Hi, everyone. Welcome to What Works. This is a show for consortium advisors that taps into over 1,000 years of experience shared by our consortium advisors.

I’m your host, Don Patrick, and I’m here to guide the conversation with guest advisors and lift the hood on what works for them in business and life. It’s all about learning and growing.

So let’s go.

Don Patrick: Hey, everyone. Welcome to the 40th episode of the IFG podcast, What Works, and our guests today are Tommy Barnes and Derek Keeney of Nida financial Group up in beautiful Cartersville, Georgia. Hey, guys.

Derek Keeney: Hey. How you doing?

Thomas Barnes: Hey there.

Don Patrick: Tommy, you’re the… So my mom just got a new word.

It’s not seasoned citizen, you’re vintage. So I’m gonna go with you—I know. I loved it. So just tell us a little about your family, your background, things of that nature, and what kind of hobbies besides spreadsheets.

Thomas Barnes: Okay. Little bit about my family. Married to Vicky. Been married 43 years this year.

Don Patrick: She’s a saint.

Thomas Barnes: Met her right out of college, and she is a saint, that’s correct. Met her right out of college. We got married in 1983. We have three kids. Daniel is my oldest. Hard to believe I’ve got a son that’s gonna turn 40 years old this year, but I do. I have a daughter Liz and a daughter Hannah.

Daniel is married to Kristen, and they have a little boy and a little girl, two children. Hannah is married to Jared, and they have two little kids and expecting a third. And the third will be here in less than a month. So, exciting times for us. Be grandchild number five. Liz, my daughter, works for FCA.

She’s in Rome, Georgia, and she’s not married. So, far as things I like to do outside of working, I enjoy working outside around my place. I enjoy duck hunting. I enjoy just walking and exercising and being outside. I do not like to be inside, but that all changed about 10 years ago when I came to this business because I’m inside all day, every day now. But anyway, that’s kinda how things are.

Don Patrick: Yeah. I’m like you, I love being outside. Derek?

Derek Keeney: All right. So, yes been married to my wife, Beth, now for 33 years. We got married in ’93. Both originally from East Tennessee in the Knoxville, Oak Ridge area where the Manhattan Project was.

That’s where our dads worked, and they actually knew each other before we knew each other. Yeah. We’ve got three boys. Daniel is our oldest. He’s married to Athena, and he works here in the office with Tommy and me as an advisor. And then our middle son, Luke, is up in Manhattan as an attorney with a patent law litigation firm.

And then our youngest, Tyler, works down on the BeltLine in Atlanta for Capital One doing some programming and IT-type work for them. So we’ve been here in the Cartersville area now since probably 1995, so that’s, what, 31 years. After having moved around a little bit with work in manufacturing, and this is where we decided to call home.

Anecdotally, we got a job offer here in Cartersville, and we decided we would rent in Cartersville until we sold our home, and then we would move to Kennesaw or Marietta to get out of the sticks.

I fell in love with the sticks, and what a great place to raise a family and to be part of a wonderful community, so we’ve stuck here, so.

Don Patrick: It is beautiful. Yeah. But it’s growing. You’re starting to lose some of that charm.

Derek Keeney: Yeah, a little too much. It’s coming across the lake. It shouldn’t do it, but it is.

Don Patrick: Any hobbies?

Derek Keeney: Hobbies, yeah. I like piddling as we call it in the South. I like doing stuff around the house in the shop, outdoors.

Got five acres, so I like to mow. And just doing hiking, that kind of thing. And then we enjoy soccer. We’re a soccer family, so we like soccer a lot, so.

Don Patrick: Is that right? Yeah.

Derek Keeney: Yeah.

Don Patrick: So. And we got a professional soccer team.

Derek Keeney: We do, yeah. And we got a World Cup coming too.

Don Patrick: How cool. Both of your histories are fascinating.

Your whole story’s fascinating professionally, and watching you has been just amazing on a number of levels, which we’ll get to. So Tommy, since you’re the vintage one, I’ll start with you again, and tell us about your professional career and how you basically ended up here at Nida Financial.

Thomas Barnes: Okay. Went to school in Raleigh, North Carolina at North Carolina State. Graduated from there with a degree in pulp and paper technology, chemical engineering. Went to work for a paper company in Rome, Georgia. I grew up in Rome and came out of school back in the heyday of engineering when there were just lots of job offers.

I mean, I think I had 14 or 15 job offers coming out of school. I elected to go back home. My dad and I built our first house together. Worked in the paper industry for 35 years. Lived in Texas for a short while, three or four years, while I was managing the production at a plant out there. Came back to Rome, where the paper mill is.

Like I say, I grew up in Rome. Worked there up through the different levels of management and different areas of responsibility, and I told someone last week, the first five years I worked at the paper mill was really, really fun because I was employing the engineering skills I had learned in school, and you’re solving problems and you’re doing those sorts of things.

Then I began to be promoted, and my job became less about actually solving the problem and more about managing the people. And as I progressed up further, more and more people, and I think when I left International Paper, I had about 400 folks, and it became it became… It runs 24/7, if you don’t know anything about the paper industry.

Paper mills run twenty-four hours a day, seven days a week, 365 days a year. We’re familiar in this part of the state with pulpwood trucks, these big log trucks you see on the road. It took 400 of those to run the plant for one day. Oh my gosh. And so we were unloading a lot of trucks, and we were using a lot of pine trees, and my dad used to say, “I don’t know how there’s another pine tree growing. You guys haul so many in there.”

And I said, “Honestly, there are more pine trees growing today than there were when we started because when we plant them back, they plant them back at the optimal spacing and so forth.” So anyway, I could get into a whole lot about that, and I won’t. But I was a client of Chuck Nida’s.

Chuck Nida founded Nida Financial, and I was a client of Chuck’s for about 10 years, and came to Chuck at one point and said, “Hey, I’m not gonna work until 65. These all-nighters and these weekends are getting to me as I age. I’m gonna retire sooner than that. I’m thinking about 62.” And he said “Retire now and come to work with me.”

