In a Nutshell: Growing your business — especially during a crisis — depends less on your ability to manage money than it does on your ability to become an important part of your client’s story.
Guests: Arthur Ambarik CFP® is the CEO of Perigon Wealth Management, which currently has $1.8 billion in AUM. Rachel Elson has recently transitioned from a career as a personal finance journalist to working as a Financial Planning Associate at Perigon.
My Key Takeaway: In order to make you and your services major players in your client’s financial narrative:
- Do what other advisors don’t. Find those pain points like helping family members or advising on a potential career change that fall through the cracks of old-fashioned advisory.
- Be your client’s friend. And remember: friends do things for each other because they genuinely want to help, not because they expect something in return.
- Look outside the box when you’re searching for talent. Money managers are a dime a dozen. Caring, curious, motivated people who are excited to learn the ropes are gold.
1. Why Arthur and Rachel replaced traditional discovery summary letters with personalized financial narratives.
2. How your quality of service trumps your asset management when it comes to getting referrals and winning new business.
3. What Arthur has learned about balancing CEO-level responsibilities with client service responsibilities.
Complementary Episode: Pair this with my conversation with Mitch Anthony in which we discuss why getting the most client stories is now more important than getting the most AUM. Listen/read here.
Resources Featured In This Episode
Values Clarification Toolkit Click here to download this FREE tool and start living your values.
Steve Sanduski: Rachel and Arthur, welcome to the show.
Rachel Elson: Thank you.
Arthur Ambarik: Thanks for having us.
Steve Sanduski: Well, this is going to be fun. This is a little bit of serendipity because Rachel, you and I have known each other for a number of years-
Rachel Elson: Wow.
Steve Sanduski: …back when you were at Financial Planning Magazine and we’re going to get into that here in just a moment and when we notice that we’re both going to be here and we’re chit chatting here a little bit earlier, I said let’s get you on the podcast because you’ve got a very interesting story to tell as does Arthur with the new firm that you’re working at. Let’s just start with you Rachel-
Rachel Elson: Sure.
Steve Sanduski: …and tell me a little bit about your background, where you were and where you are today.
Rachel Elson: Okay. Well, I started out as a personal finance journalist. I did that for a long time and came time to make a change. A few things. I wanted to come home to California where there wasn’t a lot of journalism and I’d been doing the same job for a very long time and people get into journalism to learn something new every day, every week. I just heard a boss of mine say he got into it to learn something new every month because he worked at a monthly magazine. I wanted to do something different and I wanted to be in California and as I had been around financial planners for a long time and I thought those guys, they’re kind of my tribe. Those are good people.
I came to San Francisco and I started… the only way I know how to learn things is you just call people and ask them if you can ask them questions. I did that and I informational interviewed at a ton of places and talked to a lot of people and the conversation started out as should I do this? And after a while they migrated to tell me about your firm and how you do things. Meanwhile I signed up, I started taking my CFP classes at UC Berkeley Extension, which is amazing and mid summer really I wound up starting part time at Perigon Wealth and have been just loving it and we just made it official. I just came on there beginning of February.
Steve Sanduski: Well, what I find fascinating about this is with your journalism background, that’s how I first met you, is I would pitch articles to you when you are the editor at Financial Planning Magazine and you’d come back and you say, well give me five different ideas. I think some of these had been tried before and so I’d send them, you’d say, well I don’t like this. I don’t like that. Maybe on this one, but you got to rework it. Make a couple of these changes and send it back to me and I’m like, man, you’re tough and-
Rachel Elson: Tough love.
Steve Sanduski: Yeah, tough love. I mean that’s what a great editor does. Is they make the writer better and you definitely made me a better writer.
Rachel Elson: Thank you.
Steve Sanduski: As much as I didn’t like it at the time, I now look back fondly on it. So thank you for that. But I’m curious as you think about your journalism background, so you were writing about financial topics, you were editing financial advisers who were writing about financial topics and now you are one. What are some of the skills, the learnings that you think you’re going to be able to transfer from being a journalist writing about this to now being a financial advisor who is actually implementing this with real humans?
Rachel Elson: I’ve been thinking about this more and more. One thing… I mean, I know how to interview people. I know how to ask them questions and when you’re bringing on a client, like I know… I can sometimes hear what they’re not saying as well as what they’re saying and I can sort of feel where the story is. I’m just drooling which is not helpful.
Steve Sanduski: That’s good. I can see your gestures.
