Subscribe
Share
Share
Embed
In this episode of Profit & Practice, host Max Holvik speaks with Nathan Parkhouse, founder of Nathan Parkhouse Advisory, who spent 25 years in wealth management, including 20 years building his own practice before restructuring it to run beyond him and selling it at 4.25 times revenue. Nathan explains why structure, not just assets or revenue, shaped his outcome, and why he turned down a higher offer because the fit was wrong. He breaks down how an owner’s “open door policy” and ego keep a practice stuck, how to build a “trust handoff” in front of clients, where delegating a task ends and transferring real authority begins, and what an owner’s calendar reveals about the health of the firm.
Nathan Parkhouse is the founder of Nathan Parkhouse Advisory. After selling his own practice and receiving seven offers, he now works with advisory firm owners across Canada and the United States, helping them build the structure and capacity to grow past what one owner can personally do.
In this episode, we cover:
· Why Structure Drives Valuation
· Why Fit Can Matter More Than the Highest Offer
· What Buyers Really Want to Know Beyond the Spreadsheet
· Three Ways a Practice Gets Stuck at Its Owner
· The “Trust Handoff”: Why Every Meeting Needs a Second Chair
· Delegating a Task vs. Transferring Real Authority
· Moving From Owner-Held to Firm-Held Relationships
· What Your Calendar Says About Your Firm
· Why Nathan Would Build a Trusted Number Three
Connect with Nathan
Every episode closes with the same question: what's the best piece of financial advice Nathan has ever received? Listen to find out.
Connect with the Show:
Profit & Practice is hosted by Max Holvik, founder of The Advisor's CFO, a fractional CFO practice for wealth management firms.
Creators and Guests
What is Profit & Practice?
Profit & Practice explores the business decisions that determine whether a wealth management firm thrives or struggles. Hosted by Max Holvik, CFA, a fractional CFO known as The Advisor's CFO, the show features conversations with RIA owners, operations leaders, M&A advisors, and the consultants and specialists helping advisory firms grow. If you run, manage, or advise a wealth management practice, this show is built for you.
Nathan Parkhouse (00:01)
You are truly running a practice that if you don't show up, then it just doesn't run because you don't have anybody internally that can make decisions on their own.
ideally you would have two hours of dedicated business building time where your door is shut, the phone is not on, you're not check checking your texts.
It's literally just dedicated to business building.
Trust handoffs, all these things. You don't redesign your calendar in one day. You don't build client handoff, trust handoff in one day. It's slow time compounding, making the adjustments accordingly and sticking to it.
Max Holvik, CFA (00:51)
Welcome to Profit and Practice. I'm excited to introduce today's special guest, Nathan Parkouse, founder of Nathan Parkhouse Advisory. Nathan spent 25 years in wealth management, 20 of them building his own practice before restructuring it to run beyond him and selling it at four point twenty five times revenue, well above the typical two and a half to three and a half multiple.
He received seven offers on that sale, and today he works with advisory firm owners across Canada and United States, helping them build the structure and capacity to grow past what one owner can personally do. With that in mind, please welcome Nathan Parkaus.
Nathan Parkhouse (01:29)
Thank you, Max. Thank you for having me.
Max Holvik, CFA (01:31)
It's pleasure to have you. you sold at four point twenty five times revenue well above the norm. What made the difference?
Nathan Parkhouse (01:39)
Structure. Structure makes a difference. When you're the only person that every client expects to hear from at all times, the you you're running a practice and it's running through you. You'll never get a break, you'll burn out. When you have team members that your clients see that you entrust.
So they actually see that trust handoff happen when your staff are actually answering questions. Number one, the only way for that to actually happen is if you take them to a meeting. And so what the difference between a practitioner and and an operator is bringing another team member to each and every meeting, ideally from the first initial prospecting point onwards. And when you get to that point, then clients actually start seeing your staff answer questions directly. and they see that trust off.
Handoff that trust handoff is you as the operator in trusting your staff right in front of your client. When your client sees that, it's magical. Absolute magic. And I'll add one other thing. Think about it from a client's perspective. When a client sees, number one, that you have the ability from an operating perspective in running a business that you have built in a program that you are bringing a team member. It could be a senior advisor, junior advisor.
executive assistants, it could be even an unlicensed assistant, or somebody you're training that you're bringing on, you know, with their permission, obviously. But when they see that, they see you're operating a real business. Number two, just from a just from a personal feeling, put yourself in that client's shoes, you bring someone else
You are both on the call with your client. That shows you care. There is other than maybe once in a while, extremely personal calls where a client wants to talk with you. Other than that, just you alone to you know talk about something very, very deep. 99% of the time, you bring that second person, you have a second chair, you that your client sees that you're in trust of them to answer questions and go back and forth. They're towing the party line, et cetera.
