Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

Behind The Scenes At Root: A Deep Dive Into Our Business

• Ari Taublieb, CFP®, MBA • Episode 224

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We delve into the intricate hiring process at Root Financial, exploring how we select advisors to ensure a consistent and cohesive experience for clients. Emphasizing culture, philosophy, and the importance of advisor-client relationships, we highlight our commitment to developing a thriving team committed to serving clients optimally.

• Discussing today's episode focus on hiring culture at Root 
• Importance of consistent philosophy among advisors 
• Overview of Root University training program 
• The concept of the 'farm system' for developing advisors 
• Significance of cultural fit during hiring 
• Role-play assessments to gauge advisor capabilities 
• Insights into advisor-client dynamics at Root 
• Commitment to continuous improvement and learning 
• Anticipating future discussions on what sets Root apart

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Ari Taublieb, CFP ®, MBA is the Vice President of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.

Speaker 1:

Hey James, hey Ari, Today is going to be a fun episode and it's going to sound weird to hear this because you're a humble guy, but a lot of people are reaching out to work at Root because of what they're hearing from you on the YouTube channel, on the podcast. Similarly, people are reaching out enjoying the type of content I'm putting out, and so a lot of you are wondering if I work with Root, do I get James one-on-one and is he going to show up to my Christmas party or is Ari going to come? And the answer is we're involved. But what we want to show today is how do we select the advisors that work at Root and what's the vibe and are you going to get the same philosophy? Does that differ from one advisor to the next? It's going to be fun.

Speaker 2:

It's going to be fun, and usually our videos are about some educational topic tax strategies, investing, retirement, whatever and today's a little bit more of a sneak peek behind the scenes at how do we do what we do at Root. How do we design things on purpose to be different? How do we design systems and structures that are designed to optimize the success of people internally and the clients we're fortunate enough to serve externally? So if you're listening and saying, hey, I'm looking for a Roth conversion strategies awesome. We have lots of those videos and we'll redirect you elsewhere to those. But if you're listening, it's like, yeah, I'm kind of curious about what happens at root and how are you growing and doing things intentionally. We'll talk a lot about that today and probably over the next couple of few episodes even.

Speaker 1:

Yeah. So I want to get into how do we even hire advisors? How do we find them, how do they find us? But before that, the process at root, does every advisor just guess? Is there like a program? How does that work?

Speaker 2:

Yeah, we ran it. This was something we put a lot of work into, because we do a lot of videos, we do a lot of podcasts. There's a very clear message that we talk about, which is, you know, to put it simply, how do you connect money with kind of your life's purpose, with what you want to actually accomplish and use your money? Get the most out of life with your money? That being said, there's a ton of incredible advisors in this industry that have a different approach, that have a different philosophy, that have a different way of doing things, and there's no problem with that. Where there is a problem is when people say, hey, James, that message resonated. Or hey, Ari, that message resonated, I want an advisor that takes that approach. Well, the problem would be if there's an advisor at root that is not on the same page in terms of the same ethos, the same approach, the same way of viewing money and the role it plays in our lives. And so we said we do need to create something where there's consistency, you know where, regardless of who someone is working with. For people who are listening, who aren't aware, we have a financial planning company called Root Financial. So that's, if you're confused, that's what we're talking about. And when people come to Root financial saying, hey, the strategies you talk about, these are, this is awesome, this is how I want to approach my planning, this is how I want to approach my life. I want an advisor to do that with me. Well, if we have 10 of the best advisors in the industry, but all 10 have very different ways of doing this 10 different investment philosophies, 10 different tax planning philosophies, 10 different life philosophies there's not going to be that congruence that you're looking for. There's going to be a disconnect between what you resonated with and what you thought you were going to get to what you're actually getting. So we invested really heavily and by investing with time, with money, with resources, with people, to say how do we build out a structure, a training program we call it Root University and what it is today it's going to become far more robust even as we continue developing it to say, when you're running a meeting at root whether anything from a kickoff meeting to an investment meeting, to a tax planning meeting what's the goal? You know, what are we trying to do there? How do we run that? How do we prepare for that? How do we follow up from that. How does that connect to the next meeting that we're going to do? How is investing a lot into what is the actual process? You know after working with so many hundreds of different people what's the right way to do things Almost like the foundational piece first, like the.

