Scaling Smart: Building a High-Growth Firm for Entrepreneurs

Alan: Welcome to Behind the Advisor with XYPN, your behind-the-scenes look at the challenges and victories fee-only advisors encounter as they launch, run, and grow their independent firms. Join us for a deep dive into the real life stories, frontline insights and actionable strategies it takes to build a thriving, purpose-driven firm on your terms.

Today I'm thrilled to sit down with David Flores Wilson, a two-time Investopedia 100 advisor whose practice has grown five x in five years, from 30 million under management to 190 million. Since teaming up with a business partner in 2020, David has grown his firm to serve over 140 households with a strong focus on business exit planning, equity compensation, and philanthropy advising.

He's a frequent speaker at industry conferences, including XYPN LIVE and NAPFA, and has been featured in over 80 media appearances in this year alone. David joins us today to talk about the path to rapid growth, the importance of building a true client community, and how life experience and a love of learning shaped his journey into this profession.

David, welcome to the show.

David: Thanks, Alan. Great to be in conversation.

Alan: Yeah, I at some point we're going to have to talk about these 80 media appearances. That's incredible. Can you give us a quick background on it, based on your bio, you started out in investment banking and then transitioned into financial planning. Can you talk about that transition and why you made it?

David: Sure, I, I was doing investment banking out of college and it's seductive, right? The longer you stay in investment banking, the more they pay you and the less brutal your hours get. Something was happening in terms of – I was taking some certifications and I started to, but a lot of people coming to me for financial planning advice. I put together this rent versus buy spreadsheet and it circulated around the office.

And it hit me one day. Five years in, I'm, oh no, this isn’t my hobby. This is really my passion. I should probably do something about it. And what I did was I waited another three years, right? And it's probably one of my biggest life regrets is not going head first into it.

I basically waited until the financial crisis. I think back now in the client work that we do, a lot of times it's okay I'm going to advise people they don't make the same mistake. In terms of not following what they really want to do. I worked at a small RIA in New York City for eight, nine years and then teamed up with Dan Ryan in 2020 in the midst of the pandemic and the rest is history.

Alan: You teamed up to launch the firm? Correct. You didn't have your own firm before the merger?

David: Yeah, I was thinking right. There's real synergy. We had met in Brazilian jiu-jitsu, back in, many years ago. And we would spar on a regular basis to get better at jiu-jitsu. And here we are, 15 years later we spar in the business world a little bit sometimes, right?

To get better at our job. But I built a base, mostly people in their thirties and twenties, my personal network and.

He had real expertise around working with deca-millionaires on high level state tax and tax planning issues. And there's real synergy there. And we were drawn by our mutual values around lifelong learning and independence and fairness.

Alan: Okay. Awesome. When you were making that decision of - do I partner and only own 50% of the firm versus doing this myself, owning a hundred percent how did you navigate, what was the tipping point for you to make that decision? That partnering up was the way to go?

David: Yeah, a decision like that wasn't taken lightly. I think that we had talked for years, right? We truly understand where we were coming from and we have very different perspectives and we have very different personalities. And we worked with a coach.

And there were different books we read. The partnership charter is super helpful. Because we have seen in our own practices, working with founders and co-founders, advising them, saying things not work out because of disagreements or misalignment of values or whatnot. we, we were very systematic about thinking through the what ifs. And Alan: you had an incredible growth trajectory over these last few years. Can you talk about this five x growth and what fueled that acceleration of growth for the firm?

David: I don't think there's any magic formula. I think it's I know that, I've always had a mindset around playing the long game in a couple different areas. I always had a learning development plan, both in the short term and the long term.

And when a client base was the people I first started to work with, early thirties, singles, in New York City, and I'm, okay, these people get married. What planning issues am I going to have when they do get married? Okay, then they do get married.

No, maybe I should think about the planning issues for when they have children or they send those kids to college or potentially get divorced 10 years ago. I was working with a lot of people that were employees of high tech startup companies and it's okay, how do I be helpful and move up the corporate ladder, to speak and be helpful to the founders, learning how to multiply a Q SBS exemptions and all these other planning issues. And in addition to that building that. Building relationships with people that could be helpful to the client base later, different centers of influence.

If they buy real estate, who am I going to use for cost segregation studies? And then hanging out with those communities and then building content around being helpful and eventually, Alan, it's. It is little pennies in the bank and it grows compound interest.