That makes your client feel fantastic. Such a great feeling.
Max Holvik, CFA (03:34)
Thank
you. That's that's great insight. and I think needless to say, from a acquisition perspective, a lot of the risks that that I I keep talking about, and I'm sure you do as well, goes back down to dependency on owner and and what happens with the owner steps the way. So thank you for giving some additional context there. And to sort of to stay on this topic a little bit bit longer,
You also turned down an offer at four point seventy-five times revenue. why wasn't that the the best offer to take?
Nathan Parkhouse (04:01)
great question. It was very interesting. In the same way as in running a an advisory business, there has to be a two-way street fit. And everything isn't just about the money. When it comes down to it, when you're when you're running a you're running a practice, we get into the business because we like helping people. And when we get out of the business for the most part, most of us want to make sure that our legacy is continued on.
And part of that legacy is continuity for the clients. And nobody's expected to be in business forever. and so when when we ultimately make a transition, and this isn't just when you're selling your practice. Most of the people I work with are actually in are are in growth mode. I'm generally work mostly with people who are really in super growth mode. and so there's there are transitions that happen, and and when I went to sell my practice,
Just because I had an offer at a certain multiple, as an operator, it was very important to make sure there was going to be a fit from a personality perspective. There wasn't with that particular buyer. That's okay. That is life. it wasn't gonna work. And frankly, I I went back and actually told the the gentleman, I just don't think there's a fit. it'll be impossible for you to retain 40% of the clientele.
For for two reasons, one each way, right? He actually agreed. and so we left on on very good terms. The same applies in while you're operating your practice, your business in growth mode. We have to feel out that the person you're bringing in from a team member perspective is going to be a really good fit for your clients. and that really comes down to psychographic, demographic, but even individually.
When you're making a transition within your business where you're bringing on somebody else that is going to become quote unquote the lead advisor, if you're doing it that way and traditionally a lot of people do when they're when they're scaling and growing
Just be very careful, just be very open to being flexible. If somebody needs a couple extra meetings from that perspective where you're involved, think about that and see where that works for your involvement. If you just kind of shove it, and that's from the client's perspective, it's not gonna work. You might have 50, 60% of them stick, but the ideally you'd want 99% of it to stick, right? So it's very careful. It's it's it's a feel-out process.
Using your head and and and being human about it and putting yourself in the in the shoes of the other side, your client.
Max Holvik, CFA (06:24)
Right,
thank you. And and and looking back at the whole process
as a whole, what what were the top things that that you saw buyers value the most?
Nathan Parkhouse (06:32)
Well it's interesting. Most buyers will come in and say, you know, it's generally the same, I'm rounding three or four questions. What are your assets under management? What's your recurring revenue? What what if anything, if you're not on a fee based only practice, what other types of revenue do you have?
from experience for you know the seven offers, four of those offers ask deeper questions, which was tell me about and these are initials well, but tell me about, you know, break it down from a top end and not just an Excel spreadsheet version. You've segmented, et cetera, et cetera, but there's the human side to it, right?
Tell me about, your best five clients. Tell me about your worst five clients. Tell me about where you really fit in perspective. Tell me where those links go. So those are the the those are more the I don't want to say anecdotal, but the touchy-feely side of it becomes very important when we're dealing in a very, very personal, business where we're dealing with people in one of their most important relationships they're ever going to have, which is.
We're helping them create a legacy, protecting their family and create a legacy, et cetera, and be able to live their lives the way they want to. It's very important when you're buying a practice because that's something that comes across all the time. I'm I'm imagining you have that all the time, but acquisition is is obviously one of the one of the top ways to grow. And so if you're in acquiring mode, you want to get into those soft questions. and it isn't just about analyzing a balance sheet, it's talking to the operator that.
that might that you might be succeeding and and finding out where are the real fits, where did they where were the parts of their business that they loved? And in fact they're not they're they're gonna be a you know, a little bit sad about when they're when they've retired or moved on.
Max Holvik, CFA (08:12)
Yeah, it's important I think to always remember we're in the people business, we're not selling factories here that can easily be changed in different ways that you may not be able to do in the people business. which brings me on to the aspect of of moving away from the owner. you talk about three ways that a practice gets stuck at its owner. can you please share a little bit more about what these three things are?
