Hannah: Well, thank you for joining us today, Douglas.
Douglas: Great to be here, Hannah.
Hannah: Yeah, well, I am so excited to have you on, just to hear more of your story. So, how did you first get into financial services, or financial planning?
Douglas: I grew up in the business, which was very interesting. My father started his career — I think it was his third or fourth career in his life — but, he started back in 1991 with what was then IDS American Express. Today, you might know that as Ameriprise Financial. Believe it or not, he still is a financial advisor, after almost, I think, 30 years at this point.
But, I grew up around it. When I was a freshman in college, he notice I was probably having a little too much fun, and maybe questioned what I would be doing the summer following my first year, and somewhat enticed me with a free trip to the headquarters to check out the company. Which worked, and when I came home there was a Series 7 manual on my bed. So, he tricked me pretty good, and asked, “Hey, now that you’ve learned a little bit about what we do and the company, and I know you’ve grown up around it, why don’t you see if you can’t pass this exam by the end of the summer?”
I was 19 at that time.
Douglas: Yeah, I kind of viewed it as a 19 year old would, who was having too much fun at college. Which was, “All right. So, the proposition is, I get to stay home for half the summer. I have one task, and that’s to pass this exam. I’m kind of already doing that in school, anyways.” I’m from south Florida, so there’s always a pool or beach involved. I just took that manual out the to the pool. By the middle of the summer, I think I had just barely passed the exam. I think it was a 70 you needed, and I got like a 71 or something like that.
So, it was very exciting, but honestly, I have no idea what it meant. All I knew is I passed this industry exam. And really, it was at that point that he took it to the next level. Which was like, “Now let me teach you the business.”
It’s a pretty long story, but I’ll be as succinct as possible. From, really, there, I give him a lot of credit. In the end, it didn’t really work out well as far as working with my dad. No doubt, he wanted me to be the succession plan. We can have a whole conversation for the advisors out there who are working in family practices. I’m quite jealous, if not envious of the situations that work out, because it’s a beautiful, beautiful thing.
But, backing the truck up here. He brought me in to his practice, and for the next three years while I was in school at the University of Florida, I was a full-time student and I was working full-time in my father’s practice. What he was training me on was a lot of the stuff that I’m very passionate in advising young advisors to do, which is, it was everything from administration to operations. Writing the plans. I mean, everything. And I think even Michael Kitces did a whole, “Paying your dues,” thing, and why that’s still relevant, even in this financial planning world we’re now in, not the go out and sell world that’s archaic and should not exist. But, I was paying my dues while earning my bachelor’s degree.
I think the one that was most valuable, other than, obviously, getting this early start, which is huge. That’s been my competitive advantage, virtually my entire career. But, it was the fact that no one’s going to teach you or let you get close to the action like a family member or a parent would. So, not only did I start young, but what I was exposed to the and the lessons I received, it was peppered with love. Your father wants you to do well, because you’re his child. And that was intense. My dad’s an intense guy. But as far as building up a confident advisor, he was extremely successful at doing that with me.
So, I did that throughout all of college. By the time I graduate, 23, 24 years old, I was doing client meetings. I guess, in some way, had paid my dues already. There was a book that I could work on and work in, and start to learn, at that point, how to do business development and work my local market, which was down in south Florida. But, life was somewhat pulling me in other directions. My then college sweetheart, now wife, decided to go to law school in New York City.
I just grew very unhappy being in south Florida working with my father. Living at home, I think, was the worst part of it all. Not only did you have to report to the office to see your dad, who’s the boss, but then you had to go home and share a meal with him too. That created a pretty toxic environment. And, my heart was just up in New York City. So …
Hannah: So, you used the phrase book of business. What did that look like?
Douglas: I used it in the term of build my own book of business, right?
Hannah: You said you had a book of business you could work.
Douglas: Yeah, so in that context, I meant that I was able to do things within my father’s practice, given it was a family affair. I was able to do more than if I was working with a stranger, so to speak, or someone that’s not related to you. Again, sitting in on virtually every client meeting, actually giving a recommendation. That’s what I meant by working … So working in versus working on is its own thing, right? So working on a practice, my dad was always strong on differentiating these two.
Working on the practice is building the practice. So, we’re talking about business development in that regard. Then, working in the practice is helping that practice operate. So, what you’re doing from an admin and operations side.
That’s a good point, Hannah, because a lot of times, I want to ask young advisors, what kind of career do they want? Do they want to work in a business or on a business? Both are perfectly acceptable. But it’s something, usually, young advisors don’t figure out right away. They’re going to have to go through that working in the business to even get to working on the business. But, for me, it was somewhat of a luxury that I could do both simultaneously, pretty early.
Hannah: So, you ended up moving to New York City, is that right?
Douglas: Yeah, this is a very cool part of the story, in that it was maybe October 2008 when I moved to New York City. A little history lesson will reveal that there were people walking out of Lehman Brothers with boxes, literally, as I got off the airplane. It was the beginning of the end, so to speak. I was like, “That’s it. I’m moving home. I’m instant boomerang.” There was little doubt in my mind that I chose the absolute worse time to move to New York City and work in finance. Couldn’t have picked any worse of a time.
