Episode 174: Never Give Up, Look For The Opportunities With Chris Gallo
Chris Gallo, Partner and Director of Business Accounting Services at Creative Planning, offers valuable career and leadership lessons that could help you find your own success. He shares his journey from political science to establishing a successful state and local tax consulting practice, including his experiences with various companies and the development of his business from the ground up. Chris talks about his company's growth strategies, leadership dynamics, and his approach to using technology and AI in their operations. We also explored the broader implications of AI on work and the economy, while also discussing his views on money, professional relationships, and the importance of mentoring the next generation.
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Never Give Up, Look For The Opportunities With Chris Gallo
Welcome to this episode where I interview Chris Gallo. He's the Partner and Director of Outsourced Accounting and Payroll. Chris began his career working on Capitol Hill for the chairman of the Judiciary Committee, where he learned to work between federal and state and local government. From there, he built and grew a couple of independent consulting firms before joining BerganKDV, where he built a state and local tax practice from the ground up.
Once that practice was off the ground, he used his experience with technology as well as his experience building practices to redefine the way CA was done at the firm. Now, as a part of Creative Planning, Chris has successfully built a $35 million practice with plans of doubling over the next ten years. I hope you enjoy this interview with Chris. There are lots of leadership lessons, lessons in this interview, and also, when you're really thinking about scaling and growing, you're going to see some actionable items that Chris provided during this interview.
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Chris Gallo Of Creative Planning
I am here with my friend Chris Gallo. He is a Partner at Creative Planning. Chris, do you want to get started with just a little intro or background on yourself?
Sure, will do. As you had said, I'm a Partner at Creative Planning, formerly known as BerganKDV. I think it was a Top 50 firm at the time, prior to the acquisition by Creative Planning, I lead our Outsourced Business Accounting and Payroll team. The reason that we name it that is because Peter Mallouk, owner of Creative Planning, has gone through a number of iterations on naming conventions, and he says, “The more confusing the name, the more confused people get.” He likes to name it exactly what it is. We’ve got wealth management, outsource business accounting, it's named what it is. BerganKDV sold to Creative Planning and we became Creative Planning Business Services. That's exactly how we think of ourselves and call ourselves.
The reason it's out business accounting and payroll is because we have taken effectively all functions of a business financial accounting unit or team, packaged it and provided it as an outsourced option for the market to buy. As we know, most payroll bureaus are standalone, and while that exists here, we rolled it into our financial accounting team and thus created the package from payroll, the whole way through CFO level services. Obviously, we'll talk more about that as we get into it. It's a little bit about me and what I do here at Creative Planning.
I think it seems so simple, but just to name something simple. You would think that we have to take all this time, but you want the market to understand what you do.
You do. I’ll touch on this a little bit. When I originally took over CAS, we renamed it to FAST, and that was Financial Accounting Advisory Services Team. It still lives fondly in my heart, but we always had to explain what FAST was and thought, “That's great. People ask about what's FAST.” It is directly contrary to Peter's beliefs. We're like, “Alright, whatever. We'll call it Outsource Business Accounting and Payroll, and people don't have to ask.”
That's where I started. I wasn't a thing. When did I start my practice originally? I think it was in 2001, and that's what I called it. Outsource Accounting and Bookkeeping Services.
Keep it simple.
Chris’ Childhood And Educational Background
Yeah, exactly. Let's go back and just get a little background on yourself before we get to where you are today. Where did you grow up? What did your parents do for their careers? Did you have siblings? Just give us a little background on yourself.
Sure, will do. It's a bit of a story. I was born in Kentucky but I lived there for like six months.
What part of Kentucky?
Maysville, the Covington area. In the late ‘70s, when I was born, it was pretty deep South. My folks are originally from Pennsylvania, Western, PA. My mom's from Pittsburgh. Dad is from Erie. Mom was a teacher. Dad was in manufacturing. During that time, it was Carnation Foods. During that time, vertical integration was a big deal. Carnation Foods, if you think canned milk and those types of things. They owned the dairy farms. They owned the cows. They owned the milking process. They were also buying canneries. They started the cannery and they owned all of these things. At some point in time in the ‘70s and ‘80s, they started divesting of the canning operations and the can plants.
It's the age-old story of private equity. Two guys started buying canning operations and then grew to be a publicly traded company. Now it's called Silgan Containers. My dad went to college, worked his way up, and became a plant manager. He was moving around to different plants. That's what you did in the day. Nobody was mobile. Nobody worked remotely. You were on-site working.
He would either take on old facilities and revamp them, bring them online, newer ways of doing things, or when we originally that then moved from Western Pennsylvania, so Kentucky to Western Pennsylvania, Western Pennsylvania to Central Iowa, which is where I'm sitting now. There are a couple of stops in between there and my personal life too.