Nathan Parkhouse (08:33)
Yeah, so one of the things about people in in sales in general is business owners in general, and I'll just be generic about it, is we can come across with you know pretty big eagles. If you've built something from scratch, if you've adopted something and and and built it exponentially, it it's it's kind it's very natural as a human to to have
I can do this on my I've been there before I I know how to do this. Oddly enough or comically enough, but in the advisory space, and I I have been massively guilty of this myself. Take take our our take us an advisor. It's worse. We're worse. We're we're way worse. We're right at the top of the scale. We're dealing with a lot of A-type personalities, etc. Right. So one of the first things that happens, which is counterintuitive.
you know from what what kind of prevents our our our our businesses from growing is we tend to counteract that by having an open door policy. So that open door policy is when clients call, we're answering the phone all the time. even if somebody else answers it, we we get to the answer right away without thinking about is this important enough to answer right away? Can this wait, etc. This happens with our clients.
and as we grow our practice and more of our our staff are dealing with our clients, this now becomes as we're going to practice from a team member perspective, we have that same open door policy often from day one with our team. but we actually are shooting ourselves in the foot by having the open door policy because we're doing two things in unintentionally. From a very good place, we want to help people solve their problems.
And do it as quickly and as urgently as possible. From the flip side, though, if you think about it from your client's perspective and you think from your team members' perspective, if your client is used to getting access to you at every single moment, why do they really hire you in the first place? And why do they continue to work with you? Part of the reason is they're entrusting you with your level of expertise from experience. And
Better for your client, better for your business is to actually continue going on and dealing with more and more people where the problems you can start, you're dealing with the same types of problems where a client may not see that, and now you've just dealt with 15 other people over the last year that have that similar problem, you've now become real subject matter expert on something through real life. The same applies to your staff. If your staff is not empowered to be able to answer questions on their own.
To operate for a few hours without coming to to Nathan every time, then they're not building in that level of trust. And your clients see that again. It sort of harkens back to what I said at the outset. And it's just a big, a big circle. So generally the first thing ends up being by being overly kind, by being overly empathetic unintentionally, and having an open door policy, and everything, and then the secondary goes with the ego, where everything runs through you.
you you are not empowering a scalable business. You are truly running a practice that if you don't show up, then it just doesn't run because you don't have anybody internally that can make decisions on their own. You don't have externally your your clients that can expect and be pr and be happy with getting a a more a more immediate answer from your staff. So I find that there are two other things, but I I just want to circle back to that or or put it back to you.
To to follow from there, Max. do you see that at all in the practices you're running? You're helping out?
Max Holvik, CFA (11:56)
I do.
and to your point, I think it often comes from a place of wanting to help. but you become the bottleneck and and obviously you're not able to scale the business, nor are you able to help as many people. And I think what's somewhat unusual in the wealth management business too is that there's often big market movements that is when a lot of people need your help at the same time.
Nathan Parkhouse (12:18)
Well, a hundred percent. And and you hit the nail on the head from a timing perspective. Right now, there's just boatloads of volatility in the market, but the market generally's been pretty darn good. We haven't had a real crisis since two thousand two was its own animal, but the but the big one, I've been in the business for twenty five years. going in backwards, the biggest ones were obviously COVID, where that that was nothing but talking with clients the whole time and
Max Holvik, CFA (12:40)
Even bigger than
all eight or nine you would say or
Nathan Parkhouse (12:42)
totally different.
no, the global financial crisis was it was brutal. COVID was more people got frozen in space and didn't know what to do.
That was very different. That was nobody, you know, we can't leave the house. The global financial crisis was the world is imploding and it'll never get any better. None of these things are actually ever true, as it turns out. Right? 2000, 2001, I started the industry in 2000 and the and the tech bubble burst.
That was what it felt like unseen before because we had had a a basically, other than some crises in between which weren't as big as those, but we had a basically a a decade, a ten a a 10 year run. We're kinda on one of those right now. So w one of the things you just mentioned is interesting. The time to prepare, in advance for an eventual reality of a fire is you know, to put is to be prepped for it well, well in advance. Have a plan, etc.
That goes down to setting up setting up your team right now. So I'm gonna circle back. The three things are are we're trying to help people. So what happens is decision delays. And that was really the first one. The decisions are delayed because if you're in a meeting, you can't answer a question outside of the meeting because you haven't empowered, right? And and so that circles back into the trust handoff. And the trust handoff is done slowly, methodically over time.
