Podcast Summary: Financial Advisor Success Ep 426

Guest: Jennifer des Groseilliers, CEO of The Mather Group
Host: Michael Kitces
Date: February 25, 2025

Overview

This episode explores The Mather Group's innovative approach to equity compensation, rolling out a broad, performance-based equity incentive program that aligns the entire 180-person team around exemplary client service and firm profitability. Jennifer des Groseilliers details the evolution of their equity plan, the operational and cultural impact, and shares deep insights into building high-performance advisory firms at a multi-billion-dollar scale.

Main Discussion Points

1. Background of The Mather Group and Introduction of Equity Grants

• The Mather Group (TMG) was founded in 2011 and grew rapidly to $15B in AUM and 180 employees in 12 locations.
• The equity program was catalyzed in 2022 after founder Stuart Mather’s sudden passing and the entry of Vistria Group as a capital partner.
• 85% of TMG employees now participate as equity owners via a grant-based, performance-driven system. Plans are nearly complete for all employees to have equity or a clear pathway to it.
• The historic model of “equity by buy-in” is replaced at TMG by performance-based grants aligning every team member with long-term enterprise value growth.

  "My intent is that every single member of the Mather Group either has equity or they have a clear path to equity and they know exactly what they need to do from a performance perspective."
  — Jennifer (06:33)

2. Equity Compensation Plan Mechanics

• Eligibility & Metrics:

  • Equity is granted based on meeting department-specific SMART goals (Specific, Measurable, Achievable, Realistic, Time-bound).
  • For wealth advisors, key metrics include:
    • Client retention targets (e.g., 98%+)
    • Revenue managed (target $1.75M per lead advisor)

• Vesting & Realization:

  • Grants vest upon a firm-wide liquidity event (e.g., a sale or recap by the PE partner), not on a set time schedule.
  • No buy-in required—equity is a reward for ongoing, above-base performance.
  • Initial legacy grants retained top contributors through the transition; ongoing grants are for performance.

• Grant Size:

  • Target for most employees is equity value equivalent to at least one year’s salary, built over several years of hitting targets.

  "You walk in the door every day—I own part of this firm. I'm committed to not only reaching my goals but helping other people... Equity should really be viewed as very, very special."
  — Jennifer (52:36)

3. Firm-Wide Alignment and Performance Management

• All employees set SMART goals and have aligned department and personal objectives tracked in HiBOB HR software.

• Performance management and leadership development are heavily emphasized, with a dedicated advisory council of 25 leaders involved in firm governance and culture building.

• Goal achievement is a "double-trigger": employees only earn equity if both individual and firm targets are met.

  "I applaud your effort, but I'm only going to reward your results."
  — Jennifer (43:10)

  "Equity grants happen when you're performing above and beyond just what we would expect somebody to do with just their base salary."
  — Jennifer (37:47)

4. Organizational Structure for Growth and Client Service

• The firm is bifurcated between advisory and sales roles:

  • Wealth Advisors: Manage ongoing client relationships.
  • Business Development Advisors: Focus exclusively on converting prospects to clients.
  • Inside Sales: Associates source and set up prospect meetings and are recruited from a robust internship program.

• The client experience is highly systematized ("you don't get one advisor; you get the Mather Group") with a team-based approach supported by technology and process improvements.

  "As advisors become more tenured, we're helping them upscale their book."
  — Jennifer (15:12)

  "It's very easy for people at the Mather group to see a clear line between what they're doing every day and what we're trying to achieve as a firm."
  — Jennifer (21:50)

Notable Quotes & Memorable Moments

• On the New Equity Structure:

  "This is the first time in my career where I've experienced a culture in a group where there really is 100% alignment with everybody who works here and what we're trying to accomplish."
  — Jennifer (21:50)

• On Culture Change:

  "Where I really feel the commitment to the equity and the ownership component is in our advisory council meetings... Now you have a room where everybody owns a piece of the firm..."
  — Jennifer (54:25)

• Candid Assessment of Goal-Setting:

  "While I applaud your effort, I'm going to reward your results."
  — Jennifer (43:10)

• On Growth Engine:

  "Our target client is an executive at a large company that's one to three years from retirement. Our inside sales group really drives our organic growth."
  — Jennifer (62:38)

  "We've had a very strong organic growth model and organic growth success. We want to make sure that continues to run at double digits."
  — Jennifer (61:06)

• Key Learning on Leadership:

  "We know that emotional intelligence trumps the other two every time... If I could have gotten that in my 30s instead of my late 40s, early 50s, I would have really soared."
  — Jennifer (82:56)

Timestamps for Important Segments

• TMG history and equity introduction: 06:00–09:23
• How performance metrics determine equity grants: 12:06–19:17
• Vesting structure & impact of liquidity event: 19:17–24:21
• Firm-wide performance culture and SMART goal adoption: 41:30–48:44
• Goal-tracking technology (HiBOB): 46:06–50:35
• Organizational structure for client service & growth: 62:38–68:20
• Internship & talent pipeline programs: 65:10–66:59
• M&A vs Organic Growth strategy: 74:25–78:55
• Reflections on emotional intelligence and leadership: 82:56–87:24

Additional Insights

• Leadership Development:
  Jennifer is passionate about cultivating leadership at all levels, referencing the "five levels of leadership" and emphasizing emotional intelligence as crucial for firm growth.
• Next Phase for the Firm:
  As TMG looks to future liquidity events (e.g., after Vistria's exit), maintaining equity programs and firm growth will be key, and future owners may need to continue similar incentive structures.
• Advice for Younger Advisors:
  Jennifer recommends studying behavioral finance for all new advisors as critical to career success and effective client service.
• Defining Success:
  Alignment with personal values (health, family, integrity, education, hard work) is Jennifer’s north star for both leadership and personal fulfillment.

Conclusion

Jennifer's approach at The Mather Group stands out for democratizing equity, fostering extreme alignment, and linking every role’s performance to the firm’s long-term value. Their methods—rigorous goal-setting, integrated performance tools, and tiered leadership development—provide a blueprint for high-performing firms at scale, blending both human and business capital for sustainable growth.