He moved to start the world's most state-of-the-art canning operation. They actually just built the cans. They made cans, and he would say, “They made trash,” which if you think about it, It's pretty much anything. Anything these days, if it's got a pop top to it, Friskies cat food, Carnation milk, the tuna cans, anything with a pop top to it for the most part outside of your beverage cans is made by Silgan Containers.
The one where you peel it up.
That's right. The peel top. I spent some time working in those manufacturing facilities, just doing a lot of different stuff there and learning like, “I might not want to do that,” growing up. I went to school in Central Iowa High School, went to University of Northern Iowa, which at the time was the number one accounting college in the nation year over year. I'm not sure where they stand now.
I always wonder how they get rated that.
I don't know. You know what I think it is, it's probably just like anything else. It's the, you pay enough to get rated number one. You put out a whole bunch of CPAs and they're like, “Okay, you're number one,” by whoever's ranking them. I actually got a Political Business degree. I decided I didn't want to be a CPA, so I went into finance, got an Economics minor, got a Business Finance degree, but did not decide to be a CPA. I liked politics. I was elected to the student council, if you will, in college and all that stuff.
Getting Into The Political Sphere At Washington D.C.
That actually took me to Washington, DC. I worked for the chairman of the judiciary committee at the time. His name was Jim Sensenbrenner. He retired not long ago. I think he was like the oldest and longest-standing member of Congress, maybe of all time. At that time, being part of the chairman of the judiciary committee, I was part of a very high-ranking government person, so it was a lot.
Was this an internship or when you graduated from college?
Yeah, I got an internship, and then I actually graduated and worked for him for 4 or 5 years, and then I ended up quitting there. I ran the Fairfax County Republican Committee for the George Bush campaign, which I like to I say that's the last time a Republican won Fairfax County. I got to hold some record. Looking back on things, it's like, “All right, that was cool.”
Did you enjoy it?
Yeah, I enjoyed it at the time. Washington, DC was a different place. It was really cool. It was a lot of fun. As a young twenties, you've set off to change the world. I quickly realized the world was well past changing. I’ve never seen hot dogs being made, but I bet it's disgusting. The government being made even worse. It’s as bad as everybody says. It's actually even worse.
What was the thing that got you to realize that you weren't going to be able to make things change?
I like to be a fiscal hawk myself. I'm a libertarian. I'm like, “Leave me alone.” I like fiscal responsibility. You would be running a business and a budget. There is no fiscal responsibility. Everything is a deal. Everything is a backdoor deal in Washington. Everybody's paid for. Everybody's got a dollar connected to them, and nothing gets done without some type of purchase happening. I'm not suggesting it's all a bribe. I'm suggesting it's like lobbying. I need this done, so I’ll vote for your bill, which is $1 billion of craft that we don't need. I was like, “I’m out of this deal here.”
Dabbling In State And Local Taxes
I got an opportunity to run the campaign for George Bush at the time, who I didn't know anybody better than to admire. I’ll leave it at that. I lost faith in that when George Bush so eloquently said, “We must suspend free market principles to save the free market.” That's a quote by that genius. I was like, “No, that's not how it works.” That was in like 2008. It was just like, “I’m out of here. I'm not going to do this anymore.” I moved. I needed some space. I like to be outdoors and fish. I like to hunt. I like to do those things. I was single. I'm like, “I'm going to just move back to Iowa.”
I had an opportunity to be a CFO for a small construction company. That was about 2007, 2008, which at the time, hindsight being what it is, and thus George Bush pushing all of the policies to accept low to no interest loans to unqualified people, thus crashing the housing market. It was a bad time to be a CFO for a construction company. It didn't work out real well. I had some time to I'm on my own, but over the course of the time that I was CFO, I learned to build houses. I bought an acreage and quite literally built my own house because I had time to figure a few things out. Over the course of that time, I met a former partner and he had started a state and local tax practice.
Being in the federal government, I learned a lot about how the federal government works, the difference in the state and local governments, the distinction between tax codes all that good stuff. It was like, “I know a little bit about what you're talking about.” He was starting up a company in Eastern Iowa. We had got to talk and he said, “What do you think about taking on the Western front?” I'm like, “All right, that sounds great. I got nothing else to do at this time.”
That was when I really professionally took on state and local tax. I always just dabbled in it and understood it. Whatever issue may come to the federal government that wasn't federal, it was state and local, I would pick up some of those issues. I started working with that person for a while. I spent several years doing that, at least five in that company. We parted ways and I took the business knowledge and building sense that I had anyway, combined it with the state and local and started or joined another very small firm. It was a risk management firm. I started their state and local tax practice from a risk management perspective.
Do you still get to utilize your political background doing state and local tax?