But, I had found an advisor within Ameriprise, who was in his mid 30s that was looking to grow, and had basically reached a capacity constraint. Meaning, they needed staff in order to grow their practice. Being fully licensed and studying for your CFP, and having the experience and chops to just be able to make the following value proposition … And this is critical for people to understand, that this is a very viable way to get into this industry, which was building those admin and operating, being a well-rounded advisor. Okay, maybe I was too young and wasn’t ready to go out and get clients, and we’ll talk about that, but I could insert myself in anyone’s practice who wanted to grow. In or outside of my broker-dealer. I mean, I could have taken those skills and applied them anywhere. I was able to command a nice salary that could get me a beer on the weekends, pay my rent. I could do what I needed to do to grow personally and professionally in New York City, because I had built that capital for four years, working in my father’s practice and learning those skill. But, I moved up at, arguably, and awful, awful time.
Long story short, there, survived. Applied those skills. Clients were freaking out. Was able to talk them off ledges, and keep them focused. By 2010, the practice had its best year ever. But, I think that relationship had eroded. There was just a lot of stuff going on at that time, just personally. Right? Growing for me, growing for that advisor. And that’s when I left and joined another advisors practice, with the same proposition, in hopes that, you know, I could in this next phase, get to my ultimate goal of having a book of business of my own.
Real important point here, that was four years down in south Florida. Two years in New York City. Working through the recession, let’s throw that in there. That was six years of real experience as an advisor, and still not controlling my own destiny, still not at my goal of having my own practice. Although, afforded a lot of great luxuries that come with being in this field, from having a life. Great work-life balance, decent comp. But, yeah, that brings us like half-way through the story.
Hannah: Did you know from the beginning that you wanted your own practice? Like, did you know that you wanted to be that business owner?
Douglas: Yeah. Yeah. Not only did I know that, but I knew I didn’t want to be riding the coattails of my father. I’m a Scorpio, my ego won’t allow this. I wanted to do it on my own, and I decided, “I’m going to do it in the hardest place in the world to do it.” And, off I went. You know, I literally charted that course. Yeah, I knew I wanted to be a boss, or be a leader. That’s always been something that’s been a part of me. But, for the purpose of the listeners, that doesn’t need to be you to be successful in this industry. However, a lot of what we’ve been talking about in these first six years, for me, are almost an essential cookie cutter type process, that I think most people should follow to up themselves in a position to make that decision. Right? Like, again, six years, and still able to pivot to different options and opportunities within the field, whether it be a paraplanner, be a servicing advisor, go work at a private bank, and whatever comes with that. Or, continue to you can just focus on marketing. You could be an ops person, or of course, you can be a producer and be that full-fledged idea of a financial advisor or planner.
Hannah: A lot of people reach out to me, and I know they reach out to you as well, Douglas. And, one of the things that I hear, is there’s this frustration where people are working with another advisor, where they’re the assistant. Maybe, some of that frustration is because they are that entrepreneur, that business owner, and maybe in the wrong spot. Would you agree with that?
Douglas: So, you’re talking about the frustration that the junior has with the senior?
Douglas: Like, seeing eye to eye on getting to that advisor spot?
Douglas: Yeah, I agree with you 100%. I’ve had maybe four or five conversations with junior advisors, who, no questions, have paid their “dues”. They’re in year 8, 9, 10. Literally out of college started working with their senior advisor, and we’re just using these words for lack of better words, right? And, they have grown extremely frustrated in that. They’ve not been presented a definitive pathway to partnership. This is one of my central points, and one of the thing that I think is terribly wrong with recruitment in the industry, is we don’t have this universal pathway that is demonstrated to be successful at bringing young talent into the industry. It’s kind of the industry’s fault.
There’s all the ways that you can affiliate, whether it be through RIA, RIA conglomerate, BD’s, wire houses, brokers still exist. Right? And being a part of the FPA or the CFP board, we have to respect all of them, because these great professionals do exist in all of these. But, you know, it’s a catch 22. Not all of them are great at bringing talent. Particularly when we see the solo practitioner or smaller practices reach for talent and fail to show that young person, “Here is the pathway for you to get a seat at the table, for you to get equity or be a partner.” And you have a dedicated young person who wants to get there, it’s a one way ticket to frustration town, for sure. I have a lot of those phone calls. It creates, again, this environment, where now you have to have an ultimate conversation. It’s not comfortable for anyone.
Here’s an example. So, one of these phone calls was, “Doug, what do I do here?”
And I simply said, “Look, you know, you’re going to have to tell the senior advisor, ‘We’re at a point where there should be no question that I’m all about working here. I want my future to be here. But, unless you can show me and put down on paper, and agree with me that there’s a pathway for partnership, what percent, by when, what’s your role. I mean, really start to design this thing out, I have no choice but to tell you I have to go find another opportunity, because it’s not fair to me. And, it’s also not fair to you.'”
That’s a huge, huge, huge loss for that senior advisor. You can imagine, you know, training someone up eight years. Not just the investment, but their ties to the practice. The fact that you do want them to be your succession plan. Well, guess what guy, or girl? It’s your own fault that you fail to put it out there. There’s a lot of psychological reasons for that, you know, “I built my own baby, and I don’t want to really let it …”
You’ve got to get over that. What would you rather have? Your valuation of your practice cut in half, because you lost your succession plan, or someone to actually be a succession plan and figure out a harmonious way to do that. That’s a massive, massive problem that I see over and over again. And I don’t want to make it sound like it’s easy. It’s incredibly hard.