Speaker 2:

You know there's a Maslow's hierarchy of needs. It's almost like the hierarchy of financial planning when do you start? Then, once that foundation is there, where do you go next, and then what, and then what, and Then, once that foundation is there, where do you go next, and then what, and then what, and how is everything interconnected and how do you do things on an ongoing basis? And there's so much I'm excited to even add on to that. But it's a process that we say look, if you're an advisor at Root, we're hiring you because you're the best at what you do and here's how Root does it. And we need to ensure there's that consistency of experience so that people get that, regardless of which specific advisor all of whom are incredibly talented but getting the same consistent experience, same consistent philosophy across the board.

Speaker 1:

I think we should do 30 minutes on Root University, which might be one of the future episodes. Let's talk about how you actually hire these advisors. And you're in that more than I am, james, because I'm often speaking to those of you that are reaching out who are asking me, and Jay, who's our client success manager here at Root. That's who you talk to when you reach out for that first conversation and you're saying, hey, do you guys outsource it to ZipRecruiter or like Monstercom or Indeed, like how do you actually find these advisors and who's actually talking to them? Is it you? Is it James? How does that work?

Speaker 2:

I think hiring is one of the things I am most involved with at this point. No, we don't outsource any of that and you know, like this, there's a few things here. One is you know, the same way that Root grows in terms of adding new clients is primarily through through. Let us put out into the world the work that we're doing via YouTube videos, via podcasts, via the digital stuff. This is how we do it, and 99% of you take this and do it on your own, do it for free. That's great, but those of you that are looking for an advisor to do it with, those are the people that are coming in and saying we want to work with Root and we love working with them. Same thing now, kind of on the industry side.

Speaker 2:

I think people see, oh, there's some cool things happening at Root. There's a fun group of people at Root. I'm really good at what I do. I want to do it with other people who are really good at what they do, to constantly get better, to constantly develop, and so there's this inbound interest from, I think, the industry. In the same way, there is this inbound interest from prospective clients who want to work with root, which is great. You know, we don't have to go hire headhunters. We don't have to go hire people to say, hey, go, try to like, find us people, we're desperate for people. We have so many. I mean, the hard part is we have to say no to so many qualified, talented advisors that I'm like I would love for you to be at root. We just we have this abundance of really incredible people and we can only select a limited few. So philosophically or I guess that's one thing to note is we have a lot of inbound interest, which is wonderful.

Speaker 2:

But then, number two, I think, with hiring, the ideal model is we want to hire someone in more of what we might call like an associate level. Where he come in, we need to know that you have a capacity to learn. We need to know that your character, your values, your integrity, what you value in life, where you want to be with your career that needs to align with root. But in terms of, like, technical proficiency, we don't need you to be there yet. We want to develop you. We want to develop you the way that we think planning should be done. We want you to come here and just have so much incredible development over your first couple few years and then organically become that lead advisor that's working with clients. That's working with clients. That being said, we have a lot. One of our biggest challenges right now is we have way more people reaching out people being prospective clients reaching out to work with us than we can possibly work with. We just don't have the advisor bandwidth to take on everyone. That comes to root today. So we can't just say, okay, well, we're going to hire a whole bunch of incredibly talented associate advisors today and over the next two, three. Well, we're going to hire a whole bunch of incredibly talented associate advisors today and over the next two, three, four years, we're going to develop them to the point that they're just going to be the best of the best lead advisors in the industry.

Speaker 2:

For people listening, lead advisor means like the person who's actually leading the relationship, who's owning the relationship, who's giving the advice. Associate is sitting in those meetings doing a lot of the financial planning projections. It's almost like an apprenticeship. They're doing a lot of really valuable work more so behind the scenes than even in the meetings specifically, which is supporting the relationship, supporting the advisor. But it's also to develop them, and so the ideal model is I relate it to baseball a lot. In baseball, you try to develop what's called a great farm system. You draft somebody, they go to minor league triple A, double A, single A and you coach them, you develop them, you work on their skills and so one day they enter the big leagues and they're an all-star. That's the dream. That's what we want to do.