Absolutely, because understanding how government works plays a big part in understanding and being able to interpret code law and making it read how you want it to read and then being able to speak political gibberish to government officials, watching my P'S and Q's, eloquently, was a very important part of things. Actually, I’ve written Iowa code. It's like I changed two words in a sentence, but it was very impactful to lots of businesses in Iowa.
Leadership Lessons: Understanding how the government works and being able to interpret code law plays a big part in doing state and local taxes.
I still lobby for fiscal responsible code. I spend a fair amount of time on Capitol Hill. I'm involved in Capitol Hill in Iowa. I'm involved in a lot of associations and National Federation of Independent Businesses that represent small businesses. I still like to do quite a bit of lobbying for beneficial, fiscal responsible legislation that benefits businesses.
I think it's so important because years ago, when I worked in Xero, Australia, Australia have brought tech companies together with the government and tried to figure out how do we, through automation, just calculate these taxes rather than having these business owners get upside down and just take it. They really have all the information.
For Xero US, they took what they did, and we had a lobbyist. We went to the White House, we met with different senators and congressmen, and it was amazing. They were all like, “This is awesome. What bill would I put that in?” I was like, “That's not what I thought how it would go. It would have to fit in something else and the system.” Right now, when you're an accountant, you know how hard it is on small businesses to keep up with all that.
There's a couple of things. There is no national sales tax, so the Feds can't do anything about sales tax. Back in the day, if you will, pre-2018, there was a lot of complexity. Pre-Wayfair, Australia had the ability to just do it because they don't have the 10th amendment, which gives power back to the states to do what the states want to do. That's Australia. Australia sends US businesses letters all the time now, “You owe us this much money, we know why and how.”
Feds can't do that because there is no sales tax. States have the ability to govern themselves. States are never going to lessen sales tax for the most part. They're always looking for more revenue. Skip forward, I joined BerganKDV because I was pretty well exclusively consulting for them. I started my own firm inside risk management business, joined up with BerganKDV. CPAs think of federal tax and income. Federal income and all of that complexity is the primary objective for most tax CPAs. State income is next. Sales tax, they don't really want to deal with that. I think there are over 14,000 taxing jurisdictions and 500,000 lines of tax code from just sales tax.
Leadership Lessons: There are no states if there are no taxes. It dictates their ability to govern themselves. They will never lessen taxes and will always look for more revenue.
It took a specialist joint BerganKDV pre-Wayfair, again, in 2018. That was primarily working for singular businesses to go in and make sure that they were compliant in an individual state if they were even there and all the physical nexus laws and stuff were still applying. However, all of these states were starting to create these ridiculous laws to establish physical nexus. My favorite one is the Cookies Law.
I believe that Massachusetts created that said if you buy anything in Massachusetts over the internet, you have created a Cookies connection and thus have a physical presence in Massachusetts for that business. You’ve then got to pay a sales tax, even if you're from Iowa. You're like, “You're kidding.” It was being upheld all over the place. That was happening. Just through complexity, there was a reason for Bergan to have a specialist at the time, and we were doing audit defense and sales tax and just taking care of really state and local from a sales tax perspective.
Wayfair V. State Of South Dakota
What was the evolution of that to what you do now? You're now part of all outsourced accounting.
I started there in 2016 after two specific state and local tax companies to stand up their state and local tax practice, which they didn't really have. It was like the last person to deal with whatever audit for the client. In 2017, we're watching Wayfair, and to your political question, I still like to watch what's going on in politics for some really odd reason. It's a hobby. I'm watching Wayfair versus state of South Dakota.
Maybe you can explain Wayfair to anyone that's reading that doesn't know.
We'll put them right to sleep. Wayfair, the business, they were really revolutionizing selling across the US over the internet. It doesn't seem like that long ago. It really wasn't. Ordering stuff and having it shipped to you was not really that common in 2016 and ‘17. It makes you wonder where we're headed. Probably little airplanes and drones are going to be just dropping stuff all day long instead of the Amazon guy.
This is pre-Amazon, or Amazon is just coming on. Wayfair, the business, gets audited. They get a letter from the state of South Dakota. The state of South Dakota says, “You've got presence in our state because you're selling into the state, you're delivering into our state.” I don't know the particulars but that was the genesis of what was going on. Wayfair said, “No, we don't.” They went to court over that. Wayfair, the company, lost, and they took it to an appeals court, and they lost. This is happening over the course of a year. It happens all the time, still even, really. This was the very first one. I'm thinking to myself, “If I know governments, they're going to get their money. They're going to figure out a way to do this.”