I’ve been kind of defending the young advisor in this case. Now, I’m going to go defend that senior and say, “I get it.” You’re going to invest in the 22, 23 year old for 7, 8 years. Millennials are flakey. The reason we’re flakey is primarily because we’re failing to see the pathway for growth, and often, unfortunately, we get maybe treated poorly. We just don’t want to work with jerks. Like, just don’t be a jerk. Just like, we’re ready, willing, educated, assuming you pick the right person, ready to go. And both sides have to come to the table.
Millennial, you can’t be flakey here. You have to think long-term and realize that … Take the page from my book. Six years. Four with my dad, two without, and then it was another two with another person. It was longer than that. I think, I’m like 13 years here. And just, literally last year on the 1st is when I broke off and started my own firm. Granted, I was operating in the silo at my previous firm for many years. But, you know, it took me from 19 to 28. Yeah, it’s a solid nine year to be comfortable and in a position in my life to say I had my own book of business, whether that was within someone else’s firm or my own firm.
So, back to that big problem. That, to me, is just a fundamentally massive problem with the industry. It’s being worked on. It really is. But, at the same time, it’s bigger than even me trying to solve it. It’s going to take a lot.
Hannah: Yeah, well it’s a mindset shift for our profession. And that doesn’t happen overnight.
Douglas: It’s a complete paradigm shift. Not to get too boring — I hope this isn’t boring — but to get a little technical with that, you’re asking … I get taken out to lunch with these large insurance agencies here in New York, like 400 agents deep, and they want to become RIAI’s because they realize they just can’t keep selling insurance for the next 10, 20 years, or they’ll probably be out of a job.
I ask them, “Well, how many agents do you have under the age of 35?”
And they’re like, “4 out of 400.”
I’m like, “Whoa, 1%, huh?”
And more importantly, there’s a problem there, but the bigger problem is going to the principles of that firm and saying, “Hey, are you willing to cut your take of the prophets of this business by a significant amount to invest and ensure that future of your firm is bright, by trying to change the course of this ship?” That’s a pretty big ship.
Now, scale that up to a wire house. No shot. You know, how do you move that vessel? You’re going to go, what, tell the shareholders, “Hey, we’re going to slash EPFs 50% so that we can make this very necessary investment, to ensure that our wealth management firm’s going to be here in 40 years.”
I’m not a cynical guy. I’m an optimist. I just don’t see it happening. I think that’s the biggest piece of disruption that’s coming down the pipe.
Hannah: Absolutely, so it’s a great time to be young, if you can survive.
Douglas: Yeah, ain’t that the truth?
Hannah: As cynical as that may be. So, let’s continue on with your career path. So, you’re working, now, with another advisor?
Douglas: Yeah, so, all right. We worked with dad. Went to New York, through the recession. And, we left that guy, and now we’re with another guy who, same deal. Bring over a decent amount of clients that I’ve had at this point, maybe 10 million or less in AUM that I’ve accumulated through various strategies. I remember in the height of the recession, I got a 0% APR teaser for 18 months. How I got credit during this time, I have no idea. I guess I had good credit. I bought like a million or two dollars’ worth of clients from an advisor who just didn’t have the time. Like the very bottom of their book. Like, “Oh, wow. I can make easy ROI on that and get some clients here.”
And you know, guys, don’t treat clients like that. Don’t treat them as bargaining chips or transactional, there’s a process here in transferring relationships. I’m sure that’s been talked about. A conversation for another time.
But, alright, we’re with our now third advisor. It was the same deal, same situation. They had plateaued, they needed staff. Now I’m a CFP. Now I’m applying for business school. This is a big part of the story, because here you are in New York City. You can’t go to your chamber of commerce and network like I did down in south Florida, which was super effective. I got very engaged in my community down in south Florida. If you’re in smaller towns, do that. Go to your chamber of commerce events. Find your young professional network, and be consistent. It’s going to go a long way. Again, just be consistent.
But, here in New York City, that’s no really something you can do. So, business school, and spending like $120,000 seemed like a no-brainer. I say that tongue in cheek. Massive investment, right? But the idea here was, “Now I’m 26, 27, I’m going to need a network, ideally of peers, that can help carry me into the next 10 years of my career.” I viewed that as an essential thing to do. Look, you don’t need to go to business school to do that. But, I also wanted to get some of the pedigree of going to a top program.
I was fortunate and worked hard enough to go to NYU Stern School of Business. At night time, wasn’t walking away or taking out extra loans to support my life style. I still was grinding and still building the business. That was a lot of hustling for sure. That was three years on top of continuing to grow, and I became more successful.
By the way, I hadn’t quite gotten to shifting the focus to Millennials here. I’m still doing things in a very traditional way. Lucky for me, again, growing up in Boca Raton, Florida is the equivalent of growing up in 1941 New York City. That’s just the demographic down there. So, I’m very comfortable speaking with 80 something-year-olds, as I am 20 and 30 year-olds, and that lent itself very well to actually being successful at something that’s very hard to do, which is a 20 or 30 something-year-old relating to a 60, 70, 80 year-old. I’m not a huge fan of dedicating all of your marketing power to that. It’s such a mismatch. We’ll get to that when I get to the epiphany moment, to go after Millennials, or to court them and build a business around that.