Rachel Elson: But you can figure out what the arc is and what their story is and what their goals are and what it is that they want to do, and I think that’s really valuable. I’m not afraid to ask people questions that sort of push a little bit to find out a little more. We do something at our firm where after a client comes in for their first real intro meeting, we’ll create a financial narrative and we send it back to them and it’s really, hey, we were listening proofs, but we really want to be able to tell their story and so we basically are reiterating… we’re taking what they said and sort of saying it back to them to make sure we all understand each other and that they know that we’ve heard what their goals are, what they want to do, et cetera and so I’ve taken on doing a lot of those just because it’s easy and it’s fun and it’s nice to sort of pull that together and it doesn’t cause me any stress because I spent my career being a writer and editor.
Steve Sanduski: Some people will say, well, we send a summary letter after the first meeting with a potential new client. When you say financial narrative, is that what some people would call a summary letter from the meeting or give me an example of what’s in the narrative.
Rachel Elson: I feel like I should ask Arthur about this. Is that what other people call summary letter?
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Arthur Ambarik: I’m not sure exactly what a summary letter is. We call like a journal or a narrative and it comes from both qualitative and quantitative side. I think the profession has changed a lot over the years, right, from its infancy where there were brokers and people came to financial advisors simply to have them manage their investments and right over time now people, they’re very… our clients are very busy. They don’t have times. They want to work with somebody that they trust. Somebody who understands them, and so just as Rachel said, the important part is that coming out of that meeting, they understand that we listen to them and understand their goals and objectives and who they are.
And the narrative it can be… It can get pretty granular about their families, what they want, their jobs and it’s really less, I would say, financial focused if you will, and more about their lives and obviously Rachel’s background helps us… is very helpful in terms of writing those.
Steve Sanduski: Is it written in like a story form, a narrative or is it more, you indicated that this is your goal and that’s your goal and that you have three children and you want to leave X amount of money to the child, or is it more a story type narrative?
Arthur Ambarik: Yeah, I would say it’s more of a story where we talk about their lives but also their experience with their finances and what they’re looking for in an advisor which is… it’s different for different people. I mean it’s… Some people come to you and they just want to retire next year, right, that’s what they’re looking to do and so what they’re looking for is much different than somebody who comes in and says, “I want to make as much money as possible because I want to be able to help my family.” I always use a story of actually who’s… someone who’s my biggest client now who came in and she said, listen, I have an advisor now and he’s done great, right? He’s made a lot of money for me, but I have a sister and this sister whose husband passed away in Iraq and here she is trying to pick up the pieces and her only goal was to help her sister. She said to us my advisor refuses to talk to my sister.
So we walk out of the meeting, but the sister didn’t have much money. The person we work with obviously was much more successful than her sister and so we walked out of that meeting and Danny who works with us, another CFP said, I don’t understand Susan … she says, her advisor’s doing great. What are we going to do here? And we said, we’re going to call her sister immediately and we’re going to make sure we help with what is her crux issue, and so writing that narrative lets her know that we heard her and our focus is going to be doing what she’s asking us to do.
Steve Sanduski: And is that narrative in the first meeting with a potential new client like this… is that part of the discovery process? We have this first meeting, we ask all these questions, we get their story and then we turn around and write it up in the narrative and sent it back to them and you basically say, this is what we think we heard you say. Do you agree or is there a like a follow-up once they get that?
Arthur Ambarik: Yeah, it’s a good question and that’s exactly the process. The first meeting… I remember when I first got in the profession, we would ask clients to bring all their financial information. Bring your seven years of tax returns and your statements and then that’s what would lead the questions in the meeting. You would just ask about that. And then I realized like, it’s pretty intrusive. You don’t even know these people yet. We should have a meeting where get to know them before we get to that stuff. Oftentimes we don’t actually do and sounds interesting our data gathering until after our clients have decided they want to work with us.
Steve Sanduski: Okay. Now that’s interesting because I talk to a lot of advisors. I talked to one today who said in that first meeting we asked them to bring their statements. We asked them to bring the tax return and for me, I’m like you. I was like, boy, that seems like a big ass for that first meeting but a lot of advisors do it and a lot of them do it successfully but in your case you’re saying, “Hey, just doesn’t feel comfortable to me and so I’d rather have more of this discovery that’s more of the narrative first.” Is that what you’re saying?
Arthur Ambarik: That’s exactly right. I’m not saying there’s a right and a wrong.
Steve Sanduski: Right.