In 2017, I bought $50,000 effectively of sales tax software, Vertex. Went to CPA.com. Actually, I googled. I'm like, “I'm going to need a calculator if we're going to provide this type of consulting to our clients. I wonder what's out there.” Vertex comes up, never heard of them. Avalara's all over the place. Vertex I had never heard of. I went to both of them at the time. Avalara didn't have an accountant’s portal. I'm like, “If I'm going to provide this, I’m not just sending them over to you,” so that was off table. Vertex at the time said, “Yeah, we'd love to work with you. You’ve got to go to CPA.com. We have an agreement to work with them.” I was like, “Okay.”
I go to CPA.com, run into Matt West. I guarantee you, the readers know Matt West and he works for us now. Anyway, this is how this started. He's like, “I got you, man. Here's what we got to do.” We get the Vertex platform. I buy what I need in January, 2018. We start in ‘17 thinking, “This is going to happen. Better get it figured out for whenever it hits.” We get the technology implemented and stood up. We really don't have any clients that are interested in it because they're like, “That's not going to happen.” Nobody's just going to take you on until they're forced to do something. Why would you start collecting across the United States if you don't have to?
We got the, “Thanks, but no, thanks,” a lot of times. Really, nobody believed me that it was going to happen until it did on June 21st, 2018. I was in Washington, DC at the time in Reagan National Airport, beautiful airport, when the Supreme Court gave the ruling as I'm taking off on an airplane. I’m peaking at the top of a mountain while I'm on an airplane and nobody can get a hold of me. It was great. I land wherever I'm at, and my phone's just blowing up. What I said was going to happen happened. That was like one of the few that was like, “I'm all in on this.” Luckily, we were ready to collect and calculate, collect, and remit for any business in the world, in the United States and we were one of the few firms that was able to do that.
Unlocking Revenue Growth And Reaching A Million Bucks
I could bring technology to any of the companies and to this day, most firms really still don't want to do it. We do a lot of work for those firms. We were in. I pushed my chips in, said, “This is going to happen.” Answering your question, how did I get here, a firm like that, revenue came in. We went from zero to $1 million in no time, and that's what firms like. I wasn't a partner at the time. They're like, “Who's this guy?” It made a splash and we were growing like crazy.
How do you think it affected the clients?
Clients were absolutely in love with it. It is still a booming business. That business, in and of itself, right now, will be over $4 million probably by the end of the year, just state and local tax. It's about 10% of the business that I run right now.
It's so confusing.
Businesses don't want anything to do with that. They're very happy to go ahead and outsource that to us. Firms do too. We work with a lot of firms that are like, “No, thank you. Will you handle it?” “Yeah, absolutely.” We don't take clients because of that. That could happen one time. That would be a very bad situation. For me, my name, reputation, and Creative Planning, we're not in the business of taking people's clients that we work for. The firms that trust us in that, of course, we have it in writing too. They lean on us to provide their clients with the same level of service that we're providing ours. Same time, so think about ‘19. CAS is the new hot ticket.
You were going through, but it's like, now CPA.com. It's like, “Look at this. Dixie McCurley’s teaching CAS 1.0. I took her class, by the way. I was teaching a state local tax class at the same time. We got these two teachers of classes, and I'm sitting in on hers, learning a lot about just mechanics and the future of what's going on with client accounting.
Christy, she's my number one right-hand person, was gathering all of the client accounting folks in the firm that were generally sitting outside that partner's office, doing write-up work, having it get written off. The firm was like, “Why don't we charge for this? What if we actually listened to somebody and did it monthly? Here's an idea. We're going to provide our clients with monthly financials instead of year-end write up work.” All of this is coming together. It seems like eons ago, but it really wasn't.
This fun story, I'm talking to my boss, same boss as Christy, we're two completely different people running small businesses in BerganKDV, we didn't really even know each other. My boss says, “Reach out to Christy. She runs a team of accountants. They file a lot of sales tax. I'm sure they would love to work with you,” so I did. She's like, “No. Absolutely not. Not interested at all in sales tax or working with us because we hate sales tax. We're not going to file more returns.”
Our boss says, “All right, you guys get together and put together a business plan that identifies how you're going to bring your teams together and be a singular part of the accounting function.” We did. We got together, we worked it all out and presented him with a very well laid out plan as to why that was not going to work.
We did exactly what he didn't say to do. “Here's why this won't work.” He just laughed and said, “You don't understand what I'm saying. You guys are coming together. You're going to get together. One of you can lead this. I don't care which one it is. I have faith in both of you. I have confidence that you can both do it. If you guys can't figure it out, we'll go through the interview process like the rest of the firm does to hire leaders and solutions. Back in the day, it was called the solution.
Before we get there, why were you both so adamant it won't work at the time?