So, it was, now we’re doing all right building. Being still full-time staff. Something also very interesting happened in the middle of all of this. I got married. That was super interesting, at that point. And keep note, I think this is worth mentioning too — and I’m all over the place — but, keep note of, nothing is stopping me, here from my life, from my personal life, from moving forward. There’s going to be marriage, kids, buying homes, the whole bit. The whole bit. And think about risk, and lifestyle, and all of that, as this story is told.
At that point, at the beginning of business school, my then partner decided that we were going to leave Ameriprise, and he wanted to buy a book of business. A quick way to double up, so to speak, at least the size of the amount of money we’re managing at the time, and the amount of clients. He had found someone selling, and he asked me. He told me up front, this was good of him, told me up front, “Hey, we’re not going to stick around at this broker-dealer forever. The goal is to buy a book. Would you be willing to deal with that, should it come up here?”
I was like, “Yeah, absolutely. It’s fine.” I viewed it as just an opportunity to grow professionally. I viewed it as an opportunity to perhaps strike a deal and get clients. That came up within a year, and we left Ameriprise for Commonwealth, as fertile soil. Not just to bring our respective businesses to, but to also acquire that book of business. That whole adventure, and the mechanics of that, is perhaps for an M&A class in the financial services industry. We’ll put that off on the side.
Yeah, so that brings us up to this point where we’re leaving. So, we’ve done that. I’ve been there to help buy a book and facilitate that. Amazing experience to get. I did get some equity for doing it. I did have to buy into that. And it was a nice little addition to what I was organically growing on my own, while getting married, while in business school. This was a very busy moment, to say the least. I think Hurricane Sandy hit New York during that time. I was re-papering an entire practice, in my living room. There’s a nice visual there, I’ll spare you all of.
But, sure enough, through the storm, that’s what we were up to. That was extremely successful, and extremely smooth. And that’s simply because we did some good planning there, and I was really doing a lot of heavy lifting. Again, all of that experience coming to a head to be able to move one practice from point A to point B. That might be the longest hours I’ve ever worked in my career, those months leading up to and after leaving our broker-dealer and going to Commonwealth. Yeah, we both got pretty sick doing it. So, keep your energy up.
Hannah: So, from a perspective. Can you give us any scale of how big this practice was that you guys were buying, or merging?
Douglas: Yeah. That time, together, we were around 60 million in assets. Probably 150 households, I want to say. And, we were about to buy another 60 million in assets, so effectively doubling up our size by assets, and client accounts too, for that matter. That was one question I always had out there, for my previous partner was like, “How are we going to handle the new capacity? Forget AUM, just servicing clients?”
And, that’s something I was told, “Don’t worry about that.” But, how can you not, when it’s just you and him. Someone’s got to do the work.
Hannah: That’ll be your job.
Douglas: Right. And hence, that kind of went into the negotiation of … I’m being very candid here, in my mind, this deal could not have happened unless I was fully involved in it. I don’t think the seller would sell, and I don’t think it could actually be executed on. So, here’s a lesson, everyone. This was a moment in which I gained a ton of leverage. Someone, my boss, wanted something very bad, and it can’t happen unless I was in on it. I viewed that as an opportunity to negotiate something, so I did.
Hannah: And, so you’re-
Douglas: And that was in-
Hannah: Go ahead.
Douglas: No, no, no. Go for it.
Hannah: I was going to say, so you had equity in that process as well?
Douglas: Yeah, I ended up with 5% equity of the pre-purchased practice. And I was able to buy it at one times it’s re-occurring revenue over a 12 month period. The earnings of that piece of business paid for itself and then some, so it wasn’t really … You just had to work it. It wasn’t really a drain. It was actually cash flow positive. So it was a no-brainer. I argued, I think, I started with 10%, all sweat equity. And we ended up at 5% one times. So, hey, that sounds to me like the middle. Truly was the middle, and it was enough to motivate me to do that.
Pretty chaotic time, but the acquisition and the merger, and the changing of broker-dealers was very successful. Like, 97% retention rate, which is ridiculous. Anyone who didn’t come is arguably someone we didn’t really want to come, so that was cool too.
Now, I’m halfway through business school, and my thinking the whole time here was, when I went into business school, was, “How am I going to get this to pay for itself?” I measured it down to the clients, and types of clients I would need to acquire to arbitrize the student loan payment waiting for me at the end of the program. I figured that if I couldn’t get to $30 million in assets by the time I graduated, which was like 30 years of age … I had this mantra, 30 by 30. I wrote it down. It was on my desktop, it was everywhere. That was the goal, and it was kind of arbitrary in many ways. It sounded great, but I also felt like that was, and knowing my margin on that, that was enough money to be able to invest in my practice the way that I wanted to.
About a little over halfway through business school, I hit that goal. It came by just one whopper of a connection, a personal connection, and a very large client. Which, I never thought … it’s just right place, right time, right skillset, and I took advantage of that and found myself in a very unique position. It was at that moment, kind of simultaneously, I had the epiphany that if I’m really going to differentiate myself and be somebody in this field, it’s not going to come by doing what everybody else was doing. Here’s the soundbite: My whole career was being told, and people are still told this today, “Go out there and follow the money. That’s the rollovers, and the retirees, and the Baby Boomers. That’s how you’re going to get your AUM up. That’s the model you’re playing.”