Arthur Ambarik: It depends on your niche. It depends on what you do for your existing clients and because what’s going to happen is… the whole niche thing is you build a service model around a certain kind of client. That client consumes that and then they refer more people like them and this is just what I’ve found the clients that we work with, that’s what they want. They don’t necessarily want to send you all of their financial information until they get to know you. It’s usually a strong referral and I think the referral isn’t, oh Perigon makes more money than anybody else or Perigon has the best investment products. I think the story that our clients tell when they refer other people is Perigon cares about us.
We want that person to know that we’re listening to them and that we care about our clients before we get into.
Steve Sanduski: This idea of, we care about our clients, we provide great service. I hear people talk about that and I was in a session earlier today and a guy says, service is a commodity. You can’t differentiate yourself on service because every advisor says, well, we provide great service and so I’m curious, when you talk about we care about our clients, how do you display that? How do they feel as a client… If I’m a client of yours, how do I feel that you care about me?
Arthur Ambarik: Yeah. That’s an interesting one because one of my early clients told me, “Oh, why don’t you just tell people how much you care about them?” And I’m like, I can’t do that. You can do that. But if it comes from me it’s going to be… it’s pretty disingenuous. I really care about people so I need you to go around telling people that first of all, but again, less about a right or wrong and more about a niche and serving a certain client base. I think our clients are really… we happen to have a set of clients, a lot of tech executives in the Bay Area who are very busy people. Okay. And they’re looking for somebody again who will I think lead with, “Hey, I want everything done. These are the things I want. I need you to do them for me rather than the money side of things.”
I try to use some examples, but one of our assistants has gone to a client’s house to do the appraisal because the client wasn’t available when they were refinancing the mortgage. She called us, said, “Hey, would you be willing to go meet the appraiser?” Client says, I’m thinking about buying a piece of raw land. I get an architect and I go with her on a Saturday to a piece of raw land to try and analyze how much it will cost. And then I’ll give you another example. There was a new client that came in and she said listen, I just went through a divorce and I need a new tax adviser and I need a new estate plan. Great. Let’s knock those things out. Let’s get those things done. We came out of the first meeting. That’s what we did.
We set up a meeting with a tax advisor. We set up a meeting with an estate plan before we ever even talked about her money or managed any of her money or even asked her to transfer any money. We took care of those things first because that’s what she wanted to get done. That’s why for me, again, and for us, I think it’s just a niche of people who are looking for that holistic I want someone to do everything for me because they’re busy and they don’t have time, and they want someone that they’re going to trust. They don’t want somebody who just manages their money. In fact we just had a new client come on today who, based on what I know about the way we manage investments in the other advisor managed investments, I think they’ve outperformed us considerably over the last 10 years, right, because we tend to be a little more diversified and have different asset classes.
This person was a manager who is heavy in large cap growth, which has had a huge run up over the last 10 years, and so that advisor was probably thinking, “Oh, there’s no way this client will leave.” Right? Because I’ve gotten this person 15% year over year returns for less… but what happened is that client’s girlfriend is a client of ours and that client kept asking his girlfriend, “Hey, I’m thinking about buying an investment property. What should I do about selling my stock?” And his girlfriend was like, you need someone to answer all these questions for you, not just manage your money and so he ended up leaving that advisor to join us.
Steve Sanduski: Do you think of your firm the way you want to have relationships with your clients, where you’re the first call. If something important happens in their life, it’s like I’m going to call Arthur, I’m going to call Rachel. Is that kind of how you think about it or no?
Arthur Ambarik: Absolutely and I think we are. Actually, I’m not sure. I am. Sometimes.
Steve Sanduski: Well, you’re the CEO.
Arthur Ambarik: …depending on what… no, but I also have a… I am the lead advisor on roughly $250 million book of business as well. I am lead advisor for these clients but at the same time for most of the day to day things, they’ll call the team and when they need things and yeah, I gave some examples earlier of someone.
Steve Sanduski: As you were talking about the example of the appraiser. Your client couldn’t be there, so they called you and said, “Hey, could you be there to meet the appraiser?”
Arthur Ambarik: That’s right.
Steve Sanduski: Yeah.
Arthur Ambarik: I think they know pretty well if it’s a planning issue or a administrative issue or something outside the box who to call. Another example, I had a client who called me recently. Said they were getting a job offer and I said, great let me talk to the recruiter and he was like, great, I don’t want to-
Steve Sanduski: I don’t want to deal, I don’t want to negotiate this.
Arthur Ambarik: Right. So I called the recruiter, I had a long conversation with them, explained to them, they can’t ask my client for historical comp info because it’s actually illegal in California and pretty early on the recruiter who worked at a big recruiting firm said in his entire career, this was only the second time he ever talked to somebody’s financial advisor.