I didn't have any staff. It was just me trying to run this. I had one person, Megan, who leads all of the compliance side of things now. Her and I are trying to figure out how to make any of this work real time now. We're at like 10, 20, 30, 40 clients. There's a line at the door to get in here. We're still just trying to figure this out and so is the rest of the world. I'm like, “Boss, I’ve got to have people.” He's like, “No, I don't think you do. Go to the accountants. They'll help you out.”
Randomly pick any accountant. Pick 100 accountants right now, and they will all tell you no, they don't want to file sales tax returns. They don't want anything to do with it. I'd take that bet. That's why we were like, “No, this is not what you think it is, boss. No way that I'm going to be able to use accounting staff to figure out sales tax technology code, all of the mapping that comes along with that and, by the way, use the technology to file returns.”
I maintain we were right, because we still don’t. We're on the same team, but we do not use accountants to file sales tax returns. We file thousands and thousands of them a month, like tens of thousands a month. He said, “You guys figure it out. One of you can lead these two good businesses, but you're coming together.” We get off the call, I call her back. I'm like, “Great. She's been around here for a lot longer than I had, has an established team.” It was leading this team. It was already a solution. “She's going to want to do this.” I called her up. I was like, “What do you think?” She said, “I don't want to lead this thing.” I said, “Good. I do,” and so I got the job.
Why didn't she want to lead it?
She didn't and doesn't want to be the forward-thinking, directional politicking face of the solution to the partners, to the CPAs to fight the battles. Remember back in this time, the plan was to be quite literally taking staff from partners to move work into a dedicated solution that they did not support or believe would be a good idea. She's like, “No, thank you.”
That's really important because I think a lot of people go for the title, but don't understand the job to really understand what you enjoy doing and take the ego out of it. “I don't want to be in those battles. That's not my forte,” and really having a clear understanding of what that meant to be the leader. Every skill is important. You need the person that can run the thing, and you need the person that can have the vision, but usually they're not the same person.
Streamlining Work Through The Entrepreneurial Operating System
You're exactly right. I believe in every single thing that you said. At the time, we employed EOS, Entrepreneurial Operating System. We don't do that anymore because they're large. We're too big of a company to employ it now. By EOS standards, we're too big of a company.
Explain EOS if someone hasn't heard of that.
It's effectively an operating template for a business to follow. That's how you manage your business. There's lots of different templates out there. There are books all over on how the business, but this came with a facilitator. EOS is the name. It forces you to have meetings with agendas. That set vision, traction organizer is one of those things. It names all the things and you adhere to that structure implicitly, or you're not running your business by US standards. It really worked well for a smaller firm to get us to where we are.
I was the visionary. By EOS terms, a visionary must have an integrator. They are two of the exact same positions, if you will. One is focusing on implementing the things that go on the integrator. The other person is focusing on the big picture. Where are we going? How are we going to do it? It was a lot of fun for me, probably not Christy so much, to sort out those roles.
Leadership Lessons: A visionary must have an integrator.
We started with like twelve people, whoever we could recruit to even join us in this crazy expedition, and about $2 million of revenue. That's about what we had. Think about $1 million in state and local and about $1 million in client accounting. I had a bunch of big visions and Christy would always be like, “No, not now.” She was right. Don't get me wrong. What I learned was to employ these visions, which were technology, new ways of doing things, the market's telling this, we're going to CPA.com, we're going to the other conventions. Even people like you, they're like, “You’ve got to do these things.”
Four Pillars At Creative Planning
I would come back and say, “We’ve got to do these things.” Christy's like, “No, you're crazy.” After a couple of years of that, I'm like, “Why don't you come to me to these conventions and you can hear other people talking about whatever it may be.” She did. When she got to see the vision as well, then I’ve never had it so easy because she's like, “That makes sense.” Other people are way better at communicating than you are. I learned something there, and we really started to take off. We went from $2 million to $4 million to $8 million to $16 million. We're going to do $40 million, probably $41 million on our fiscal year and we started in 2019.
The growth has been exponential because I like to say I just listen to the market and do what the market tells me it wants to do. I don't build anything and try and sell it because why bother? I’ll just solve problems. By doing so, I’ll give you the four pillars that we employ. One, I don't build anything. I listen to the market. What do you need? Number two, the second pillar of the square of the foundation is what technology am I going to use to solve that problem? If it requires more people to dig a hole or anything, I'm not doing it. What technology are we going to use? You can pick any of them out there.
Our tech stack is QuickBooks, Sage Intacct, NetSuite, and pick every single connector that connects to them. That's generally the base of the platform. Think Jirav for FP&A. Think Vertex and Avalara for state and local tax and all the other different technologies that we deploy. That's how we solve the problem that the market tells us.