The whole time, I’m thinking to myself, “This sounds like the worst marketing program, ever.” You’re in your 20s or 30s, and you’re being told to go relate to someone in their 60s or 70s. I said this earlier, it just does not make sense to me. What makes this very hard, is that you’re in your 20s. You know how many years for me, from 19 to 27, my peers, my friends, the people I wanted to help, were fairly useless from building a practice standpoint. It was tough, and I think that’s what a lot of young advisor face. Where I had the ability here, to invest long-term, was the fact that you’ve heard this story, and it got me to a spot where I could then take the revenue that was being generated on this book of business of mine, and now focus extensively on going long.
That was with Millennials. Hearing that word didn’t resonate with me in the beginning, but it wasn’t going anywhere. It’s everywhere today. This is now four or five years ago. I said, “You know, if you can’t beat them, join them. Actually, you know what, I can market around this. Actually, this is a brilliant idea.”
Then, I started looking at the mechanics of it. This is where business school really came in hand. And, again, you don’t need an MBA to acquire this knowledge, but for me it was helpful to see the marketplace in a whole new way. All I needed to do was invest in my generation and find a story with it. The story was watching my wife, Heather, go through law school through the recession. So much of this story was just written about in a book we wrote together, the Millennial Money Fix. If you really want to check this out further, you can pick up a copy of that. (Shameless plug.)
But, you know, watching her and my peers, older Millennials come out of the recession with multiple six figures in student loan debt, there was an opportunity to actually create some real help there. We’re talking about, super hard-working, smart young professionals. It was so obviously to me that these were the folks I wanted to be working with in the long-term. Relatability was there. There weren’t competition. What competition? There just weren’t 29, 31 year-old advisors with a decade of experience.
To me, it was just like, “Wow! I can clean up, and there’s market share for days.” Even if there was competition, there’s plenty to go around. It’s underserved. There’s numbers on your side. The barriers to entry are so high for young people to get in. That was my epiphany, and I’m like, “Ah-ha. I’m going all in on this.” And friends of ours had the same epiphany. My twist was, “I’m going to do it in New York City, and I’m going to do it for the top, top, top, top level of young professionals out there.” Not that that cream of the crop doesn’t exist elsewhere, but look, it’s New York City. I have numbers on my side, is really what I’m saying. I could play a segment of the market, that for many would be like 12 people in their town. For me, it’s like hundreds of thousands. So, there it was.
There it was. I had the financial resources. I had the chops and the experience. I had the credentials. I had a story. Now, I just needed a brand. And that’s when things got so fun. That’s where I just realized this can be a blast.
We can keep going here, but that brings us up to, that was maybe 3, 4 years ago.
Hannah: So, you’re working within your broker-dealer. Did people think you were crazy, who you were working with? What was the reaction that you got?
Douglas: Yeah, yeah. My then partner, kind of came into my office one day, and I remember the conversation. It was, something I had mentioned a few years back, which was my concern that if we kept growing by acquisition, there would be a capacity constraint, and really the only advisor there to alleviate that was me. The funny part was, I was game to do that from the day we left Ameriprise. Not even for equity, for revenue, of course. I just figured if we were going to keep growing, we needed to divide the servicing a little bit more equally, so we both had capacity.
That never happened, so of course, two years later, there was a capacity constraint. And now, I’m being offered the management of $20 million in assets. I’m pretty much a 50/50 split, no equity. Do the math. That’s some pretty good revenue. I had already had my epiphany, which was, “No, I’m not going to invest my time.” The demographic of that $20 million was 100% not young professionals and the people that I had an affinity towards, and related to, and was passionate about. That was your standard Baby Boomer makeup. No it was not the prime clients of the practice, either. They were probably the most time consuming ones. So, I turned it down.
You know, I got a reaction that I think a lot of older advisors would give, which was, “In what world do we live in, where a junior advisor, or someone younger could turn that down? That is just horrid. Who are you to do that?”
I just remember thinking, “Well, that $20 million has an MPV,” and I was doing finance here, in the back of my mind. “That’s going to zero.” And probably not. You can work it. Get referrals, get the kids. There’s a lot you can do. But, I’m thinking primarily about the handholding and the time consumption that would be taking me away from what I really wanted to market, which was my peers. And I said, “Okay, well that MVP is closer to zero than not. Versus, I’d rather work my brains out to get $5 million worth of assets from the demographic I want to work with, because I know that 5 is going to turn to 75 over 20 years.” That’s just all made up numbers, but that’s how my logic checked out.
I just remember it was an argument. Stormed out of the room. And I just said, “You know what, that was a defining moment right there.” That’s where I realized that this is what I’m going to do. I just backed it up. I haven’t looked back since. It also might have been the beginning of the end of my time in my previous firm, which is really no surprise, to be honest with you.
I started to build the personal brand out from there. So, we can talk about, if you would like to, how I built a brand within another practice. Like a brand within a brand. I think this is such an awesome, viable strategy a lot of senior, or older advisors can use with their younger, if their egos can withstand it. And there’s lots of ways to share, too. A lot of companies do this. It’s just segmentation, and it might be a smart idea.