Which was a great offer, and I said, “No, don’t tell me that if you’re not serious.” He said, “I’m very serious.” I learned that I had to have a Series 7. I didn’t even know what that was at the time. Had always kind of managed my own investments in my 401(k), and I had a brokerage account with T. Rowe Price, but I also had a managed account that had been with three or four different financial professionals in town, and I was with Chuck at the time.

Wasn’t a whole lot of money, but anyway Chuck was a good friend before he was my financial advisor. Like I say, I learned about the 7 and the 66 and licensing around insurance and annuities. Long story short, instead of working to 62, I retired at 56 and came to work with Chuck, and I’ve been here almost 10 years now.

So very, very happy to be here.

Don Patrick: I mean, managing 400 people, that’s crazy, and you’ve shared so many stories, and I mean, that’s hard freaking work, and it is 24/7, and you’re on call. And when you started working with Chuck, I mean, it was amazing. I think the first meeting we had, and you put me in the conference room, and all of a sudden the big screen lights up, and you’re running KPIs.

Chuck doesn’t even know what a KPI is. And you shared with me every morning you started the day, you had KPIs to hit.

Thomas Barnes: And honestly, Derek formalized that when he came here. He put together a sheet where we look at KPIs on a monthly basis. I was just putting in front of Chuck every day, “Here’s what pays the bill. Here’s what runs our business.”

We need to look at them and not hope they get better. Hope is not a plan. The paper mill taught me that. Paper mill taught me a lot of things. One of them was hope for the best, but plan for the worst. One of them was, you better have a plan, results matter, that sort of thing.

So yeah, we started focusing on what actually drives the business. And to Chuck Nida’s credit, five months in, I told Chuck, I said, “Look, there’s not enough of a book of business here to support two families.” And at the time, I was getting a lot of calls from contacts I had in industry saying, “Why don’t you come and run this little engineering project for me, and I’ll pay you lucratively?” but it was for condensed time frames.

“But come and engineer this for me, come and engineer that for me, and I’ll pay you on a 1099.” And I was getting a lot of offers like that, and I was actually began to consider them because, I mean, I was five months in and I hadn’t made a penny. And to Chuck’s credit, he talked me out of that, and he said, “Stick with me. It’s gonna be really good.”

And he was right, and he was also very generous. Chuck began to cut me in on some things and help me find my footing. So I have a lot of admiration in my heart for Chuck Nida, giving an old guy a chance like that. And he said, “You’re doing the stuff in the background that I would never do. So keep doing that and support me because I can bring in more business that way,” which was actually what he loved.

I mean, Chuck, he got his energy from people coming in the door and very much a people person. Me, I’m more of a focus on the details, how do we make stuff happen kind of guy.

And Chuck one time said, “We’re gonna do…” I forget what it was some grand thing, and I said, “Really? How are we gonna do that?” He said, “That’s your job. Figure that out.” Okay.

Don Patrick: Well, it’s fascinating watching you two. First of all, you’re both engineers that have personalities. Tremendous amount of experience running businesses, managing people.

Very unusual in the financial planning world that people become financial planners and don’t realize they have a business they gotta run, and they don’t know. You guys came in here and absolutely have… And we’ll get into it, but you’ve really created an incredible business. So Derek, let’s hear about your engineering management/background.

Derek Keeney: Sure. Yes. So the journey started after I graduated from Georgia Tech with a bachelor’s degree in electrical engineering. Curiously, I was accepted into Tech with a Navy ROTC scholarship. And I’m a guy that always tries to keep opportunities open, so I was also accepted in the co-op program even though I didn’t intend to co-op because I had the ROTC scholarship.

Did my freshman year and went on my midshipman third class cruise which took me to the Mediterranean, which is pretty cool. Came back from that and we did our orientation for the incoming freshman class. I was one of the officers that helped run that. And during that orientation, we did a little vision test and lo and behold, the Navy discovered, and I discovered for that matter, that I was color blind.

So that resulted in some changes. Basically, they told me they were taking my scholarship away until they had a billet for me upon graduation, which, for those that don’t know, means they already have the job identified that I was gonna go into four years later. That was unlikely to happen.

So I pulled the co-op trigger, pulled out of the ROTC program before having to commit, and I worked my way through college programming for IBM in Atlanta. That was a good experience and that started that technical background for me. After getting out of tech, I went to work with Milliken & Company in South Carolina.

It’s a textile company, pretty good size. Working on air jet and water jet weaving machines. So if you think of a a big manufacturing facility, it’s got over 400 machines that are running extremely fast, making cloth that’s about six feet wide, each machine’s six feet wide, and is shooting the thread across that six-foot span with air ,with like a little air gun and it’s doing that about 750 times a minute, which is pretty cool.

And then when I went to water jet, it was doing it with a water pistol more like 250 times a minute. But it’s pretty fascinating. Did Milliken for a couple of years. Then we moved to Paris, Texas to work for Kimberly-Clark, making Huggies pull-up training pants and baby diapers.

Another fascinating process. Basically, each machine makes about 30,000 diapers a day, so it was pretty involved and did a lot working facilities engineering there programming stuff for our boilers and our air compressors and running our HVAC units and that kind of thing.

Because temperature and humidity, Tommy will know, especially when you take the paper, the pulp paper, and start using it in the manufacturing process, temperature and humidity are critical. So had to program for that in a large turnover facility. Left Kimberly-Clark after a few years, coming here to Cartersville, Georgia where I started working for Anheuser-Busch.

Spent 23 years with Anheuser-Busch in a variety of roles from maintenance to to engineering to operations, running our utilities department where we had several boilers and ammonia compressors. We did our refrigeration with ammonia, so we had over 10,000 pounds of ammonia running through the facility at any given time.

So an ammonia leak, in case you don’t know, is pretty deadly. And there was a kill radius outside of the brewery that we knew if we had a major leak, we knew what the kill radius and stuff was, but.