Steve Sanduski: Wow.
Arthur Ambarik: And that kind of surprised me because our clients are thinking about, that’s a big financial decision. They should be calling us and asking us what we think engaging us in the process with the HR department of the hiring company in trying to negotiate that contract and then help them think through if they want to make that move if the financial implications are worth it to them and this client… he was a very quick process. I called the recruiter and talked to him for a bit and I said, “Let me get back to you.” Called my client and I said, okay, successfully can get that number that you wanted. And the number was pretty high in terms of annual salary and I said, if we go further with this, we send them all your information, confirm and we’ll give them the information in a way that we want to because they can’t just ask, again, it’s illegal for them to ask for things like W2’s or tax returns.
We’ll give them that information and this is what I think we can get for you and I gave him that number and he’s like, I still don’t think I’d move. Then I said, okay, so I’ll let him know and so I let the recruiter know that he’s not going to make a move right now, keep us in the loop if other things come up.
Steve Sanduski: Very nice. What I love about that is when people talk about service or they talk about caring, that is such a great example of what would be above and beyond what I would call a traditional financial advisor might do. They might think, well that’s not necessarily in my job description, but I think that those are the kinds of things that if advisors can do those things and be skilled in those areas, or if they have a connection that can help do that, that there’s no technology that’s ever going to make that obsolete.
Arthur Ambarik: That’s right. I think that’s right. I think that’s right. I mean there will be… we need to get into fee compression and all those things. All of that’s real like, as firms we need to be making sure that we’re optimizing technology and human capital to get in front of that but actually the speaker this morning?Steve McClatchy, did you see him this morning?
Rachel Elson: It was about decision making.
Arthur Ambarik: Okay, but he talked a little bit about how you have a best friend and he said how awkward it would be if you went to your best friend and you said it… and he said, the reason you have best friends or back up is because you do things for them you don’t have to but because you want to. And he said, but it would be awkward if you went to your friend and said, hey, I did that thing for you that I didn’t have to do-
Rachel Elson: A quid pro quo.
Arthur Ambarik: Yeah. What are you going to… and I think it’s… well, you developed your best friends because you do things for each other you don’t have to and I think we’ve taken that approach.
Rachel Elson: Kind of like in a marriage.
Arthur Ambarik: We’ve taken… thank you for sure, and he used that example of like personal relationships and I think with clients, we’ve tried to take that approach of doing things we don’t have to do because we want to do them. We feel like one of our responsibilities because they trust us so much, is to help them in all of these areas and again, to free up their time so they can go focus on other things in their life, their jobs, their families, their social lives, everything else that they have going on. Yeah.
Steve Sanduski: And I would say if you’re an advisor and you’re listening to this and you’re thinking, well, I don’t really want to do those kinds of things. Well then maybe think about whether this is even the right business for you because I think that’s what clients will expect and that’s what they’re willing to pay for and when we talk about fee compression, here’s a way that you can actually increase your fees by increasing your services and your value that you’re delivering because people will always pay a lot of money for high quality service that they can trust and so I think the more advisors can do that, the more successful they’re going to be.
Arthur Ambarik: Yeah, no, that’s true. I think all of these conferences are focusing on the right things about niche and specialization and differentiation and as a lot of the things in our business get commoditized, we’re going to have to differentiate ourself more and more. Yeah.
Steve Sanduski: And Rachel, so you’re starting out as a financial advisor.
Rachel Elson: Yes.
Steve Sanduski: You don’t have any baggage from having been in the business for 30 years and you grew up one way and now you’ve got to try and change and do it a different way. How do you think about this at the early stages of your career as an advisor? How do you think about the kind of advisor I want to be?
Rachel Elson: That’s an interesting question. I mean, as I say, I talk to a bunch of firms in San Francisco when I came into it thinking, oh, I want to be at a really big firm. I want to be at one of the big established firms and several very smart people told me that I was probably the wrong direction with that and I didn’t listen to them and I kept talking to the very large firms and what I found is that they weren’t really a good fit for me. Part of it was because… well, one piece of it was because Perigon works with younger clients and something that was pretty important to me is being able to work with people at a point where you have enough runway, enough time that you can really make a material difference in their lives by sort of putting them on the right path.