I started with just a way to capture press. I was very good at getting lines in articles on Millennial type … So, listen to me, everybody. It’s easier than you think to go help a reporter and get a line. Just don’t say, “Hi, I want to help you.” Maybe, pitch an idea. Use social media. Use the internet. You can find out what reporters are reporting on, and you can reach out to them via Twitter. You can do that. It’s crazy. It’s a numbers game, too. I was getting good at that, and I wanted a place to post this. I knew online marketing was going to be at … it’s very apparent that’s the way it works. Like, if you’re not on social media, and you’re not taking advantage of internet marketing for whatever your business is, you’re not going to be around. It’s very matter-of-fact about that.
But, I decided to do this brand-in-a-brand and create this press page, which kind of slowly evolved into my brand. I took a selfie, it’s embarrassing. I took a selfie. My logo is my hair, and it’s always been … it’s a bouffant, and it’s always been something to talk about, whether I was a teenager where I had like a Polly D blowout, maybe I’ll share that photo someday. Long before Jersey Shore, mind you. So, I carved out my hair in Paint, and the logo was formed, and it’s still the logo today.
Hannah: So, did you just have a website that you just started that was your name with your press … Like, what did this look like?
Douglas: Yeah, it was douglasboneparth.com and I built it myself on Squarespace. Beautiful templates. I had a ton of fun doing it. It was easy. It really was. I made my logo. Took some pics around the office. Picked a color scheme.
I’ve always been good with technology. We were talking about this beforehand. That’s one of my strong suits, is just always being very savvy with technology. I’m that guy you call into your office to fix your computer, and I hate you for having me do it, because it’s not my job. But, I’m that guy.
Yeah. Squarespace, my camera, content. It was just easy to do and I set that up. Sure enough, there it was. Obviously, it was all compliant, and was affiliated with the firm at large. It linked back to it, and I made a strong argument, like, “Let’s have these two sites communicate with each other. We can brand within a brand.” That never really happened. Just another of those things that aided to the ultimate departure from the firm. But, yeah, you can do that.
I didn’t even have the idea to win my local market, at that point, yet. I didn’t know that, that’s what I was doing. That was just really, the beginning of creating an online presence, and capturing the media.
And content we were making. A blog, obviously, came then too. I think it was just like About Me, and a bio. A blog, my press page, and Contact Us. That was it.
Hannah: So, all of this is within a broker-dealer? I hear so many people say they can’t do things like this within a broker-dealer.
Douglas: Yeah, so hats off to Commonwealth, because they rock, and they let me do this because they’re a technology firm. They see the future like I see the future, which is extremely rare. You can’t do this at Ameriprise, at a Raymond James. You get cookie cutter type online presence. I’m very lucky to have landed where we did. So, props to my former partner for picking a real winner out of the BD space. Otherwise, RIA or IAR only is going to be the venue for you. But, yeah, my BD is one of those few that let you build out whatever you want, and make sure you adhere to FINRA/SEC standards, and just get it approved. So, yeah, that’s how I was able to do that.
Hannah: Okay. So, you ended up splitting with your firm, but you stayed with Commonwealth?
Douglas: Yeah, that as huge. That made for what I think is the most seamless departure from a firm. There was no re-papering of anything. I just literally picked real estate. It was all marketing and branding, and finding real estate, which is a big deal here in New York City. So, that was really the biggest blessing.
Clients were communicated what was going on. One staff member particularly wanted to come with. I let them pretty much figure out how they wanted to exit. That was tough, but it was amicable, my departure anyways. Yeah. Called up the broker-dealer. They had a whole SWAT team available to help make sure that this went smoothly. We made it very easy for them, and December 1st was the launch date, last year. So, we’re talking-
Douglas: Yeah, we’re talking here, by the end of the week. On my daughter’s birthday, nonetheless. My wife is not thrilled when I’m like, “Oh, right. It’s Bone Fide Wealth’s anniversary.”
She’s like, “It’s your daughter’s birthday.” I’m obviously just pulling her chain there. But, yeah, we’re coming up on one year. There’s a lot of stuff between building that personal website … and actually, I guess there’s not. There’s this really kind of a cool follow through to the end of the story here.
After building that site, I just kind of kept going. Then it was a game really of, then I did have that moment where I realized I need to compete from an SCO ranking point-of-view. If I could build this machine, this internet marketing machine that actually generated traffic to the website, to the bio page or the Contact Us page, and created the funnel, and could get prospects. Not just quantity, I mean quality. I wanted to get the people I wanted to work with coming through that funnel, and coming in for consultations, and ultimately becoming clients.
I remember the day that first one came in. All right, listeners, it was a year or two of just dedication, and patience, and grinding before that came in. Certainly, very hard to win my local market here, and I’d successfully done that. It was huge. It’s been refining that ever since, and figuring out what works and what doesn’t. What of your content is good? And what of your content’s bad? And experimenting.
Hannah, you and I were talking about the videos I was putting out, and it’s really just me tinkering. There’s nothing too organized about it right now. I’m just experimenting with that. But, the blog is weekly, the newsletters monthly. The 160+ media clips and features all have link backs to the newsletter signup. All of the things that, as you start building your own internet marketing machine … I left out the distribution channels of social media, LinkedIn, Twitter, Facebook, for us. They all go hand-in-hand. They’re all part of this massive marketing plan and personal branding for the business. Not even personal branding, but the business’s branding. It’s such a big beast now, and all of these moving parts. It’s just, again, this area that I have a lot of fun with.