As I said, ideally if you if you have a a a second staff member in every single relatively real interaction, I don't mean as somebody making a phone call, but a prospect meeting, client meeting reviews, et cetera, you also have that person that came to the meeting. Your your client is at this point expecting for the the number two that was in your whoever the number two might be, whether that's a second chair, your key number two, an assistant, et cetera, they're expecting the follow up actually to come from them.
You've set that up. So you've built that in. And and then the third thing ends up being the the the bottleneck ends up being, well, we have a limited amount of time. As a theme of all of the advisors I'm working with whom are in growth mode. Growth mode advisors, you range. You could be twenty two years old. and I'm seeing a really interesting trend about younger people coming into the industry right now, which is really cool. I love it.
you could be 35, maybe just starting your family. You could be 45. and you have three kids that are a single-digit age. All of these, as you get through it, is we're all limited in in time. And if the first two aren't set up properly, right, which is decision delays and that trust handoff, you to your staff, where your your clients see you doing it with your staff.
then you run into prospecting capacity problems. And the first thing to go ends up being working on the on the growing the business. This is what happens. It goes out the window.
You will hit a point where you your business doesn't grow and and we see it from a different way. We don't see it like that. We look at it and say, Well, it's been 18 months. How come my business hasn't grown by the twenty or twenty five percent I was doing annually? Well, we don't really cut it that way. We also cut it back to my yearly I didn't make the quarterlies we didn't make. How come we only have one or two, if any, prospects in the pipeline? More importantly, ideal client prospects.
right. And so and it and it's it all starts with just that that level of consistency. the best growing businesses are operating where the lead is forty percent minimum of their calendar.
Right. And and when you get busier and busier and busier, you're we're gonna go from sixty hours a week to eighty hours a week. No, you're you're we're getting married, we're having children, we're work life balance, very important. and we're all seeing that more so than we did, you know, back when we were young growing up. so you're not there's the time capacity is more how do we do it more within the time capacity? And it starts with you know the first two things I mentioned, which is
empowering your staff to make decisions, making sure they can get to your clients more quicker and your clients being happy to have the answer things answered more quickly.
Max Holvik, CFA (16:31)
And
I wonder if if if that explains part of the the relatively low two percent organic growth that we see in the industry. And and I do I do actually believe a lot of advisory firms think they have a a bigger growth than they actually do because it's hidden by the the great market that we've had the last, fifteen plus years or so. what's your thought on that?
Nathan Parkhouse (16:51)
Well, most of us don't separate out the underlying asset growth from right. Most of us will look at, okay, I went from 100 million to 120 million, I grew by 20%. Cool. But the market was up 18 or 25 of it. I totally agree with you. That's very interesting. The here's where I see it. Again, it's it's I I find the easiest thing is I was talking about putting yourself in your client's shoes. I I find the easiest thing is
When we think about how as humans we go about, when we think about how we go about thinking, most of us don't do that. It this takes time to actually step back. so if you're i I hear this all the time. one of the things I say you know, one of the questions I I ask is how many of your top 20 clients, how many of those relationships how many times has
A staff member of yours, a team member, run a meeting, one of those top 20 client meetings from start to finish? Well, generally the answer is always going to be zero. Not always. Super scaled businesses have gotten to that answer, is right. Okay, but shouldn't shouldn't that be the goal that it can happen? Okay, that's a bit of a large, you know, that's a mount of risk to climb when I'm
My mine don't even go into a meeting. Okay. The reason I ask that question is I often ask advisors. So when because I hear the I hear before I ask that question, I often hear my staff does everything. Okay. What does that mean? How many of those meetings have they run? Zero. How many meetings at all have they run top to bottom? Oftentimes zero. Very few. How many meetings have they been into? Again, very few, et cetera. Depending on where you are in your practice.
Right? What what what how deep you are into into your into running your business. So you're not so when you say as an advisor, and you might have five staff members, and you're telling me that your your your staff does everything other than okay, nope, Nathan, no, they do everything, but they they don't run those meetings. I do those. Hey, totally get that. The disconnect there is
your clients do not see your staff doing all the work your staff does. You do, which is great, but that's one of the two components. Your clients need to see that. Otherwise you'll keep running into this lack of trust handoff.
Max Holvik, CFA (19:06)
I
I'm sensing a bit of nuance here. what do you so what's really the difference between delegating a task and transferring real authority? Where does that line go?
Nathan Parkhouse (19:16)
So I guess the easiest thing to to there's no perfect answer to that. and there's definitely gray area and every practice and every business is different. but delegating a task is saying here at an administrative level, right? If you can delegate a task and have a staff member that can run, this may seem crazy, but if you w when you get to a level where you you have a c you have a staff member, you have a team member obviously licensed that can do a KYC meeting and you're comfortable with that.