Thomas Barnes: I don’t think you can put the qualifier pretty on the word deadly.

Derek Keeney: Good point. Yeah. The cool thing the beer manufacturing process, high-speed manufacturing our can lines ran roughly at 2,100 cans a minute. So you’re filling the cans up 2,100 cans a minute, and our bottle lines ran around 1,200 bottles a minute.

So being involved in that was pretty cool. And then ended up the last little bit of my career with Anheuser-Busch as an engineering manager running all of our capital projects.

Our capital spend was about roughly $10 to $20 million a year. And we kept rolling probably 20 or 30 projects from small $5,000 projects to multimillion-dollar projects going all the time.

Different phases of scoping, execution, checkout, and all that jazz. Managing contractors and engineers and just building new toys that make beer. So that’s pretty cool. During that time with AB, yeah, I don’t know close to the end, I started getting a little bit of nerdy and political inclinations kicking in.

I was a little bit disgusted with how our country was doing with the current leadership and decided that my vote wasn’t good enough and I needed to get involved and run for elected office. And silly me, I thought school board was a cool place to start. Dealing with kids and taxes, what could be less controversial, right?

And during that race, I think it was probably around 2014 or so some folks said, “Yeah, you need to get to know this guy named Chuck Nida. He’s got a lot of contacts in your district, and he can help you get to know some folks.” And so I scheduled a meeting with Chuck, and Chuck was giddy because I was still working with Anheuser-Busch.

And Tommy will tell you, and most of the audience will know, folks that work in manufacturing and with world-class manufacturers at least, have pretty substantial 401(k)s. And he was talking to me, trying to get my 401(k). And I was talking to him, trying to get his contacts. And so he was running his discovery meeting with me, and I thought he was being all jovial and happy, and he was.

Chuck was just an amazing individual. And part of where he got into it was he said, “Where do you see yourself in about five years?” And I told him, I said, “Well, Chuck, I’m gonna be working for you and doing the same thing you’re doing.”

He said, “Really?” Yeah.

Don Patrick: I didn’t know that. I did not know that story.

Derek Keeney: Yeah. Yeah. And then yeah, fast-forward 2019 came around. It was actually back half of 2018. I got in touch with Chuck and said, “Yeah it’s time for me to make a move. And if we were serious then I’d like to join the firm.” And I joined in 2019 and Tommy was gracious enough to welcome me in and not see me as another mouth to feed and that we don’t have a big enough book to feed two.

What are you talking about, Bill? And those of you that knew Chuck and Tommy back then knew we had a greenhouse up on the hill. And Tommy and I were upstairs. It became affectionately known as the Nerd Nest. And we did our nerd stuff up there. And Chuck was down just loving life, having two or three meetings scheduled in the same hour and just doing all kinds of fun stuff to grow the business and that’s how I moved from the engineering world and the manufacturing world into the financial world. And other than losing Chuck, it’s been a blessing ever since.

Don Patrick: So I mean, both your hist—I mean, really hard jobs that you came from.

Yes. I mean, complex, difficult, hard. And is this world like a hobby as opposed to a job? I mean, there’s some complexity, but nothing like you guys came from.

Derek Keeney: Yeah. I’ll speak to it a little bit. Tommy can pile in, but it’s my retirement career. So yeah, it’s encore career some would call it.

And jokingly, back at the brewery, we’d say we’re working half days because we’re only putting in 12 hours. And so we come here and it’s like every day is a vacation and doing something we’re passionate about and love and serving people. Nah, it’s great.

It’s really cool.

Thomas Barnes: I would share that. The world I came from was complex and the part of the world that I came from that really just drove me and my wife as much as me nuts was the 24/7 nature of it. And I don’t know how many holidays and nights and weekends that I’ve spent in the paper mill unplanned.

The greatest part about this business is you get to help people. For me, the second greatest part about it is you can have a life outside of the business. Third is you have a schedule and you can actually keep the schedule. And things don’t happen, you don’t get the phone call at 4:00 on Friday afternoon that the boiler’s tripped and the plant’s shutting down and nobody’s going home and here we go kind of thing.

So that part’s great. There was a lot to learn. Like I said, I’d managed my own investments, but there was so much that I didn’t know. And when I came over here and I started learning things, it’s … You almost had to stop and say, “Well, I need to be taking care of clients and not just learning stuff.”

for example I had no idea. First guy, I remember the first trust guy came in five months into my tenure with Chuck, and we were talking about different things, and right before he left, he said, “How much business do you guys do in structured notes?” And I didn’t even know what a structured note was.

And I was embarrassed because I thought I should know this and I don’t. The thought occurred to me I could try to wing it, but I thought, “Nah, that’s not me. I’m not good at that.” And I said, “I’ve got to be perfectly honest with you, I don’t even know what you’re talking about.” And he sat down with me then and drew it on a yellow legal pad, kind of how they worked, and then ended income notes primarily is what he was talking about.

And I went to Chuck later and said, “Hey, Chuck, tell me about this.” And he said, “Well, I know what they are, but I’m really not licensed to use those. I have a six and not a seven.” And he said, “But if you want to pursue them, pursue them.” And Chuck was great that way. He gave me the free rein to do that.

And so we went and learned how they worked and so forth and so on. And so that was just one example. I mean, I didn’t know what an annuity was. Honestly, I’d never had one. Come to find out that’s what my pension is just an annuity. That’s right. But I didn’t know that at the time. And I mean, we didn’t have a choice when I left the paper company about whether you carried the pension or didn’t carry the pension.

You got a pension, and you can’t take a lump sum. But quickly learn when you come over here, there are a lot of companies that do allow you to take that lump sum distribu—So another instance of something that I had to learn, and I just didn’t know. Now, when it come to stocks and mutual funds and ETFs and investing and putting together an income plan and retirement, I pretty much had all that figured out.

But there were a lot of neat tools I could use when I got over here to help you work on some cases that might not be the, not vanilla, the one that’s got the special circumstances. So yeah, there was a lot to learn. You didn’t have to learn it at 3:00 a.m, which was a big selling point.