A tip I would give anybody is, if you don’t find that piece fun, like you don’t find building the brand and building the business fun, I strongly urge you to think about what you want. But you like this profession, I strongly urge you to think about what you want you to and who you want to be in this field. It’s okay to not want to be that full-fledged entrepreneur building your own brand and getting clients and running your business. That’s cool. There’s plenty of avenues to go down. This is just my way of having done it.
Hannah: Yep. So, when you made that switch, were you able to bring clients with you?
Douglas: Yeah. One of the most important pieces of leaving my last firm and creating Bone Fide Wealth, and staying with my broker-dealer is that I pretty much existed in a silo from day one. Meaning, my clients were assigned to me. There was no partnership agreement. Commonwealth viewed me as my own financial advisor. Those clients were mine.
By the way, we didn’t talk about what kind of legal documentation and agreements were put in place with me and my then partner. Everything was always mine, literally, from when I moved up from Florida. The deal that I was striking with my employers was that any time I got a client, I had 100% equity in them. I think that’s, you know, “How audacious of me?” The reason I earned that, is because of the four years. I could be plugged into their practice. No one spent a dime training me. The only person who’s ever trained me is my dad, and that is nine years plus ago.
So, am I saying something about how hard … Yeah, I am making a comment on how, perhaps, there’s a pretty big managerial problem in the industry. I believe that to be true. I kind of had a school of hard knocks way of being managed. I really just did that myself. Put myself through business school, took a lot of management courses. It’s one of my specializations, actually, because I’m infatuated with management for the fact that I was never managed. So, yeah, that’s a really important point.
From, “Did the clients come with me?” Yeah, yeah. No one had to do anything. They were always mine. Literally, it was flipping of a switch. Now that, that could have been very interesting, had it not been that. I’m sure a lot of young advisors who find them self in the position where the clients are that of the firm or of their senior. Oh, boy, you have whopper of a convo if you’re leaving and you want the intention of taking those relationships with you. That could be interesting.
I tend to be of the belief that clients are won by relationships, not by firms. So, if you have the relationship. Would that person want that client, if they don’t even have the relationship? It’s probably not going to look good on them, either. But, It does get pretty messy there, right?
Hannah: Yeah. And, so for people who want to know more about that, we did a podcast episode, what we wish we knew before we left. We had four advisors talk exactly about that: The contracts and what are you signing when you start with a firm.
Douglas: Yeah. I would say, “Go listen to that.” Because, I kind of baked in my own safety net from day one. Again, remember how I keep talking about that competitive advantage of being so young in doing this. I had a little bit of leg up. My dad was a fellow. A really, really amazing business man, engineering mind, actually. He was good at it.
Hannah: So, let’s talk more about this marketing. One of the things, we were talking a little bit before this podcast aired, but can you talk a little bit about, what does your day or week look like? How much time does marketing take for you?
Douglas: A lot. 40, 50% of my day is spent marketing.
Hannah: What do you mean by that? What does that look like?
Douglas: So, granted, a lot of this, my staff, Marie, is capable of assisting with and working on. But, if I break it down into original content, stuff we’re making, whether thinking of our next info graphic, or free piece of content we want to give away … We have a download section on our website you can check out. The only thing I’m asking for is your email address, and yeah, you’re going to be enrolled in our monthly newsletter. Opt out if you don’t want it. But I’m giving you amazing free content to literally get you financial planning ready. It’s crazy. It’s the most value out there, I think, that you can get for free, without having to pay a financial advisor. You’re welcome.
That’s first-party content. Our blog is first-party content. Our newsletter. My wife and I wrote a book we talked about. Talk about, you know, that was a huge, huge time commitment, over 18 months. That came out in August. When I say 50% of our day is marketing, excuse me, that was just first-party content.
Then, you’ve got third-party, right? Third-party would be relationships with the press and the media, whether it’s getting to the studio to catch a spot on Nightly Business Report, or a news program. A lot of it’s really written, working with editors and writers at all kinds of media outlets. We’re approached now, after having written the book, by places like, you know, I work with Fatherly, as a writer for them, to create financial content for dads, which is super cool. Everyone comes to us now, which is flattering, and an indication that we’ve been doing the right things. That’s third-party, and a little bit of first-party content.
Then, there’s the social media and SEO part of things. Social media being our distribution channels, getting what we’ve made or someone else has made with us in it, and distributing it out the right way. There’s a whole game to play there. Data is your friend. You can see when you should be posting things, what hashtags work, what videos, or columns, or content, specifically, are the winners. Then, the SEO thing, which is really like the overarching piece. Working on getting link backs, and your name in …
Everything you’re doing is contributing to that singular thing. That’s where you’re earning the business, and it’s the reason you’re creating all that content and you’re spending all time marketing is to get that traffic, earn that traffic, get it in your funnel, and get a prospect to turn into a client. Boom! Sounds super easy. Yeah, right. That’s five years of non-stop grinding and hustling and working that machine, to get it here today, where it works.
We’ll get two to four high quality leads or prospects from all of this activity. Think about that. Even if it’s two. Let’s go to the low end. Two times twelve is twenty-four. Twenty-four clients you want to work with. Poof! Out of the internet, because of what you’ve done. My minimum financial planning fee is right there on my website. It’s there for a reason. It does a good job of weeding people out. But, 24 clients a year. I do that three times. That’s 72 clients. You can’t do that forever. You’re going to have to hire advisors, or scale, and that’s a whole other conversation.