And that knowledge and that good and those relationships really grew in the business, but without a doubt it was. It wasn't easy, right?

Alan: did you start with the niche of you've already answered this, but you started out, working with a lot of, or a couple of different client segments and then ended up with entrepreneurs. How did you make the decision to double down on working specifically with entrepreneurs?

David:   Yeah I think for me and this is a little bit my reflect of my personality is that when I first started, I thought it was a little boring. Just working with one type of client. 

I really enjoy, you know, the diversity of the type of people that are here in the city. And then eventually over time, I realized who I didn't like working with and who I like working with. And I really enjoy very dynamic situations. And so it just happens to be that the most dynamic situations tend to be entrepreneurs and owners and founders.

And adding value to them is super interesting because the challenge you never fully solved, right? The business is dynamic. What they're looking for is dynamic and there's always something new to learn. But for me it was really, a lot, a little bit of trial and error over time, right?

In terms of I know that if I went headlong into the wrong niche that. Personally because, Alan: yeah, every time we meet with our financial advisor, I tell my wife I feel bad for Jake having to work with me because I am your. Quintessential entrepreneurial client. I'm, I want to reinvest in my businesses and I don't want to think about exit planning and I can't exit.

I'm a founder and all of these things that I was trained on exactly how to have that conversation with the person, not how to be that person. It is tough. And I'm not sure, I think advisors think of business owners as oh, I'll work with business owners 'cause I'm a business owner.

But it really is a lot.

David: Yeah, it's a different mindset, right? In terms of and some of the things that really make them special and successful, this immersion and this need for control, it's. It's not as helpful, right? When they want to control what markets do and react to their markets instead of being patient.

But I do find that many business owners are open to learning new things. If you expose them whether it's the data or the stories or the different optimized plan, they can 

Alan: During this rapid growth phase and growth and especially rapid hypergrowth, it always sounds good from the outside, but when you are in it, it is terrifying. At least my experience at was and has been., what did you learn from that rapid growth phase that you feel maybe you could share with advisors who may be entering it or think they want to experience it, that might help them shortcut some of the pain that you experienced?

David: Yeah, I don't know a way to shortcut the pain, right? Because it is painful, right? In terms of because there's never been a situation over the last five years where a client wanted to meet on a weekend, an evening, and, the answer was always yes.

And I think that you also have to think about, okay, what business are we setting up? We're setting expectations around what the client experience is. And for us it's as much as. This is the client experience that's have to go all in on that. But I think always thinking two steps ahead is super important.

I think for us, we knew we were in the planning business. We knew we're in the investment business. It's only recently that we've Hey, the third business line we're in is talent development. And creating an environment where people can really thrive and grow and have a career path that's interesting and meaningful and impactful.

That's something I get jazzed about. And it's not something I. Really was on my mind, let's say four or five years ago. And for building systems around that and working on that, that company value proposition as, right? Because essentially now, our most valuable clients are the people that we hire.

And, we're not looking to scale. This isn't a b2b company disrupting an industry. This, we're.

Know when you sort of have an eye out of what's going to be happening, one or three helpful.

Alan: Awesome. Yeah. I've heard you mention the client community before. Can you talk about what client community means in your practice?

David: sure. I think, personally for me, I, when I grew up I was born and raised in Guam and, I saw this integration between family, friendship and business and there was. No delineation on a regular basis. And I, I've really taken that concept to how I approach business in New York City and how we built the firm.

And yeah, there's always been, what job is this? This is a great job, right? Because I get to talk to my friends all day long, right? And much of the client base they either started as friends and became clients or vice versa. And I was in my twenties and thirties.

Setting up snowboarding trips and trips to Europe and, inviting a couple clients, inviting some friends, and having a good time and getting to know people. More systematically, we've developed business owner round tables and happy hours and. trying to get the client base to see, hey, is there, there's a, is there a reason, maybe these two clients should meet each other. Maybe they could have some synergy there in their businesses or their careers. And those are the things we encourage.

Because you're, essentially, when it comes to the client experiences, that community that they're also getting not the advice and the centers of influence that we can introduce them to. Alan: Yeah that really is a unique approach because most advisors try to draw very clear boundaries that they are not friends with their clients and they want to be clear this is a planning relationship versus friends. And second, they don’t want to introduce clients to other clients. I hear I can't do a client appreciation event because then my clients will know who else works with me.