Yeah. And the other thing, like I say, the market closes every week at 4:00 on Friday, and that’s an awesome thing. But doesn’t mean you don’t work on the weekend. You still work, but you get to work when you want to and not when something else dictates you want to. So yeah, it was a complex world we came from, and depending on how deep you get into it, there’s a complex world we came to.

The last thing I’ll say about all that is I hear people say, “Hey, that’s a lot of work to do this or a lot of work to do that.” And I think, “Well, it is, but it’s behind a keyboard.” We’re not running up and down steps trying to figure out why the boiler’s not firing, and it’s not 120 degrees.

So, hey, I’ll take this over that any day. Cakewalk.

Don Patrick: Yeah. So yeah, I guess I sort of simplify. I’ve been doing this for 40 years, so all that stuff seems simpler.

Thomas Barnes: It does to folks like you and a lot of folks in IFG.

Don Patrick: Yeah, thought about just coming in cold and, yeah, there is a lot of complexity.

But you two have… I mean, really the business you have built, you’ve created… Chuck did not run a business. He sold and glad-handed with people and that was it, and somehow he got the rent paid, and I don’t know how he did it. But you guys got this thing running like a top, and we’ll talk about what you’re doing with the team.

I mean, you have amazing vision. Running just such a great business, and you know everything going on with it. I mean, it’s amazing. So Derek how much did you know about this world when… Well, by the way, I remember Chuck telling me, so you—He brought Tommy on. I’m going, “All right. Let’s see how that’s gonna work out,” ’cause Chuck is not a manager.

And then all of a sudden I hear this Derek guy he’s talking about bringing on. I go, “Oh, my gosh this could be a disaster.” But it is amazing. So you walk over here, Derek, did you have any background in this kind of stuff or why did you think you wanted to do it?

Derek Keeney: Well, it’s curious. Throughout my professional career, I’ve been fascinated with finance. I self-directed my own 401(k). I built tools on trying to I’d rebalance annually based on a weighted average performance, and I’d also do a momentum calculation on where my new investments were gonna go.

So I nerded out pretty extensively on, on doing most of the stuff we’re doing. And then we moved into joining with Chuck. I knew nothing about the complex world of $30,000 to $40,000 mutual funds and ETFs and all that jazz. So there was a lot to learn. Still learning even to this day. And I’m fascinated being part of IFG and getting to know the folks and learning from them.

Chuck taught us a lot. We’re blessed that we had a good network with the folks we used to work with. That’s really helped. And we’re both involved in our community. We’ve got our families have good reputations in the community, and so that’s helped. And I will tell you, Don, it’s hard to put into context.

We have a great background that what we’ve learned through being part of the industry is a lot of folks, it’s really a young industry, and a lot of folks that have been doing this all their lives, they’ve not got the mentality of succession planning and built to last, so to speak.

And where Tommy and I came from, we were always five-year planning then looking at KPIs today that led to five-year plans and going through and doing personnel reviews where we’re looking at succession planning and who’s gonna replace us if we’re gone tomorrow kind of a thing. And so we brought, I guess, some manufacturing, I’d call it, manufacturing best practices to an industry that’s young.

And hearing all the conversation now that’s going on at Focus and at IFG and stuff about, succession planning and how to build not for the sole proprietor, but how to build for the entity and all that. We’ve kinda got that background, yet we’re still in a business that has a model that rep ID…

Everything’s based on rep ID, so there’s restrictions on how to get ultimately where that plays out. But we did have that long-term view that we brought to it, and that’s when Tommy saw, he was talking anecdotally two or three months in that, “Hey, this model’s not sustainable.” He was able to quickly pick up on that, whereas folks that are in the middle cutting down the trees don’t have time to sharpen the blade aren’t gonna see that.

And so it was a good marriage with Chuck and the business that he had. He had a good foundation business, and we had a great network.

Don Patrick: That’s great. It’s a team effort. You guys brought so much in the way of skills and experience running a business, managing people, having a vision, KPIs. I mean, you guys have—It’s just been amazing how rapidly you built this thing.

And so what are some of the manufacturing tools that you learned and used? What were they that you brought into the business?

Thomas Barnes: One of them, I think, is, continuous improvement. What do you do to make it better? Instead of just doing the same thing over and over again, how do we streamline this process, make it more efficient, where instead of spending 30 minutes doing this task, I can spend 10, and the other 20 minutes I can be tackling something else.

One of our big focuses was return on assets, and we saw that, hey, we want recurring revenue. And so we began to focus on that, and we’ve driv— That’s one of our KPIs, and we drove that to, I think it’s up, what, 95% now, something like that. 95% of our revenue is recurring. And so that was one of the things that we focused on was the continuous improvement aspect.

Don Patrick: And by the way if I remember right, I think when Chuck joined us, maybe he had two or 3 million in advisory accounts. And where are you at today?

Thomas Barnes: I think this morning when we looked at it, it was 202.

Don Patrick: That’s unbelievable. Yeah.

Thomas Barnes: That’s focus. Yeah. Yeah. Well, I mean, another thing that manufacturing taught us was you rarely improve something you don’t measure and that you don’t focus on. So I mean, it’s just one of those things. We used to say if a pump was giving us problem in the plant, one of the things we did is went and put a bright light shining on it so everybody that walked by knew that pump was the problem and everybody focused on why.

So it’s kinda one of those things. And I would say one of the other things from manufacturing we brought with us was the whole key person, replacing the key person. If something happens when you run an operation that’s got 750 people, I mean, life gets in the way, right? And sometimes the guy you’re depending on is the guy that’s not gonna be there for six months or maybe forever again.

So you gotta know who’s next man up. And so we learned to try to figure that out. Who’s the next man up if something were to happen to one of us?

Don Patrick: Yeah, you guys have done a great job setting up the partnership, the legal framework, all of that. So I’m gonna back up just a little. So it’s always a challenge working on the business.