Speaker 2:

We're at this point that we need some free agents of hey, yes, we're going to develop those people over two, three, four year runway. We also need some great advisors today to step in and, yes, we're going to develop those people over two, three, four year runway. We also need some great advisors today to step in and, yes, with training, yes, going over our systems, yes, going through root, universal and all that stuff. But in a more immediate way, step in and start working with some of the clients that we have. Because there's so many people reaching out, the interview process for that lead advisor coming in is far more stringent. It's way more difficult to get through and I shouldn't say it that way, because even for associates, we have way more people apply than can actually get in.

Speaker 2:

But for a lead advisor, for example, we have an interview that's about where do you want to be? Talk to career aspirations, goals, vision, what do you value? Say this just philosophically do we align? There's kind of a cultural interview of it's really important for us to enjoy the work that we get to do. We want this. We want to optimize our fun in a lot of ways. A part of fun is doing really great work with great people around you. Part of fun is saying I feel really good about the value we're providing to clients. Part of fun is saying we're feel really good about the value we're providing to clients. Part of fun is saying we're doing something in a way that's different and is the only way that I would ever want, uh, my financials or my parents' financials or those I care about, to ever be missed. So there's that kind of cultural fit interview.

Speaker 2:

This is this person, someone that we would look forward to spending time with at a team retreat, someone that we would look forward to doing great work with. And then another big part of the interview for someone coming in as lead is like a skills assessment where I personally will role play with them, and it's a little uncomfortable at times because it's it's I send a prompt and I'm I'm, I'm a prospect. Hey, ari, here's my stuff and I don't give you much of a what I'm going to ask in the meeting. But we role play and I say, hey, ari, and I ask hard questions and when you say something that's not right, I, I, I keep asking, keep asking, keep asking.

Speaker 2:

Really, to us, a sign of a great advisor is someone that doesn't need software to deliver excellent financial advice. Anyone can put stuff into software and say, oh, the software says this, the software says retire the software. Well, anyone can do that. I need an advisor that understands the ins and the outs of withdrawal strategies, of why we invest the way we do, of where and how to prioritize different tax strategies, and so I ask pretty hard hitting questions around that to see could you step in and pretty quickly start delivering the types of solutions, the type of advice, that we deliver to clients? So that's for a lead advisor. Sorry, I'm jumping around a whole bit here.

Speaker 2:

For associates it's far more looking at. Do you have the capacity to learn? Do you have the ability to learn? How well organized are you? What's your communication? So all things that we look at for lead advisors we're not screening as heavily for it. Could you be an awesome advisors today. We're not expecting that. It's more of could we see you developing into that all-star and we want to draft you and get you into the farm system single a, double a triple a for people, again using the baseball analogy and then one day, yeah, you're called up and you're an all-star and it works out super organically. So I am heavily involved. There's no one that's joined that I haven't been part of the interview process with and that's going to continue, as I'm very heavily involved because right now the biggest thing is we get the right people on the team to help do the work that we're doing.

Speaker 1:

Amazing, like now, the biggest thing is we get the right people on the team to help do the work that we're doing. I want to talk about culture, because that's a big part of what's going on, but I want to tell everyone a quick small story about when James was essentially doing the role playing with me and I remember being nervous for this, and James and I were role playing and James said hey, ari, how often would you rebalance? And I remember I was studying I think I was in grad school at the time and they said you should rebalance quarterly. History shows that's what's most effective. And I said okay, book says that I'll do that. I'm going to rebalance quarterly.

Speaker 1:

And then James asked me sorry, how often would you rebalance in this situation? And I was like I slam dunk here quarterly. He goes, assume markets don't change at all. What would you do? I'm like uh, quarterly. He goes, assume markets are super volatile in one week and your whole allocation is completely out of whack. What would you do? I go, uh, quarterly. And so he didn't say anything other than make me realize what I just said was so incorrect, because it's not logical in any capacity to not rebalance when markets are being volatile and then if markets never changed which is unrealistic but if that, why would you rebalance? There'd be nothing to do. So it's if you use a software, it might say rebalance quarterly, rebalance monthly. We need to be more dynamic than that.