The third pillar is how are we going to package and market this thing? I go to people who are good at doing that. Selling it and packaging, that's not me. I can talk about it all day, but I don't know how to get a lead to save my life. I don't want to. We talked to marketing that bring in Matt West. He's a sales genius. He's got a team of people who knows how to sell these things.
It's not sales per se. It's being able to speak eloquently and in an intelligent fashion, about the solution that we're bringing to you that you will pay us for. That culminates in a sale. The fourth pillar of that is the production that we put together. The production team. Christy leads that team. She is in charge of really making everything happen. When you put it all together, you've got a foundation for growth.
Listening To Your Client’s Pain Points And Desires
When you say listen to the market, when you know someone's not naturally a visionary person or can identify what is the thing the market is saying because you hear a lot of stuff, what is it that you're seeking in your head when you're listening?
The first and easiest thing is you got to listen to your clients and understand why they're leaving because they will. They'll probably tell you pretty quickly. We were hearing ‘16, ‘17, ‘18, “I'm leaving for a firm that specializes in what you do or what I do.” What are you talking about? We specialize in what you do. We weren't even saying that and we weren't talking to them monthly. They're telling us they wanted us to do their books and then they're telling us that they wanted some insight. Not for me to just crank out. I wasn't doing this at the time, neither was Christy, but in the general CPA world, if they were doing anything monthly, they weren't, it was usually always a follow-up, a cleanup, maybe quarterly.
Remember, because there's always a tax deadline. They do the work and be like, “Here's your books for the past 3 to 6 to 8 to 12 months.” That wasn't working and there was no insight there. That's listening to the market. Listening to people like you, listening to people like CPA.com that are able to be like, “This is what's coming out here from the governing bodies,” and then just getting good at finding your own channels to investigate what technology's out there to be able to solve those problems.
It's a culmination of all things. What I don't listen to is, and this is going to sound terrible, but the people trying to sell me technology because they're just trying to sell me something. I’ve got lots of partners. Those are not the people who are selling me technology, but what I'm not listening to is like, “You need this.” “No, I’ll let you know what I need,” type of thing.
Teaching AI To Solve Internal Problems
Right, because you're identifying the pain point and then searching for the solution. With all the evolution of AI, there has been an explosion at conferences of AI companies, what does that mean?
We're the whole way in. It means a lot of things. There are a number of ways to look at AI. Internally, from a Creative Planning bubble, we are injecting AI into everything that we do to make it easier for us to find data. To find out what we're doing for who and where for clients. Obviously, there's a lot of AI that is employed already in all of the technology that we have internally. We're building a lot of our own. If you're not if you're using technology that doesn't have AI in it, I don't even know what that would be, but that would be ridiculous. Just about everything's got some form of AI in it.
Also, I’ve got a team of technologists and programmers and developers that are building their own AI to solve our own internal problems. We are building agentic AI. I am actually starting with that here. We're already starting with it. We're going through and process mapping our own stuff. How do I do more work with the same number of people and actually have them do less work? I’ve heard people that don't know what they would do when they retire. I'm not one of those. Most people go to work, let's be realistic, because they like the paycheck. They like their job but if they were independently wealthy, they probably wouldn't do it. I'm a realistic.
Leadership Lessons: Most people go to work because they like the paycheck. But if they are independently wealthy, they would probably not do it.
I don't know. Some people are trying to teach work-life balance to a lot of people. They’re addicted to work.
There are some of those. They do exist. I like to say, “Let's get more work done without doing more work.” It's my favorite thing in the world, so let me make it easier. When people understand, if we grow at anywhere between 10% and 20% a year, let's just say 15% growth on a $40 million budget, that takes more what? People aren't even around to do it.
Nobody on this team, from Peter's vision, the whole way down through the company, is worried about losing their job because of AI. We are training the heck out of AI and making it make us more efficient. The amount of hours spent collating data to put together a report is absurd in this day and age. We're building AI, we're building agents. They're not outward-facing, they're inward-facing. When you teach that agent how you think, what you're looking for, the tasks that you're doing, you can absolutely make your job in life easier.
I just find it interesting watching the next year or so of job roles, because I think there's going to be supervisors of AI rather than a person.
There's no doubt about it. We're going to watch the machines work. That's perfectly fine with me. The machines are nowhere close, I maintain this no matter who tells you what, to being able to tell you anything to do or an intelligent advisory fashion. Maybe someday. I really do think that. That may never get there.
There are so many different options that it does take experience to know and just the other things that you cannot program into as thought around what to do as a business, based on what I learned twenty years ago in a different business in this particular situation that will never be injected into AI because it can't. That's what we're going to do as people.
The Impact Of AI On Tax Returns And Advisory
One last question on it for your opinion. With it doing a lot of the roles of entry-level people that help them learn how to do the advisory work, what are you thinking now is going to be a way for people to learn?