That’s what most financial planners struggle with and how they’re gonna and when they’re gonna do it. So you’ve done so much working on the business, plus growing the business. When do you find time to work on the business, and what are you two nerds doing now? And who’s running—

Derek Keeney: Well, frankly, I alluded to it back early on. Got a bit of land, we mow a lot. Mowing time is my thinking time. So, I think Tommy does the same when he’s out doing his chores, he’s always thinking. So we’re always thinking. Time to work on the business I’ve gotta tell you shortly after Chuck passed away, we didn’t have time.

We were trying to learn a book of clients that we didn’t hardly know any of them, and we were trying to… You think COVID was new to you that have been doing this for 40 years, John. Think about us doing COVID for the first time three years into this team. Oh, man. It was trying to learn that and trying to deal with a partner passing away.

So we spent several years knowing what a well-structured business ought to look like, and knowing we weren’t there. Though unable to work on it, we were able to process it. And then when we finally got some bandwidth by bringing on Daniel and Landon and Ben and stuff, we were able to take our background and then take what we had been working on in our minds, at least over time, and start getting it on paper and start punching through it and start laying it out.

So I would say our upbringing through manufacturing was where we worked on our business then, because we learned a lot of the things that folks that have been doing this forever are just now starting to learn. We learned it through those training grounds, and we were able to just take it, and finally when we got a chance to apply it we had seen enough of this industry to understand how to make the two fit together hand in glove.

Don Patrick: Do you have scheduled time to meet and work on the business?

Derek Keeney: We do.

Don Patrick: Or is it you just kinda get together and say, “Hey let’s schedule an hour”?

Thomas Barnes: We have a partners meeting once a month on Friday afternoon, where it’s just Derek and I, where we talk about whatever issue. We spent last Friday afternoon working on structure.

And we also have what we call an advisory committee meeting where, we’re working on that portion of the business, and Daniel joins us for that. We have an emergency issue kind of meeting every Monday, Wednesday, Friday morning. We don’t do it every morning, but it’s kinda, what are we doing today that’s interfacing with a client that might be an issue?

And so we get that in front of everybody, and we have set things that we look through, and Wealthbox actually is great at facilitating that meeting. So we kind of do it in segments, but once a month on Friday afternoons, that’s when we get together, just Derek and I, and focus on what is it about the bu—I mean, we have a budget.

We review our budget and look at the variances and look at what our succession plan is and how is our KPIs, how to impact them if something’s not trending the way we want, that sort of thing.

Don Patrick: So partnerships can be fantastic, and they can also be horrible, and clearly, you two have a great partnership.

Are you even owners? Or you are, so nobody has final decision-making? 50/50.

Derek Keeney: 50/50.

Don Patrick: I never would have advised that, but you guys have made that work.

Derek Keeney: Matter of fact, you did advise it. Yeah you told us. Yeah, you told us that. Yeah, you did advise that.

Thomas Barnes: Yeah. Yeah. But this will work.

Derek Keeney: The cool thing is Tommy and I are pretty equally yoked as far as outlook and belief systems and such.

So we’ve really been blessed not to have any any conflict with one another and the decisions have all come pretty easy. But I can understand. I mean, even Dave Ramsey, he says ‘The only ship that doesn’t sail is a partnerSHIP’. So I can see how there would be problems, and that’s the reason we’re doing the buy-sell agreements and the shareholders agreement and operating agreements and getting all the stuff in place that kind of quantifies the way we’re working together.

We’re trying to make that be a lasting piece for this firm so that our successors, they don’t have to depend on being as equally yoked as we are, so.

Don Patrick: So yeah, let’s just segue to the team, and Tommy, your vision for yourself, are you… this is like a five-year runway, I think. Is that what it is for yourself?

Three to five … three to five. Yeah. And you’re building the team out. So tell us about the team. I mean, you’ve you’ve done some really great things there as well.

Thomas Barnes: Okay. I got to tell you how it got started. We first intern we had was Daniel, who’s now an advisor with us, and here’s how I was introduced to Daniel.

Chuck came up to my office on a Friday afternoon about 4:45 and said, “Hey, what do you think about an intern?” I said, “Yeah, if he’s good.” He said, “Well, I was thinking about a guy that’s third year Kennesaw State, finance major, blah, blah, blah. Would that work?” And I said, “Yeah, I think so. I know a whole lot of things we could give him.”

And he said, “Great. His name’s Daniel, and he’ll be here Monday morning.” And I said, “Why are you asking? Why didn’t you just tell me?” But that’s the way Chuck was, you know. And anyway Daniel came, he interned with us. He did great. I mean, he’s got such a good work ethic, such a firm grasp of the industry.

And Daniel has a work initiative, that is, he just sees something that needs to be done and attacks it. He didn’t have to have me tell him.

Don Patrick: He takes after his dad.

Thomas Barnes: So we’ve had… Yeah, he does. Yeah. And so we’ve had interns. We’ve had a total of three now. No, four. We’ve had four interns. We’ve had four interns, three of which are now permanent employees, one which is not.

And you get to see, as an intern, you get to see where their core values are. You get to watch them work in the office. You get to see how they interact with people. You get to see how they are as a person. You get to know them as a person. And you can make a really good judgment of do they fit your culture or not after you’ve been working with them for three, six, nine months.

I’d love to say that we’re the smartest people, and we figured that out. I actually stole that from the folks at Chick-fil-A corporate because my daughter works there, and she had to work for a contractor for the first two years. And Chick-fil-A gets to gauge all those things, and then they gauge where that person, knowing they’ve got this skill set, where’s the best place that they fit.

And when that job comes open, they go, if it’s somebody they want to hang on to, and offer them the job. We kind of, we’re not proud. We’ll plagiarize whatever works. And so, that clearly works for them, and it has worked well for us. And thankful, I mean, we have a total of five, plus Trina, our office manager, six folks in the office now.