Here's one of the things I find. A lot of people, and this is at one level here, maybe earlier stage, but one of the things the the mistake there is having your licensed staff member do that KYC meeting or an insurance policy meeting that you've already sold and you're ready go without you being there.
Here's what's invariably going to happen. Your client is going to test, consciously or subconsciously, your client is going to ask questions. And if that staff member is there left on their own to sink or swim, and you're not there to make sure they're towing the party line, continuing on with what you've actually said, answering questions, and not just, you know, or or freezing or whatever the case may be, you haven't, there's no, there's no lessons learned either. There's no leadership there from that perspective. And you may or may not lose a client.
That's not the way to do it. You need to supervise. The same applies at a higher level. let's say you're running a let's say you're running a practice and you have you know, two other members whom are licensed and actually at least one of them is actually bringing in business on their own, right? you have your top 10 clients, that trust handoff is you've established that's your number two. You've established that the that's your your number your third chair. in an ideal world, we want to get to a point where the number two and number three can lead.
Can lead that meeting all without you being involved, and your clients are super comfortable about it. To get to that stage goes back to that foundational aspect of supervisory, viewing, et cetera, and doing it together because there are three parties involved you, the advice, the lead, the lead, the owner, your staff member, and your clients. And so tying those things in over time is is what happens. But once you can actually have other staff leading,
You now free up more of your capacity to go in and and concentrate in in an ideal client pro areas, et cetera, and and drive more business.
Max Holvik, CFA (21:24)
Thank
you. And I I wanna tie this back to, you know, what you talked about on the sale and the successful sale as well. So it seems by doing this now you're moving from having owner held relationships to to firm held relationships. what do you see that are are may go wrong in that regard, especially if you if you do it too fast?
Nathan Parkhouse (21:46)
Yeah, I the it's it's it's the pace of play. The pace of play. You have to have a plan. and that's what I help people do. What what I help people is develop that plan, right? We're redesigning your practice into a fully operating, fully scalable business. you may never have been trained to be an operator, you may never have been trained to lead people, let alone hire them and manage them in between, but we can get there.
We can do that together. We do it over time with a redesign. and the key is develop it, it's developing the relationship with your staff member in front of your client. That is the key. The key is having them shadow you for behind the scenes work, having them shadow you slowly but surely. and the beginning is just you're in you're making an introduction.
If your client gets an email that says, Hi, I'm I'm Max. I work with Nathan, or or vice versa, whatever it is, please you know set up a meeting in my calendar. Here's what actually happens in real life: your client goes back to you and says, Is this a real email? Especially in the world we live with, fraud. Right? There's no handoff that. I see that all the time. Right? It's go back to thinking, how would you like to be?
introduced to a new staff member at Max's business. I would like Max to be there to personally introduce me. So there's that natural, handoff because I've entrusted you, Max, to run my money for the last 10 years. I know you're great. That's fantastic. And now you're bringing in Nathan who nobody's ever heard of. that needs to happen naturally in a normal human way.
The the only way they're going to be really good and you don't really I don't think most of us want to clone ourselves. What we really want is people to compliment
in the spaces that where we that we don't love or that we're not really good off or the person that's if we've moved on and we have a bit more sophisticated clientele training somebody on to work with that. So this is a people business. It's very important. We do this with a trust that's why we call it a client handoff, trust handoff. It's meant to be a slow progressive kind of system.
Max Holvik, CFA (23:51)
That makes sense. And I I imagine the timeline is different probably from firm to firm, but also from client to client because of the the people factor, right?
Nathan Parkhouse (24:00)
Yeah, well, 100%. It's it if you're you're hiring your first person, or if you're hiring your first senior advisor, or where even further, where you have your your your pod of three to four, where you are the senior, you have a junior, the junior's getting up to senior, you working enough, and then you're gonna split into another pod. Like these are the the kind of layers. you want it it's it's done progressively, it's done methodically.
it's done naturally. So by natural I mean where you're you can see those fifty clients really get along with and and and trust, you know, that's where you're gonna establish so it it it's doing it like that. What what are I'll flip the script if you don't mind. you know, you're you're hosting a podcast. You probably don't get asked very many questions yourself, I'm guessing.
