have to be careful and not be a pest, but I don't want to pass up opportunities for that. 

And so, I would say more direct communication, whether it's verbal or face-to-face, is really helpful. I mean, I think we all have Zoom fatigue after a year of this. But it's way more fun seeing you and talking to you than just talking to you on the phone. I can't think of many businesses that allow you to honestly help people in something that stressful. And allows you to, at the same time, develop, you know, pretty tight relationships with people where they ultimately become friends. And at the same time, it's a business where if you're not a good fit for somebody, and you don't get along with somebody, it's not very difficult to say, "You know what? We probably aren't a very good mix. You might be better served to work with someone else. And I've got someone that I could introduce you to." Because life's too short. And in this business, you can work with people you like, and I just think that's such a great deal.

Will McKenna: Well, that's great. What a great place to end. Ray Evans, thank you so much for joining the PracticeLab podcast.

Ray Evans: Well, thank you. A lot of fun.

Will McKenna: OK, so that wraps up this episode of the PracticeLab podcast. 

Special thanks to Ray Evans for coming on the show. And thanks also to my colleague Jason Young for connecting me with Ray. 

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