Big problem because if you don't have the history to understand and think about it, all of these situations over the course of my life allows me to tell you this is a good idea and you don't have any more of those. I have no idea what we're going do about that. I think that I am not alone because I’ve heard other people speak on the tax return is over. It is done by AI. The advisory is not. I forget who said it, but they used AI exclusively for two years to do the tax returns and they would review them and then talk about them.
The bigger firm, let's go with one of the big four, I don't know who it is, maybe top ten, they found that the two year class, the upper out in the old days, but you got a two year class, you come in, you spend two years was so far behind the two year class ahead of them that they stopped using AI to do their tax returns. You're not going to have anybody to know anything. The technology cannot get smarter. I know I'm going to get crucified by people, “Chris Gallo says it's not going to do this,” but there is no way for it to get smarter if we're going to get dumber. It's only going to be smarter because we're dumber.
Leadership Lessons: There is no way for AI to get smarter. It will only surpass us if we become dumber.
We won't know what we don't know.
Where it's really helpful is being able to just gather all of these things and then show us different avenues but you still have to be able to make an educated decision on which way to go on that. There's a lot to be learned there. I don't know. We're bringing in young kids as fast as we possibly can, and that's where we've got to get that data transfer of knowledge into their heads. It's ride along. It is learning the job experience. They never taught you anything in college anyway. They certainly don't teach you experience in college now. They teach you a lot of things, but I remember, we've had multiple kids graduate. They don't even know how to log into QuickBooks, let alone balance a balance sheet.
That was a realization even when technology was not even near what it is when I started. I was an audit and when I started my outsourced accounting practice, and I was like, “I'm going to take the first client so I know how to supervise someone doing this,” because I had never done the bookkeeping for a business. I’ve been the auditor looking over the bookkeeping and I realized how many bank recs I audited without ever having done a bank rec and understood where do those errors come from.
It's exactly the same thing. The good news here is the kids, as I say, I'm old and gray now, throughout the course of history, they are always smarter than we were at that age. That's a fact.
They understand the technology differently.
It's different. They understand what the technology can do and they also understand what they don't know and what the technology is able to do for them. This came up, and I think it's a good example of what we're facing. We've got a young staff accountant who is amazing. Really good person tied to our controllers and CFOs doing the work. They said, “Do you want me to show you how this happened?” She said, “Not yet. Not now.” I wanted to go figure it out on her own.
These people, I think, are being taught not to just implicitly trust it blindly and go figure out the mechanics of that and then you have to have people and technology is going to allow us to do this. AI is going to allow us to have enough time to now train people on what the heck it just told you happened. That has to happen.
Answering Rapid-Fire Questions About Money
You have to make space for it. So many great lessons here. I just want to end with just some rapid-fire questions. Family and friends, money, spiritual or health?
Do I pick one?
Pick a category.
Are you going to ask me more questions or is that the most important to me?
I’m going to ask you more.
Let's go with money. Who doesn't love money?
Things or actions I don't have that I want to have with money.
I'm pretty simple. I have the things that I want, but what am I looking forward to? I would like to buy more property, if you will. I'd like to have different places to go that were mine. I like to travel, like to have one in the South, like to have one in the Northwest. That would be right off top of my head. That's a couple of things that I'd love to purchase someday.
Things are actions I do have that I want to keep.
Material things. My boat. I love my boat. I love my fishing boat. Actions, really staying in touch with, I'm going to stick with the professional side of things here, but there are about 189 people that I employ, if you will. Right now, I'm going through and re-meet and talking with each one of them, what's going well, what's not going well, what we need to work on.
I get a lot of feedback that, believe it or not, I find it hard to believe, but people like my style. It's very open, it's very honest, it's very blunt, it's very direct. I choose to keep that. Not everybody loves what comes out of my mouth, that's for sure. You can trust that it's what I know, believe or feel because I'm not beating around the bush at all. I’ll definitely keep employing that as long as I can.
Things are actions I don't have that I don't want to have with money.
I don't have debt and I don't want to have it, outside of the house that type of thing. I was one of the fortunate ones to get one of those very low interest rates. Making money on that. Easy one. I don't want it. I don't think the United States should have it. I'm not going to get it. I’ll say debt.
The last one, things or actions that I do have that I don't want as far as money.
How is it not so easy to just scroll and click and buy stuff? I would like to see the Amazon man less. I'd love to text my wife and be like, “Honey, we hit the trifecta. We got Amazon, FedEx and UPS on the same day.” Probably crap that I don't need.
I think that's for anyone, especially when you get that Facebook ad that shows up and you're like, “I’ve meant to buy that.”
I can't wait to see what my phone suggests that I buy here in about five minutes, probably.