So you're going you're hired outs you're hired to work fractionally as a fractional CFO, right? are you simply being this is one of the things that most of us as advisors is we're practitioners. We started by ourselves, knocking on doors, talking to our best friends and everything. Most of us were never trained operationally. You are dealing at the operational level. How are the most successful
Handoffs internally happening when you come in.
Max Holvik, CFA (25:14)
Obviously making sure the firm is as little dependent on the owner as possible. there's I like this saying that the the the less depends on the owner, the greater value of the firm. but also the the greater sustainability of the firm. So being able to to yeah, basically remove owner dependency, which is a lot to it as as as you know. Anything from making sure you build a a management bench that can that can step in and take the different hats that you're wearing. 'Cause when you
When you started the firm, if it's only one founder or or just a few partners, they you you tend to wear a lot of different hats. But then as the firm became more and more complex and and and and bigger, each of those hats also became increasingly complex. So being able to take those off and going back to your your your points on on on
not only delegating but actually transferring real authority, now you're stepping away. And I have one one client who's been really good at at at building a an amazing management bench and pro firm wouldn't probably notice if if if he's gone tomorrow. Obviously from a personal perspective they would, but the firm would continue to to do well and he's then able to scale the business. I mean we could talk about this for hours and hours, but but
It's basically removing the the dependency on the owner. And and I think a lot of it has to do with most advisors want to help. So that's to your point. They have that open door policy, but it hits a point where that open door policy works against you and it also hurts your clients. and and maybe a little bit of ego as all of us owners and and and founders have, but but I think a lot of it comes from a good place.
Nathan Parkhouse (26:48)
Yeah, well, the egos are good. This is how this is why you got into the business, started your own business in the first place. It's because you have the cojones to be willing to do it, right? there's a theme in what you just said and what I've been describing, and that was that was great, which is when we're running a b a business as we're scaling, what we're doing is we're we're finding spaces for complementary team members whom
Operate in spaces either we are not because there's so many hats, either we we don't we we don't really specialize in or we aren't really great at relative to the other spots we're really good at, or what or where we just don't like. Right? So an ideal from a from a scalable business to move from a practice to a scalable business, the other way around from what you just described is.
Somebody building out a a a a larger RIA going from 500 million to five billion, the type of clients you're dealing with, it's not done overnight. It it's done relation relation relationship relationally. I'm looking for that word. I'll look I'll Google search out later. but what it's done is it's it's we wanna deal in a space where not only we're really good at, but we also love.
That is the sweet spot on how to be successful. We're gonna deal with all the parts that we're not good at and we don't love as we grow and we become more successful. We're finding those con that's why I hear a lot of people say, I want to clone myself. Do you really? Or do you not want to actually fire find somebody whom is really good and loves one of those spaces that doesn't fit your your dual mode, your dual mold, right? You wanna focus on because you'll be super successful.
where on things that you are really good at that you love doing. Then it isn't work. And that's as now you start thinking about it. It's still work, but the it doesn't feel like a chore. Now you're really this is how you're thinking creatively and proactively and it's enjoy you're looking forward to Monday morning. Right? Like and that's the biggest key that I found. That's when you when you become really successful at whatever layer, it's when you're finding complimentary people that are very good in a space that either you don't like being in or you're not good at.
Or it's not your best strength. So you can go back and concentrate. And and that's basically what I just
heard. when people are hiring you on, they're hiring you for the part that you're really strong in, where they can go on and concentrate on on the parts that they're really strong in.
Max Holvik, CFA (29:11)
I completely agree. And it reminds me of of the Dan Sullivan's A B C framework, where you divide up your your tasks in terms of yeah, what are you good at and what you like to do and what you really absolutely hate and so on. So A B C where
C
is the stuff that you you want to keep doing and and
A
are the things you absolutely do are are are dying to get off your plate. And I think by to
your point, it's it there's there's I think there's a strong correlation often between what you're good at and what you like. It's not one to one.
but being able to tap into both of those factors, I yeah. I I think that can set not only you on a whole different path, but also the firm so much more scalable.
Nathan Parkhouse (29:48)
The the real life example that us having been in the operator chair for 25 years that us advisory practice o owners deal with that is something that we deal with all the time. It's we grow when we're successful, we go beyond our capacity, which means we have more households, right, than we can service. And and part of it is if we're we're in growth mode, we're gonna continue scaling.