Speaker 2:

There's a say I don't know if it's an actual saying we kind of made it up, but I remember talking to Scott about this. The previous podcast of real financial planning begins where the textbook answer ends. Anyone can read a textbook. Anyone can pass a certified financial planner designation. I don't mean anyone says, oh, it's easy, no, it takes some work. But just because someone has a certified financial planner designation to us is like a table stakes.

Speaker 2:

Yeah, if you want to be a lead advisor at Root, you have to have that, but beyond that I don't know. There's 100,000 CFPs now. Yeah, I think that I saw a number that crossed that Great. What percentage of those would I say? Yeah, I feel comfortable with you being a representation of Root Financial and being able to deliver not just the financial guidance and advice but just the overall. You know it's such a unique position that we're in of. We have a very intimate seat at the table with our clients, in the sense that, as a financial advisor, you're talking about things that you maybe don't talk about with any other person. You're talking about dreams, hopes, challenges, spousal communication, issues, all of these things, and so, as a financial planner, you can't just know how to calculate what a Sharpe ratio is. Who cares? You've got to be able to deliver real, impactful stuff on the financial side and the life side, and we try to screen pretty heavily for that and develop pretty heavily for that as well.

Speaker 1:

In the episodes coming up, we're going to go deeper into what's the real difference between Root and other firms and why are we so passionate about this? Because a lot of people go. Why do you and James love these conversions things so much? We don't just love those. If we're smart with numbers, you can live a better life and have more time with your spouse. And good luck quantifying that.

Speaker 1:

So part of what we do and this is largely my role when someone reaches out to Rue is we have a conversation, but does it make sense to work with one another? And I will get very transparent and hard hitting and say look, what if something happens to your advisor and they're like, uh, I don't know. Like you tell me. And we'll say look, you have a few different options. You could go. I love James so much. He was the only advisor I ever want. I want no one else. I'm going to manage my money now. But you could also go. Well, james was awesome, but I'm sure there's another advisor at root that's awesome. So I'm going to stick with the route. Or you could even go deeper and say you know what? Maybe I don't know quite yet Maybe I want to be my own advisor. Maybe I do this on my own, maybe it turns out that I'm going to go to another firm, entirely like that impacts our business.

Speaker 1:

So what we really strive to do is say how do we make it so our advisors love their job, so you're not passed to the next advisor and then your advisor retires. And now you've had 30 advisors and I know that happened to my parents a lot where they really actually liked their advisor and then all of a sudden they were passed off to the next advisor and you call it or at least I call it who's Lewis? You like your advisor, it's going well. You hop into zoom one day and Lewis is there and you're like, who the heck are you? And you're like, oh, I'm your new advisor. And you're like, well, how did this happen? And so I'm sorry if anyone out there is Lewis and offended, but James, how do we make sure our advisors love their jobs?

Speaker 2:

Yeah, you know, philosophically, I think this isn't like technically a core value. I think this isn't like technically a core value, but one thing it's when a client works with us, like that has to be viewed as an enormous privilege one, but responsibility two, like someone trusting you to say, hey, I want you to help me with some of my most cherished gold, maybe the most cherished goals that I have, and my ability to provide for me. That's an incredible responsibility and it's and it's an enormous honor to have that, and so it has to be treated as such. The way that we want to work with you and serve you as your advisor. You have to take that same approach, I think, with your team and mean it wholeheartedly and with total sincerity of to me. I look around at Rube and I'm like, oh my gosh, like it is such an honor that these really talented people who could be doing this at any firm, because they're that qualified, that talented Like why do I deserve to get to work with these people? Is the mindset I have a lot of time because they're awesome. So, in the same way, we say, okay, like a client is never forced to stay with us for the rest of their life, but we're going to treat every client we have as a partnership for life from the standpoint. That's what we're going to give to the relationship. I think.

Speaker 2:

Same thing on the, the, the team member side. Uh, you know, ari, you could do this on your own. Every team member, you could do this on your own. What can I do to make it so abundantly clear that root is the best place in terms of where your talents could be best utilized, of what compensation potential could look like, of of how you can best support your family, how you can balance work, like all these things? There's no, you know, like gotchas, you know we're going to set up some trick on the front end or where you can't leave ever, but the incentive is to say, well, what could we do to make root the absolute best place to work? And for clients who are listening to this, or prospective clients listening to this, is like, oh well, that, who cares? That is, that's nothing to do with me. It's absolutely something to do with you. Who wants the? What? I forget the name. Who's Lewis, who's Louie? Who's Ben? What was the name?