Daniel’s an advisor, and we have fully utilized the LPL fee waiver program with Daniel. And as soon as he moves off of that, which I think is in May of this year, we’ll move the next man up into that fee waiver program and make him a financial advisor. And then we’ve got another one coming after that.

And as I become more and more scarce around here, anticipate we’ll probably go look for another intern to see if we… ‘Cause you gotta have a pipeline, right? And so we always wanna know. And even if we can’t hire them right off the bat, I mean, Daniel graduated from school and we couldn’t afford to hire him at the time.

It was Chuck had died, and we could have really used him, but the market pulled back 20% and we were swamped, and we couldn’t, we just couldn’t do it. And he worked for Invesco as an internal wholesaler for two or three years. And then when we were ready, he was ready, and he came on with us.

But yeah, I’m thankful for the culture here because as the owners, we get to pick it, we get to build it the way we want it, which is awesome because that’s one of those things from manufacturing I never had the opportunity to do, you know? And I’m thankful for that.

Don Patrick: So Daniel, He’s been there, what, three years now, roughly?

Derek Keeney: As an advisor? Yes. Yeah.

Don Patrick: Yeah. Three years. Plus, he had all that background as internal wholesaler. Three years is, that, I mean, that’s impressive to be actually a full advisor with three years experience. But being around you… So then you have two others that are full-time. Are they doing like paraplanning? What exactly are they doing?

Thomas Barnes: Yeah. We have them as paraplanners right now. One of them is Landon Powell. Landon worked with us as an intern, and he graduated from University of Georgia with a degree in financial planning and has actually passed the CFP and is going through the process of the accreditation there.

And then we have Ben Subasic, who’s a graduate of Kennesaw State and whom actually Daniel runs the intern program for us now, and he brought two candidates in from Kennesaw State for Derek and I to talk to, so we didn’t have to go through all that screening. Daniel did all that, and he brought the two in.

We met them both. Either one of them could have been successful, I think, with us. We chose Ben, and Ben has done an outstanding job. We couldn’t be happier to have him. Fantastic.

Don Patrick: So you got a farm team. I love it.

Derek Keeney: Yeah. We got a process around it, and Ben and Landon are both licensed admins now, so they’re fully licensed, which has helped.

Don Patrick: And in another few years, they’ll be a full-time advisor. So I know your clients are segmented. I know you used to have a ton of them when… So you segmented out a certain portion of the client base and assign them to Daniel and that sort of thing or…?

Derek Keeney: Daniel, Tommy, and I are leads on, of course, across the book and certain segments of them are to Daniel.

And then for others then Daniel, Ben, or Landon are servicing advisors or advisor two or whatever you wanna call it on them. So basically we have—for the clients Tommy and I have traditionally been lead on, any of those meetings now have at least two people in there. It’s gonna be Tommy or me and then one of them.

So it’s starting to get the familiarity and starting to get that so that the final transitions are pretty seamless. And then, of course, our top-tier clients are always gonna have at least two in there at all times. And so Tommy’s transitioning some to me, some to Daniel. I’m transitioning to Daniel, and then we’re all doing getting Ben and Landon involved at the advisor two on most everybody too.

Don Patrick: Now, do they have any revenue-generating responsibilities?

Derek Keeney: Direct, yeah, Daniel does. The other two don’t. Well, Ben did just pick up his life and variable licenses, so he’s gonna be able to do any insurance and annuity work for us, but that’s not, I mean, that’s not through the advisory side.

But right now, they’re not generating revenue except for Daniel.

Don Patrick: Yeah. So in terms of new clients, where do they come from? I know you get a lot of referrals. I know you’re really involved in the community.

Thomas Barnes: We do. We get a number of referrals. Most of our client—we don’t advertise. One of the things that we’re gonna use the young guys to do is to develop our social media presence because we essentially don’t have very much of one right now.

We have been fortunate to have a number of new clients come in this year, and they were all referrals from our existing clients, just saying, “Hey, you should go see these two guys.” When we meet with clients, particularly new clients, one of the talking points that we use is, “Here’s what I think sets us apart from the other folks in town. Not that they’re bad folks. They’re all great folks, friends of mine. But here’s how we do it that sets us apart a little bit from the other guys.”

And I know how the other guys do it because I was one of their clients for a few years. Now, I’m sure their business models have changed over the years since I was there, but I do know how it is there and so, yeah.

Don Patrick: So what is it that sets you apart?

Thomas Barnes: I asked the fella that was my advisor 15 years ago before I moved to Chuck, I asked him, I said, “Do you ever look at the positions I hold or my portfolio or my plan when I’m not here?” And there were a lot of words, but there was not an answer. And so I asked the question again and I said, in this particular case, I said “That was a yes or no question.”

And there were a lot more words, and there wasn’t an answer, which was the answer. The answer was no, he just didn’t wanna say no. And so I think that’s kind of what sets us apart. We have a process built that where the client doesn’t have to be in the office for us to be sitting down and reviewing where their plan stands, where all the things that are important to that client stand.

And if we deem that there’s a change that’s significant enough, we send them an email, give them a call and say, “Hey, we’re reviewing your account and here’s what we think we should do. We’re just gonna let you know.” I mean, we’ve got discretion, advisory accounts, but we just inform them, “Hey, here’s what’s going on and here’s why.”

And so I think that’s kind of… That’s the way I always wanted my advisor to interact with me, and I never could find one that did that. So when I came to Chuck, I said, “This is what I think we should do.” And so, that’s what Derek and I have really focused on since we’ve been here.

Don Patrick: So you build your own portfolios, and in terms of trading, you using the LPL tool for that or what are you using for the trading process?

Derek Keeney: We trade through ClientWorks. And we do build our own portfolios. We’ve started going to some core portfolios that we do with a handful of our clients or accounts. Those are traded by Ben, one of our paraplanners, based on our instruction. And then we use the ClientWorks tool and then those folks go through the rebalancer.

I don’t know anything about it. Don’t ask me too much more detail than that. They do.