And that might come from organic growth. that might and I don't just mean assets under management and just revenue, I mean more households, right? If we're not constantly growing, we're gonna be net losing. So whether we're growing because we have such a great ref we have such great advocates, clients themselves are advocates of the business, that's the ideal, especially when they're they're ideal client profiles. but there's no stage in the business in the in the
without it being fully system systematized, generally we all hit a point where we don't have o nothing we don't have nothing but ideal clients. So this is where the segmenting and all that idea comes. And and the point of it is is that's the real life, which is like, well, I have I have twenty-five percent of my business. If I could get rid of it right now, I would. Do I hire somebody to work with them? Do I get rid of them? Like we hit that all the time. This is the same type of thing. In an ideal world
it would be great to get paid to help those people go to somewhere that can serve them better. That opens up your capacity. That also might actually pay you as well, which is fantastic, which also opens up the door to hire somebody back in. So it's a it's a real interesting circle. My point is if we put ourselves in the shoes of thinking, how do I really grow my business in the way I really want to, let's start eliminating as we can systematically, the spaces where
That are a drag on our business.
Max Holvik, CFA (31:34)
And I I dare to say often those clients that you you send to someone else are probably better served than they would be under you if you didn't really enjoy it or they weren't a good fit any other ways.
Nathan Parkhouse (31:45)
Agreed, because
you're you're generally doing that with somebody who's in a position where they're that is unbelievably beneficial for them to mine and learn, et cetera. Their heart's in it. When your heart's not in it and you're talking about well, I I have these clients and that you're under
Max Holvik, CFA (31:58)
It shines through. Yeah.
Nathan Parkhouse (31:59)
it shines through and you're underserving them, you're not mining it, you're not doing the best job for them. And in turn, it it's you're not optimizing revenue because you're you're not doing the best job for them.
Max Holvik, CFA (32:08)
Yeah. going on a little different path here. You you'd share something with me that I found fascinating. So I would love for you to to dig a little bit deeper into. You you mentioned that how an owner's calendar look like tells you about the structure of the firm. Can you please elaborate a little bit more on that?
Nathan Parkhouse (32:24)
Yeah, absolutely. the it it is c it kind it goes back to the the first thing that goes when you get jammed up in the day is prospecting, business building, et cetera, right? We've all gone through it. when when when we are busy because everything is going running through us, that we haven't empowered the team, we've all done it. I didn't make it to that networking event I was going to over lunch.
I didn't call. I'll go call them first thing tomorrow morning. you got a referral from whatever. and and and and that's normal. That that's a standard thing. And it's just because we're answering questions. So the the ideal structure, if I think you're talking about a bit more of that 40% that I was mentioning before. Yeah. So the key here is we we know we have to meet with clients. We know we have to meet with our staff. We know there's a certain level of admin, et cetera.
We we w C E credit. We know there's a certain amount of all this stuff. The key is that on a weekly basis, we look we we develop our calendar and we put aside time in an ideal world. Monday to Friday, it doesn't have to be the same time each day. Every week, and there are sections, it's fine, but ideally you would have two hours of dedicated business building time where your door is shut, the phone is not on, you're not check checking your texts.
It's literally just dedicated to business building. Now, I hear a lot of people will say, well, I'm doing that, et cetera. That's good. And if they actually looked at their calendar and recorded themselves for a month, that's not necessarily true. That's okay. That's human nature. We overestimate certain things. the the first fix at a simple level is dedicate 15 minutes a day to to one file where it's somebody that isn't expecting anything from you. So that's a great client that you want to emulate.
That's an amazing center of influence, an ideal referral partner, some somebody you haven't talked to in 10 years, but they love you, know you, trust you. If you did that for the next two months and just dedicated 15 minutes a day, and I'm gonna give full credit to my to my good friend Bill Utnage. This was his idea. He is a referral king, and that's how you start.
And I've had several clients engage this as their first thing when we're restructuring their calendar. By the one week later, the level of excitement from that from that advisor owner client that I'm dealing with, it even if they only talk to one of the people over the five days, it's unbelievable. It's it just changes your mindset. And what's very interesting, Max, is that was the reason most of us advisors got in the business in the first place. It's to talk to people, help them.
Where we have a level of expertise, we get away from it because we get bogged down in the daily. So it's not an easy task to do. The other thing is, and I say the second thing, and you might even do it that with the goal of the pr pr protected business building, I call it prospecting business building time. You might do it in the other order, but understanding that's the foundation is, and depending whether you have one staff, five staff, whatever the case may be, we need to get away from.
From this open door policy. a good friend of mine had a very large firm and he had the open door policy, and you could tell it was dragging. We we had a we had a bit of a discussion about it. over time he's like, okay, so many people have told me. You the fix is you go to dedicated staff member time. So you have staff member number one. they have the certain times that they need.