And you've taken the opposite approach. And is that, do you think part of that is due to the niche of working with business owners that you have this natural group who really can help each other and should be meeting? Or do you think it's more, personality driven and the way you were raised that you feel that this is important?

David: I think it's all of the above, right? I think, I saw for me, for example, when I started to join different business owner communities or entrepreneurial communities, that there was real information sharing going on. And it wasn't that I was getting business from those communities.

I was learning a lot of things about business and different approaches and it helped my thinking and gimme better advice generally. And yeah, I think there's the, they're on a similar journey. Many of the clients, right? They tend to be average ages around 40.

And, New York City it's a big city and it's a small city, right? And you walk around. I think it's, after a couple hours you run into someone right after you've been here a while. And developing that community is super helpful because and frankly when you see you're having a brunch and it's three friends and two of them are clients.

I don't know. I feel that's a lot of fun. 

Alan:Yeah, again, that's awesome. It's super unique. I don't hear a lot of advisors who plan snowboarding trips with their clients. And by not a lot, I'm not sure if I've heard anybody that does that, That's awesome. And I also imagine, we're based here in Bozeman, Montana, we're the only financial services company here and everyone is the only one in their industry versus New York City.

There's a whole lot of people doing similar businesses, which I assume, that helps create some community as there's that affinity, but there's much synergy between business owners and what they're doing in the city.

David: Yeah, absolutely. I think that I mean we have five boroughs here. A lot of people come in from, outside of Manhattan and New Jersey, Long Island, Westchester. I think that when you can strip it down to the ones that live here in Manhattan or Brooklyn, it gets to be a smaller and smaller community.

And you're, people relate to each other on these different issues and it's been super helpful to grow the business for sure.

Alan: You mentioned earlier that the goal is not necessarily to scale, but then you compared it to a software company. is this one of those. We're not scaling as fast as software, but we're certainly trying to scale faster than the average financial planner, or are you really trying to slow down growth?

I'm thinking, I'm curious how you're thinking about growth and scaling the business.

David: I think we're at that inflection point, right? Our day to day capacity isn't really there to take on a lot of clients, right? And we're definitely being smarter around, okay, now we need to implement some infrastructure. Right now we're looking for an operations manager and another paraplanner, for example.

And for us it's what matters first is that client experience. And we never really want to sacrifice that. For, there's been many people, maybe experienced advisors that wanted to join us and, they're doing it differently, right? And we have a certain way of thinking about clients and what we want to do for them. yeah, the growth of the business is if it doesn't grow as fast as it did on a percentage basis. The next five years is the last five years. That's totally fine, as long as we, we've maintain the quality and we really have an impact on people's lives. But we also see that, okay, if we are able to develop people and to really partner with talent and bring them along in their career and one day hopefully make them partners, then, that's an opportunity to increase impact.

But not at the.

For sure.

Alan: Yeah, as the denominator gets bigger, maintaining those percentage growth rates is really hard. But obviously you can still grow an amazing business. I'd say 15%, 10% compounded over enough years is massive. It does, you don't have to grow 50% every year. I want to talk a little bit about the financial planning process because you have a couple of areas of expertise.

And the first one that I saw was business exit planning. can you talk about how you approach business exit planning with your entrepreneurial clients and how you're helping prepare them for that transition?

David: Sure. It's a matter of philosophy, right? In terms of business exit planning. It's in some ways it's let's start with the end in mind. But some of the business owners that we work with are, years or, potentially even decades away from exiting their businesses.

And whether it's that personal readiness part of it, that financial readiness or the Disney business readiness, making the business more attractive or ready for any transition we want to implement those concepts. Lifecycle of the business owner is not central to the functions of the business. When you look at the risk from a legal perspective, from a technology perspective, all those things help improve the value of the business. And having those conversations years ahead of time is super helpful as we're trying to be helpful from okay, from the formation to grow to maturity to exit and beyond.

I think that understanding those concepts and bringing them early because, many business owners get. Years into it, and they're overwhelmed by even the thought of exit planning. It's always okay, exit planning is something I'm going to do five years from now.

And it's not something they have to do that, right? they, they can take digestible 90 day sprints for example, and implement, wage sales process that's repeatable. It translates into, through the funnel and converts.