Don Patrick: And what do you use for research in terms of selecting ETFs, mutual funds, that sort of thing?

Derek Keeney: Oh, of course. We’re nerds. We custom develop that. Seriously we’ve got a screener that we run monthly that screens the universe of mutual funds and ETFs that are out there, and then we take that.

It’s, it comes in to us as an Excel spreadsheet. Used to have to run it manually through Morningstar. Our youngest son that I told you was a programmer, he’s got a Morningstar subscription now that we help pay for, and he’s doing all that scraping for us and bottling it up and sending it to us. So we get that universe of funds down to about 2,000 to 3,000 funds that we would pick from, and then using a a weighted average calculation to get us a rating on those based on historical performance.

We’ll select if it’s a bucket one fund conservative, we screen out anything that’s had a negative year over the past 10, and then try to find a category that’s performing through playing with that rating. If it’s bucket two, we look at dividends, giving a dividend over 2%, say and then screen based on that using the filters in Excel.

And then if it’s a bucket three fund, a growth fund we’ll look at that rating and go for the high growth and find categories we wanna exclude or include. And after we do all that, we find the fund that we’ve settled on. That’s a quantitative review. We find the fund we settled on and send it to our kids, our guys, and have them do a qualitative review and then and then we’ll look at it and make a decision on it.

For our core portfolios, that process working kind of the same except they do the… they know how to do the qual and quant screening. And all that, that screening they do results in a core positions list for a not a high conviction but a key position list. And we use that by category. We can tell you this month, this is a position we believe is the position to be in this month in this category.

And there’s not a lot of evolution in that, so it kinda can be a high conviction. I just avoid that term because that high conviction to me means it’s something you’re gonna hold onto until the bitter end, and I’m not that, not really that attached to hardly any positions. We’ll hold onto them until it makes sense to move out of them, so.

Don Patrick: Impressive. Let’s talk about technology and tech stack and what you’re all using; financial planning tools, and just what are you using?

Derek Keeney: Sure. We use Morningstar to do some low-level research. Nitrogen or Riskalyze, whatever you wanna call it, strictly for a risk score. We’ll be moving away from that because it’s way too expensive just to get a risk score we’re finding other ways to do that.

RightCapital is our financial planning software. We found that that it’s pretty robust, and it meets the needs for probably 95% of the people out there

Don Patrick: And it has risk score built into it.

Derek Keeney: It does. And we’ve actually—our screening process back to the… We call it a fund picker ’cause we’re never so creative with names.

Our fund picker now includes a risk score. Go figure. And so we’ll be moving out of Nitrogen as soon as we get all the contract they held us hostage to, and I hope this isn’t getting reviewed by the industry. RightCapital. Jump has been just amazing for us. That’s been a recurring theme for everyone.

Those are our major tools, and then we’ve developed our own. We’ve got a … we talked about our bucket strategy. We’ve got a bucket calculator that helps us figure out our allocations that go into the buckets, and we’ve got our fund picker that we use to select our fund positions we’re gonna go with.

And so we got a couple internally developed tools and a pretty good tech stack.

Thomas Barnes: We’re also moving to Kwanti—away from Riskalyze and using Kwanti. It’s able to do some things that we couldn’t get through Riskalyze.

Don Patrick: And it has a risk score as well.

Thomas Barnes: It does. And we find that they’re pretty consistent with what we’re used to and the test on risk number’s the down mark here. That’s when you find out if the risk number was really right or not.

Don Patrick: All right. So I’m a new potential client. I’ve been referred to y’all.

What is that process like with a potential new client? Meeting, phone call, Zoom?

Thomas Barnes: We do a meeting typically, a person-to-person meeting. We have tried to send things for them to fill out ahead of time and the success has been poor.

Don Patrick: That’s why they’re hiring you. They don’t wanna mess with that stuff.

Thomas Barnes: Yeah. And so we have a meeting with them. We have a data sheet, of course, that we wanna fill out, that we go through to gather all the information. We show them our process and how we go about. We find out what their goals are and what they’re looking to get out of the relationship.

Honestly, it’s tough for us in small town Cartersville to turn anybody away that wants to come and work with us because everybody talks. Everybody knows everybody, everybody talks. And we don’t wanna risk the negative publicity. There’s a couple advisors in town that have minimums and they stick to those minimums, and we hear about it in town.

Here’s their minimum. Yeah, I mean, everybody talks, so we try to avoid that. We do try to tell them, “Hey, if you’re just looking for somebody to,” there— We’ll tell them up front, “If you’re looking for somebody to jump in and jump out, that’s not us. We invest long-term. And if you’re looking for somebody to try to time the market, we are not your guys. You will be very unhappy with us.”

So, we go through that process. But we have a structured interview type where we talk to them, they talk to us, we show them our process, we tell them what they can expect, and we try to establish the expectations in that meeting for them and for us. “Here’s what we expect, tell me what you expect,” that sort of thing.

Don Patrick: So then you sit down and do your magic analysis and write capital and portfolios together and then have a follow-up meeting, I assume.

Thomas Barnes: Yeah, we do. And we tell them, “Hey, if you want to come to work with us, this is what we’re—how we see your plan should evolve from where it is now to where we would want to take it, and here’s why.”

And we say, “This is how we can ma—Here, these are the steps in making that process happen if you choose to do that,” you know.

Don Patrick: So is it a three-meeting process? Two meeting?

Thomas Barnes: No, it’s two typically.

Don Patrick: So you have the introductory meeting, then the second meeting you’re actually presenting your findings and all that.

So now I’m an existing client, what does that look like on an annual basis? Do I have a meeting a year or phone calls? What does that look like?

Thomas Barnes: Well, we try to do a number of touches outside of just the annual review meeting. We send birthday cards, and if you’re a gold or platinum client, well, you get a handwritten message in the birthday card, not just a card with signatures in it.