Mentoring The Next Generation About Money
Thank you so much for being on. Just before we close, is there anything that we didn't cover, something you want to emphasize from this conversation that you want to close with?
I like to meet everybody that we hire. A lot of them are the kids. I don't do enough mentoring. It is a bi thing. We have got to continue to bring up the next generation, or we're going to lose them probably because that experience. That's a big deal. Along the lines of fiscal responsibility and money, I don't think that we teach our kids or anybody enough about saving, the compounding value of a saved dollar invested. They say I believe it's like $9 trillion of wealth is going to transfer over the next 20 years, which couldn't be better for those of us entering the market and exiting the market in the middle of it. We are in a really good place.
Really understanding the value of money, how to earn it, how to save it, what that means long-term is a passion of mine. Anytime I'm talking to interns, like, “Can you give them any wisdom?” I’m like, “Yes, save your money right now. You save $1,000 now, by the time you're my age, you're going to appreciate that advice.” I don't think that we hammer on that quite enough.
I totally agree with that. Awesome. Thank you so much for being on and sharing your story. I'm sure people are going to get a lot out of it.
Yeah, you bet. That was fun. Thanks for having me.
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Now for my Mindful Moments of this interview that I had with Chris. First off, I really appreciated Chris really telling his story so genuinely and coming on just opening up about his journey and his successes and being really concrete about it as well. I think a lot of times, when people talk about successes or even things that were hard times, we gloss over the real dollars and the hardships and so forth.
What I definitely took out of Chris's story was even when he got down or things weren't exactly as he pictured, he stayed in a forward momentum state where he kept learning and growing so that he could be looking at what's next. Really looking for where the opportunities are, you really see that in the work that he does now. I think that really began with his training, being in the political arena and really understanding how things get done, even if it's not the perfect way and the way that we always want things to get done, but the fact that he really wanted to make an impact.
I think it's important when we have that inner purpose to make an impact. In order for us to feel fulfilled, it's important we identify those little wins along the way. Sometimes, we gloss over that and we focus on maybe the negative of it, it wasn't exactly the way that we thought it was going to be and look upon it like that. Usually, I find at least that even when I'm looking at things in my career or life that didn't go exactly as planned or as I'd hoped, because of those experiences, they've really taught me the lessons that I needed for the next thing.
I really think that we learn from even the things that didn't go as well, more than the things that go well because it shapes us and we also know where not to turn and go in a different direction so that we can make sure that we are successful. Even though he lost faith in the political process, that passion around government really came through in his state and local government work. He was able to create practices where there was none or people didn't see the opportunity that he saw.
I think that's another thing about being a visionary or someone that is entrepreneurial as their core. You're always looking for what's next, what could be the next hit. There are always naysayers. There are people that don't have the same vision and so they are going to push back at it because it actually might create more work or more investment and there are no guarantees. Sometimes you have to do things based on gut, like that inner knowing that something is either off or it's right. When it's right, you know it in your body and you move forward.
It doesn't mean that your execution plan is always going to be perfect, but if you actually take the chance, you're going to learn something. It's not ever just a failure. What's important is that you learn fast so that you don't lose too much along the way and you're able to make sure that you're still achieving the outcomes that you want.
I was at a workshop and someone said, “Instead of fail forward, it's learn forward.” I liked that so much better because I think so many times, we use these things as failures or we put them in the category of failures and they actually are learning processes that help us to move forward into the next objective or the next initiative. Really taking that positive spin out of a very negative word of learning from the experience and how do we move forward.
He has been the demonstration of that by not only creating his own practice when no one else could see what he was seeing himself, but then taking it into a larger accounting firm and being able to grow it from nothing to $1 million to now almost $40 million, including other service lines, of course. That experience he had in growing that has helped him grow the total practice and it's just a multiplier. It’s important to just go back and celebrate the wins. Make sure that you are learning forward and to not give up. There are times where you may need to lick your wounds and give yourself space to do that, but do it within a time period that you set and then get ready for what's next.
Thank you so much for reading and being a follower of it. It is so helpful when this is shared to others who you think would help them in their lives. Maybe it's at work or at home as well. That's how we continue to grow. We actually have celebrated five years of doing this show, which I can't believe. I really appreciate the continued growth of the show and you reading and what you take out of it as well.
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About Chris Gallo
Chris began his career working on Capitol Hill for the Chairman of the Judiciary Committee where he learned to work between Federal and State and Local Government. From there he built and grew a couple of independent consulting firms before joining BerganKDV where he built a State and Local Tax practice from the ground up. Once that practice was off the ground, he used his experience with technology as well as his experience building practices to redefine the way CAS was done at the firm. Now a part of Creative Planning Chris has successfully built a 35M CAS practice with plans of doubling over the next 10 years.