What we're always trying to do is, they may not be doing exit planning, but we're letting clients know, dropping the breadcrumbs of some of these concepts that eventually when they're ready, because let's face it, business owners are crunch for time and there's only much time that we have, and when we do meet with them we have to prioritize.

Alan: Yeah, I'm curious the it, it seems. When folks sell their business, no matter their age they end up in one of two camps. Either they are depressed and sad and don't have any purpose, and they feel rudderless or they go on to have some meaningful, thriving next phase, whatever that looks.

Could be a business owner, could be teaching or angel investing or whatever. I, how do you help? Clients prepare for that transition. 'cause it is a big transition to go from CEO to former CEO.

David: Yeah, no, that's a wonderful point, Alan. I, and because we have to be very systematic about that because many people, even if you get people through that exit process and they have a wonderful liquidity event you're alluding to that, most business owners credit a year later, right?

And systematically saying, okay, what is their identity now? What are their values? What's their purpose now? What are their goals now? What are the activities they're doing? And then let's do a proforma of that, right? What does your model week look like?

Once you sell your business, you're, oh yeah, I play tennis. I want to spend more time with the kids. And then, okay what are you going to do for the other 102 hours a week and let's write it down. And if we really envision in a couple different ways, and again most things in planning, right?

You can tell people things, but a lot of times they have to discover it themselves, right? And these probing questions where they can understand that oh, wow, this is something that's as important as understanding the after tax proceeds I'm going to get, in a stock sale versus an asset sale, right?

Alan: Yeah, we definitely think a lot about how, and I think business owners, if I ask an owner, how can you increase profitability by 10% or 50% or a hundred percent in the next five years before you sell? They can rattle off, we know how to do that. I say how will you spend your time? It's – what time? What is that? What are your hobbies? Hobbies? What are those? Come on now.

David: Yeah, I do think there's an interesting thing, right? I think many advisors seem to have, maybe, a point person in a household that they're working with more. We tend not to have that as much. There's very few meetings where both spouses are not in the meeting, in the room.

And I think that 'cause I think a lot can be. If they're not. And then I think some of these issues around where we can get away from the quantitative and the, and the after tax dollars and talk about, okay, really let's talk about what success and happiness and fulfillment looks that's super important and when there's, you have both spouses in that meeting. And in general we're going to do a little bit of pushback when it's one spouse that wants to take all these meetings with us, for sure.

Alan: That makes a lot of sense. One other thing that I noticed from your website is the mention or this, the talk on philanthropy with purpose. And it makes a lot of sense that, as entrepreneurs are exiting their business. They many times or probably have more money than they will ever need to live their own great life.

And philanthropy makes a lot of sense. 'cause that's a, that's obviously an avenue for where the dollars can go. There's also an infinite amount of places you could spend your philanthropic dollars. And there's never going to be enough to cover everything. how do you help clients navigate those decisions?

I.

David: Sure,. The goal is to develop this framework to be super helpful when it comes to philanthropy and again, it is another way of going where the puck is headed with the client base, right? Because I think early on, many of them were in their twenties and thirties and, they might be giving to, they might be running a race and raising money for charity and then they have some small kids and they're giving to the school.

But a lot of the giving was really reactionary. And I think most advisors, yeah, we all know how, okay, this is a tax efficient way to give, we're going to give low basis stock, we're going to use donor funds. That's the table stakes. But what we wanted to do is really of saying: Hey, let's identify the causes that you care about based on your values. Let's help you identify, evaluate and monitor these investments in philanthropy in terms of the nonprofits. And you could, it's a journey, right? And people will change in that journey.

And the small checks become big checks once people get into those rough fifties and sixties. And we wanted to help people. Develop that nonprofit literacy. And it's been a wonderful way to engage the base in a different.

Alan: You seem to collect designations and education like Kitces does. In addition to your CFP and CFA, it looks like you also have the CIPA. Can you talk about the, going back a step to the business exit planning, the certified exit planning advisor. Can you talk about your experience with that education and designation and if that has impacted how you're approaching that work?

David: Sure. I think it's interesting because, sometimes I get questions from people in the industry about oh, this certification or that certification, should I take this? Is it worth it? My answer is always yes. I'm a little, I'm a little biased, right? Because there's, there's probably three or four designations that I've let lapse.