Speaker 1:

You don't want that.

Speaker 2:

You don't want a round Robin of who's your advisor. We have to create a place, we have to create an environment where advisors and all of our team not even just advisors, but operational staff, compliance staff, people, sales, all that stuff I feel like I get everything I want and more at root, and I want to be here for the rest of my career. I've told the team this we take team pictures at our team events. I can't wait for 10 years. I can't wait. I don't want 10 years to pass by, but you know it's going to be fun and my hope is that 10 years from now, 20 years now, we can recreate some of those pictures, just to be like, yeah, like we grew together, we did this together, not because anyone was forced to stay here, but because we created an environment that people wanted to stay here.

Speaker 2:

And we're not perfect, like no one's. Sometimes you listen to podcasts and people sound like, oh, they got it all figured out and nothing's wrong. We're not perfect. You know that like there's things that happen, but I think anytime things happen, it's like we view it as okay. That's an opportunity to get better. How can we learn from that and get better? And you know, up until now, weot or Leave. At some point does someone as a company grow, of course, like that would be naive to think anything otherwise. But how can we design something that most people could say, yeah, I just, I want to be here until I retire.

Speaker 1:

I think the large reason for that is the advisors get to choose who they work with and we don't say you have to work with this person, here's how many clients we want the advisor to go. When I see James's name on my calendar, I'm excited for that meeting, cause, even if you're not in our industry, in the line of work you do. We've all got a calendar and we all have that feeling. When you see that name pull up, if that's a meeting you're going, I can't wait to get an update from them. Or it's one that you go, oh, I'm kind of anxious because I've got that meeting in a few days and we don't want our advisors to have that feeling.

Speaker 1:

And so sometimes, at the beginning of a conversation with either myself or Jay, we'll speak to someone and go look, I'm just not sure where the best fit They'll go. What do you mean? I have $5 million and I've watched your videos and I just think we're going to be perfect. And we'll say look, we really need to talk about this more. I think this goes beyond you having the assets it's. Are you someone that our advisor is going to want to work with? Are you the type of person that you go. Yep, I think my wife is going to connect, because a lot of you guys reaching out, you're the ones spearheading the financial side and we want to ask your spouse, your partner hey, did you have a lemonade stand growing up? What was money like? Did you feel anxious when your parents talked about money? We want to go deeper than that. So, james, there's a million more things I want to go into.

Speaker 1:

The next episode is really going to be next week, where we talk about what's the big difference between Root and other firms. What do we want to do in the future? Are we going to be adding on travel tips? Are we going to be adding on travel tips? Are we going to be adding on lifestyle? What's that really going to look like? How do we make sure advisors are ensuring that the service continues? Because it's one thing to start that way, but how? And has grown to. A lead advisor now works with people at Root who reach out, who have 10 million plus in assets. So certainly want to dive deeper, james. Anything you want to leave anyone with this episode.

Speaker 2:

No, a lot more to come. I think, again, this is not a traditional episode, but and again, for those of you who didn't know, we're financial advisors. Surprise, we're financial advisors and we, in the same way, we want to say yeah, we want to be very transparent about how we do planning and work and also here, here's how we're running root, because we do want it to be something that's special. We do want it to be something that clients and prospective clients and people who are fortunate enough to work with as team members and colleagues feel like this is something I want to be part of for a long time, because there's some great work to be done and we're excited to be able to get to do it.

Speaker 1:

Amazing, love this episode. We will see you guys next week. See y'all next time.

Speaker 2:

The information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and are not guaranteed. Any mention of rates of return are historical and illustrative in nature and are not a guarantee of future returns. Past performance does not guarantee future performance.

Speaker 1:

Viewers are encouraged to seek advice from a qualified tax, legal or investment advisor professional to determine whether any information presented may be suitable for their specific situation.

Speaker 2:

Once again, I'm James Canole, founder of Root Financial, and if you're interested in seeing how we help our clients at Root Financial get the most out of life with their money, be sure to visit us at wwwrootfinancialpartnerscom.