Unfortunately, our client base does a lot of walk-ins because that was how Chuck had built the business, and we’re trying to move away from that. And we do tell everyone that it is a team here. In other words, Derek doesn’t have his clients, and I don’t have mine. They’re all Nida Financial clients.

And so anybody that they talk to can do anything that they need done. And I think we’re pretty disciplined about how we keep notes on where current situations are in Wealthbox, where I can go pull up a client I’ve never met before, and in two or three minutes, I can pretty much understand where they are on most issues, unless it’s some really complex something that we’re working on.

So we require, of course, we try to have an annual meeting. We find that with our clients here, everybody that’s 50 years of age and older wants to sit in that room, look us in the eye. The 40 to 50-year-olds that’s about 50/50 whether they want to do a Zoom or phone call versus in-house. And under 40, nobody wants to come to the office.

They all want to do a Zoom, a phone call, an email. They’re gonna do communication some other way, which is fine with us. We tell folks when we bring them on, “Look, we’ll do this any way we want to, but we do need the communication, okay? We want you involved in the process here.”

And you get the client that’ll tell you, “Well, I trust you. Just do what you think.” Oh, I hate that. No, no, no. Gotta have you involved in the process here. You gotta understand what we’re doing, and let’s agree on what we’re doing. So we do that. I mean, we have some clients that want to meet four times a year.

Don Patrick: Really? That’s interesting.

Thomas Barnes: We have a few. Not very many, but we have a few that want to meet quarterly. We have most of our golds and platinums meet once a year in person. Probably a phone call two or three, maybe four times during the year about this or that. But formal review once a year, what we call a deep dive, where we dig into things.

Don Patrick: So how do you schedule the phone calls? Do you use Wealthbox for that? Does it like automatically come up or do you just have a list and say, “I’m gonna call this person and have a…”

Thomas Barnes: The phone calls, if we’re initiating a phone call, it’s usually us and it’s because of some review that we’re doing on their account that has caused us to think we need to talk to this person.

The folks that want to meet multiple times a year typically schedule as they go out the door for the next meeting. Would like to schedule everybody that way, honestly, and that way it would free up a lot of Trina’s time, and try to encourage folks to do that.

Don Patrick: So you got a three to five-year window timing. How are you guys structuring this phase out, yeah?

Thomas Barnes: We did a lot of work with Carla McCabe’s group as far as helping us, as she spoke at the retreat. Yeah. Not this past January, but the previous January. And we set up some time with her late last year, went through that process. We’re going through…

She pointed out some documents that we needed, that we’re working with an attorney now to get those in place. We’ve made decisions. Derek and I currently own 50% of… Well, I own X number of shares, he owns X number of shares, and there are treasury shares in the firm. And as I put shares up for purchase, of course, Derek buys or gives the option to, for them to go back to treasury.

But that process, we’re looking to begin that process of me selling shares probably July of this year. And then we won’t be 50/50 anymore. Shows you how much we trust each other, okay? The other thing is that we’re putting things in place document-wise, where certain decisions require what we call a super majority of voting shares.

Other decisions do not. And we’re both going in with eyes wide open about what those decisions are, and we’re working through that process now. We do have a buy-sell agreement that we have. We’ve got a shareholders agreement. We’ve got employment agreements with everybody in the office, including the two of us, and what it says in there about how the clients are and what you can and can’t do, and so forth and so on.

About who owns the clients, the fact that they’re all not a financial clients. So that process should begin in July of this year. The way we’ve got it structured, and it can move around some, but the way we’ve got it structured currently is it’s a three-year phase out for me. And then the way the deal is structured after that, be a about a 10-year payout over time.

But yeah, Carla and her group helped us value the firm. They helped us establish those windows, and they continue to help us run scenarios on how that looks as we get started on.

Don Patrick: Fantastic. Well, I’m gonna wrap up with a couple of questions for you two, have some fun. And so Derek, use three words to describe your talents and strengths.

Derek Keeney: Well, I would say analytical, process-oriented, and persistent.

Don Patrick: Yeah. Yeah, I agree with that. Tommy, how about you?

Thomas Barnes: I would say analytical. I would say also probably persistent. I would say another one for me is storytelling. I’m a big-time storyteller.

Don Patrick: You are, that’s true. So Tommy, tell us something about yourself that most people don’t know or might be surprised at.

Thomas Barnes: Something about me that most people might be surprised at. What’s not surprising is that I’m a Georgia redneck. But what might be surprising is that I do very much enjoy international travel, especially to Europe. I’ve been to Europe and Central America, and a number of different places.

Been on a number of mission trips in those places. So I’ve been to some pretty remote areas. I used to think that we had remote areas in the United States, but until you’ve been to Ghana, West Africa, and been two hours from the electricity, you really haven’t been to a remote place. But yeah, I’ve been there, so that might be something people didn’t know.

Don Patrick: I didn’t know that. How about you, Derek?

Derek Keeney: Oh, I don’t know. I guess, probably… I started work when I was 11 with the paper route. But my first real job, I guess, after that was self-employment, right? First real job after that when I was 15 was so I worked the paper route till then was working on the back of a garbage truck.

So, so I’ve been your garbage man, and that was back in the day when—

Don Patrick: Sanitation worker.

Derek Keeney: Yeah, when you had to heave and hoe ’em, and you hung off the back and went down the road. And I was blessed to work three 12 hours days and made 50 bucks a week doing that, so that’s.

Don Patrick: Oh my gosh …

Derek Keeney: I’ve been there. I’ve been that.

Don Patrick: Oh, that’s good. I love that. Yeah, I didn’t know that either. Anyway, I wanna thank you two for this. These things are wonderful and just so much knowledge gets shared. It’s been a blast watching you build this business and what you’ve done with it, and preparing for the next phase.

But anyway, I wanna thank you both very much for this and taking the time.

Thomas Barnes: Thank you.

Derek Keeney: Appreciate it.

Well, that’s it for today’s show. Thanks for listening.

If you’ve got something to share, send an email to dpatrick@thebraintrust.net. We want to know what works.

Until next time. See ya.