And for me the theory was, okay, let's see if there's any knowledge I could absorb to be a better advisor. Let's integrate it with my process. You maybe, take, make some slides. Help me remember certain things when I go to meetings, but I've never thought any certification has. The magic ticket to business growth or really understanding things? I think, but this is a great framework. The certified m and a advisor is another one. I think that for me it was this all started with the CFA back in my early twenties.

Yeah. A lot of my friends, they all disappeared on Sundays, watching football and I was not really a big football fan. I would start studying for these tests and it became a little bit of a tradition in the spring, to study for something to level up a little bit as another way of adding value to clients. 

Alan: I love the point that it's okay to let a designation lapse. it's okay to go get the education, use it, and then decide to not keep up with the CE and the payments and all that. But now you have a really great foundation of education. Switching gears a little bit I want to go back to from the intro where you said that you had 80 media appearances this year already. Can you talk about your focus there and how you are, what those media appearances are, what's included in that and how you are nurturing that pipeline of opportunities.

David: Sure, yeah. Whether it's, responding to media requests for a quotation from reporters or guesting on podcasts or producing, long form content on particular topics through the blog. I think they all work together and, this multi-factor in terms of what we're trying to accomplish, I know for me it helps me hone the message a little bit.

Sometimes there's a topic that I know and I'm going to write about it and then I'm, oh now I'm going to go research a little bit more, right? I can go deeper on that topic. There's SEO benefits. It definitely isn't at the top of the funnel. Oh, wow.

You get quoted in the media and all of a sudden, people start beating down your door. It's really mid funnel, right? In terms of the vast majority of the growth in the client base has been from the existing client referrals. And I think they have an additional layer of comfort when they make that introduction and that person who they really trust, the client sets up a meeting. 

They'll of course go down the Google rabbit hole and see that we have expertise or thoughts on different planning issues. when we walk into that first meeting on Zoom. It's we're not starting on we're starting on first or second base already, right? that's really the goal. I think there's been a few situations where clients say, Hey, I read your article about selling a business and I'd like to work with you. The vast majority of the impact for the business is on reducing that friction on the pipeline of clients that come in.

And for me it's as, it's another thing where it's, potentially it's compound interest, right? In terms of the domain authority of websites and more people hearing about us before we meet them. That potentially could.

Alan: Obviously y'all have a lot going on, a lot of growth. You said you're hiring, what is your primary focus over the next one to three years? Anything new? Anything in the pipeline, anything you're thinking about or working on? That's going to be coming soon.

David: I think the main thing is really focusing in on talent development and implementing some of these career paths that we have for people. Getting an operations manager, another paraplanner and coaching.

Working with them and showing them a pathway to equity as. Super exciting. Again not that interested in explosive growth. really measure growth that can really amplify some of the impact that we have for families and really making the organization stronger.

For sure. That's really what.

Alan: Fantastic. Yeah, and it's, I think we take for granted of oh, I'll hire people and develop them, but it's really hard work and it does take that concerted effort of I want to do this. I understand what it takes and I'm going to spend the time and energy. I was talking to an advisor recently and they were, they were meeting with their direct reports every other week for 30 minutes and they're, yeah, I'm having high turnover.

Yeah, I can imagine why. And it's because it really is time consuming. 

David: Interesting. Yeah. We developed these 30 to 40 planning topics that go beyond the CFP and are developing that. We can roll that out and teach that next generation that and make it interactive. And it forces us to think, okay what do we really think about?

How do you advise someone when they're buying a commercial building or when they're making an angel investment in a SaaS company or something like that. How do we really feel about that? What are the planning issues we're going to have and let's put pen to paper.

And that way you can facilitate that learning then to, Alan: as we're wrapping up, what is the best way for listeners to stay in or to connect with you and the firm where's the best place for them to go?

David: Sure,. If they Google David Flores Wilson, they can find us on the website. I'd love to chat about the industry or on our blog there's some information around things that are helpful for business owners and planning ideas there. I'm on LinkedIn as, Alan: fantastic. David, thank you very much for taking the time to come on the show and share your journey and your journey of building a really amazing firm. Thank you for the time today.

David: Thank you. Wonderful to be here.

Alan: All right, listeners, thanks for hanging out with us on Behind the Advisor. Want more bonus content from this episode and future episodes? Subscribe to our email list at joinxypn.com/bta. Remember, it's all about helping people live their great life here at XYPN. We'll catch you in the next episode.