You don’t need to get five to, people are like, ten referrals a month. Wow! Ten referrals a month. Wow! That’s 120 in a year. How is that going to shake out? It’s great, don’t get me wrong. If you want to do quantity, be my guest. But, I’m more focused on quality.
Hannah: Let’s talk a little bit about, when you get these new Millennial clients, how are you working with them differently than you did with the other clients that you’ve had in the past?
Douglas: It’s relatability and where you are in your life. I’m 33, so it’s settling down, having kids, getting married, buying homes, dealing with student loan debt from graduate programs and undergraduate programs, negotiating jobs. I’ve been there on a lot of those things. I can lead by example. I have a lot of clients and a lot of stories to pull from. I can really give relatable advice on those areas, and that’s what my clients want. They want relatability. They don’t want someone that reminds them of mom and dad. It’s not the feel that they’re going for. I’ve made myself available, and I’ve marketed myself into that space, to be searchable. That’s what’s going on there. It’s not crazy. It makes sense. Again, relatability is huge. That’s what the whole marketing idea that I had was about, is that facet.
Hannah: And then, you charge an upfront financial plan. Are you managing assets in the backend, or how are they paying you?
Douglas: Yeah, so the goal here is, you lead with financial planning. That is where it’s at. You want to deliver value to your clients, do financial planning. You lead with that. Investments products, all of that, second. I’d say, third. Saving them time is second. That should be part of everything. For example, with investments, okay, it’s a commodity now. Same with insurance and products, they’re commodities. My hardworking clients, they don’t have time to even click on rebalance in their betterment portfolio. They don’t have time for that. That’s why I can win there, on saving them time. But, there’s only so much value there, so you go over to financial planning.
On that download’s page, you can check out, “What does your financial advisor do for you?” Oh my God, look at all those areas of value that you can generate. You start with a written financial plan. You want to get that deliverable there. Quarterly service model is where I’m at. Start at $1950 for a financial plan. That’s starting. And then, once you deliver your plan, you’ll have your recommendations there.
My goal is to help my clients make informed financial decisions when it comes to their money. So, when we’re going over what the recommendations are, there’s no hard sales here. It’s, “Here’s what the recommendations are.” Is it investing, it is insurance, it is getting estate planning done, is it going to hire an accountant? How you want to execute on that, I tell you what your options are, “You can do it yourself, you can do it with me, you can do it with another advisor. Let’s talk about all of those options and what they mean to you, and help you make a decision.”
I find that to be very effective. We’re at about 70+ million in assets under management at the firm. With, I think, the capacity to do double that. Yeah. Those are the metrics here.
Hannah: That’s exciting. And it’s so exciting to realize what opportunity there is for serving our peers.
Douglas: Yeah, there’s a huge opportunity, and I think something to really point out with those metrics are, we can dive deeper. We’re not going to right here, but these are … What’s so great about it is, the vast majority of this are people that I want to take care of, and I’m passionate about, and relate to. They’re hardworking, young professionals here in this city and the surrounding area, as well. I feel like we all get it. We all have the same challenges, and it’s just like, to me, that’s the dream come true. Right?
And look, I serve very wonderful, wonderful Baby Boomers and Gen Xers. The book is very diverse as well, and they’re truly wonderful people. Most of them are high net worth, or ultra-high net worth. They love the fact that I’m putting my passion in. They’re getting the best service out of me, no doubt. That’s my offering to them, while I go do this long term play, is I’ll never forget that a lot of them are heavily weighted clients. But, that’s just good communication, making sure that the people who love you, and support you, and work with you know what you’re up to. They love seeing me on TV. I don’t say that to brag, but you’re worried about marketing to Millennials when you got a 70 year old client with several millions of dollars under management. They’re like, “Oh my God, where’s the love?” No, no, no. You got them in a spot where they want you to do well. There’s no doubt about that, and just remember you got to give them the service and take good care of them. Don’t ever forget that.
Hannah: So, as we wrap up, do you have any final words of advice, or thoughts that you want to be sure our listeners have before they leave the podcast?
Douglas: I find myself stealing a lot of Gary Vaynerchuk lines, and we talked about how my big goal is to be the Gary V of personal finance, or even 10% of that. So, to steal one of his bits of advice, is “Patience.” I’m a very impatient person in my life, in general. But the one area of my life I chose to be patient was here with my business. Here we are, 13 years later. 13 years of success, failure. Of contemplating not doing this. It’s been quite the ride. But my patience in knowing that, “Hey, I want this to happen for myself.” That’s the big one. I think for a lot of young people, they don’t realize how much time and dedication, and energy goes into becoming a successful advisor.
You’re in your 20s, you’re going to have to put in that time and be patient. Just make sure you’re on the right path. Focus on what you can control. But, yeah, patience is the one. If you’re young, you got time on your side. Use that to your advantage and figure out what you want, and how you want to grow, and how you’re going to carve out your pathway. I’m just one story, you know.
Hannah, you and I were talking about how we both wish young advisors would never have to go through our respective paths. I agree with you. I really do hope that in the future, young advisors can come out of their program in college, and literally jump into a proven path to get whatever it is that they want out of this profession. Because God knows, the profession needs them. I hope we get to see that. Patience will get you there.