Throughout the week. You do it with staff number member number two, et cetera. They each know. You have a team meeting, obviously, et cetera. but the key here is when the staff member knows that it's Monday at five o'clock local time for me right now, roughly. If your staff member knows that they can they that that we're having a dedicated 20 minutes tomorrow at 11 30 a.m.
They're going to spend their time concentrating on the things they can do now. They're going to prepare, because then they'll get another phone call, another email that might come up. They're going to start making their own, because they're human decisions on what's most important in that dedicated 20 minutes, before there's another four, you four hours later, another 20-minute call with Nathan. And so you're empowering your staff to make decisions, right? Your staff are adults. Let them operate like adults.
And and so you end up forming. And so to me that the calendar starts building towards that. And the more you're empowering your staff, the more the fewer things start coming to you and your calendar actually starts opening up. it seems counterintuitive. It's just what actually what happens in reality.
Max Holvik, CFA (36:49)
Fascinating, thank you. It yeah, and I imagine lots of it it it it's gonna be hard to put all of the lessons that you you've you've learned over the last twenty plus years in the industry, but I'm I'm curious to hear if you were to advise yourself on your past self ten years before your sale, what would you advise him or yourself to do based on your experience?
Nathan Parkhouse (37:10)
I had a trusted number two. I would have built out a trusted number three.
Max Holvik, CFA (37:14)
Interesting. Can you elaborate
Nathan Parkhouse (37:16)
Yeah, absolutely. So harkens back to the same thing. When you have what I was saying before about from a client perspective, when two people are going into meeting, it shows a level of business operation, it shows authority. The flip side back into your actual business itself is well when you're trusted number two is off getting married for three weeks, you want to take your three weeks off.
They're stuck as the lead. You're stuck as the lead. So what you really want to do then is you wanna have a trusted number, you want your number two to have a trusted number two. Because they're two people that can go to each other and not have to come to you for every decision. Same thing. It's just a continuity of all this. That trusted number three I d in a great space would be amazing if that was your trusted number two's number two and your number three. There's a linear line to that.
and that doesn't always work, but I'd say Nightie. It it generally it it it generally will work because there's only way that you'll have a trust number two and a number three is if you brought in the number two and they were they were part of that entire decision from the beginning.
Max Holvik, CFA (38:22)
Great, thank you. before we wrap up, I ask every guest the same question. What is the best financial advice that you have received?
Nathan Parkhouse (38:30)
It's so funny, Max. You prepped me for that in advance of this call. And it right, and these aren't easy things to answer. The best financial advice that I've received, it would be something I read when I was ten years old. Actually what got me excited about the business in the first place. My dad took me to the local we had just moved into a small town. My dad took me to the local bank. It was time, I was ten. It's time to open up a bank account.
I I I think it there was an ATM there and I'd never seen one, right? this is a while ago. and they gave me a brochure and the brochure was about compound interest. And so this would have been nineteen eighty-eight. And it talked about which would be out of scale now and large, ten percent compound interest, how that works, just year to year to year to year. And it didn't use those words because it would have gone over the top. It was meant for kids. And it talked about what was dollar cost averaging.
What if you just put in a little bit of a chunk every month? And it showed me that and it showed the growth. And I looked at that and went, that is really cool. It was the best advice I ever received. Just compound
Max Holvik, CFA (39:29)
Wow.
Nathan Parkhouse (39:30)
over time. This applies back to what we're talking about. Trust handoffs, all these things. You don't redesign your calendar in one day. You don't build client handoff, trust handoff in one day. It's slow time compounding, making the adjustments accordingly and sticking to it.
Max Holvik, CFA (39:47)
linking in the two, yeah. The eighth wonder of the world, right? According to Einstein. And thank you for
Nathan Parkhouse (39:51)
Compound interest. Yeah.
Max Holvik, CFA (39:52)
sharing. And where can people learn more about what you do?
Nathan Parkhouse (39:55)
I like to keep it simple. So Nathan Parkhouse dot com is my main website. if you've linked again, Nathan Parkouse on LinkedIn. I'm one of that I'm aware of three Nathan Parkouses in the world. I'm the one that's that clearly was an advisor, in et cetera. and if you do want to get in touch with me, just do so through my LinkedIn direct DMing would be great. I'm extremely responsive there.
Max Holvik, CFA (40:19)
Great. Thank you. And thank you for being on the show. Really appreciate it.
Nathan Parkhouse (40:22)
Thank you so much for having me, Max.
Max Holvik, CFA (40:23)
It's a pleasure.