When I started working at Perigon, I realized very quickly because I came in as an intern and I realized very quickly I was like, oh, these are those people, these are the people I want to work with. I always knew I wanted to be client facing. I always knew I wanted to be able to work with people where I could start to make a difference. We have a lot of people in the Bay Area that are working for tech firms that are making a lot of money that maybe didn’t come from… these are not second third generation wealthy. These are people that are earning a lot now and have a lot of big decisions to make and the idea of being able to work with them is incredibly satisfying. It’s very helpful.
Steve Sanduski: Yeah. This idea of having a long runway, I had another gentleman on my podcast named Dr. Brad Klontz and he’s like a behavioral psychologist guy. Does a lot of work in our industry and he must be… I’m going to say he’s in his 40s and if you’re younger than that Brad, sorry, but all of a sudden… so we’re connected on LinkedIn and all of a sudden I’m seeing him on TikTok videos in my LinkedIn feed doing these goofy things and I’m like, Brad, dude, what are you doing? And so I sent him a message. I said, “Brad, what are you doing here on TikTok?” I said, that doesn’t seem like that would be your target audience and he got back to me right away and he said, well, he said, “I am all about financial literacy and part of what I want to do to give back is I want to reach people at a very young age when they’re having very impressionable times about their experiences around money and how to think about money so that they can start at an early age to make good decisions.”
And he said, well TikTok is a place to reach them and he said, and besides that it’s a lot of fun and he does look like he’s having a lot of fun. Yeah, I think that’s a great idea. This idea of trying to reach people earlier, they’ve got the longer runway to have the bigger impact. Yeah. Good. Anything else in terms of how you think about where you think you can add additional value? You said there a lot of tech executives. Are these people like in their 20s and 30s that have startup money options?
Rachel Elson: 30s and 40s.
Steve Sanduski: 30s and 40s, okay.
Rachel Elson: …lots of options, lots of restricted stock grants.
Steve Sanduski: Okay, and then do you have people basically like didn’t have maybe a lot of money and then all of a sudden the company goes public or they sell some of their stock options and now all of a sudden we’ve got like eff-you money and then does that change them and then how do you deal with that as an advisor to say, “Hey, don’t be stupid and go blow this on dope or something.”
Rachel Elson: Arthur should take this question.
Arthur Ambarik: Yeah. I have an interesting philosophy on this. First of all as Rachel mentioned, yes, most people are first generation money and yes, a lot of them are getting to that point. I think I heard somebody call it champagne money recently or F-you money has been popular in the Bay Area and mind you, I just want to give a shout out to my clients a little bit in that these people are not the entitled type of people that people and the rest of the country think. These people work hard and these are the people who helped build these brands in the Bay Area, these huge tech companies.
Steve Sanduski: The unsung heroes.
Arthur Ambarik: And they I mean have worked. I can’t emphasize enough how hard these people have worked to accumulate that money. They do not want to see it go away.
Steve Sanduski: Good.
Arthur Ambarik: That being said, we have an interesting niche within the tech community, which is female tech executives. What I’ve tried to coach them on is essentially pretend your stock doesn’t even exist and that’s been the mindset. I’m not going through a cashflow analysis with a 45 year old C-level or 50 year old C-level tech executive and trying to come up with how much discretionary income they have on a monthly basis and telling them to invest every last dollar of that.
That’s the way that I’ve handled it is, your income, your monthly income that you have from base and incentive comp, that’s yours. Okay. You do what you want with it. I’m not going to push on that, but just pretend that this stock doesn’t exist and it works for them because honestly like putting them on a budget would create a negative experience that I don’t want to create, one and two, I think them enjoying their lives makes it more sustainable for them to work at a longer period of time at the pace they’re at and number three, their stock comp tends to be much more than their base and incentive comp.
Steve Sanduski: Right. How do you get new clients?
Arthur Ambarik: Yeah. To this point, it has been 100% word of mouth.
Steve Sanduski: Okay.
Arthur Ambarik: Yeah.
Steve Sanduski: If you were starting over today though, word of mouth isn’t going to help a lot of people necessarily, but if you were starting over today, how would you think about going about building the business?
Arthur Ambarik: That’s a tough question, but we have new advisors in our business and I tell them about when I started 18 years ago and the people that… well, first of all, you want to be someone as you mentioned earlier, in my opinion, you want to be that type of person that wants to do things that they don’t have to do, that actually cares about people and so we look for those types of people in new advisers to begin with. Beyond that part of my coaching is, listen, when I started 18 years ago there were few advisors who got big clients got big clients right off the bat. Those are not the people and maybe you’ve heard this from other advisors, I don’t know, who lasted in the business.
Frankly, the ones that lasted or the ones where it was a grind and they had to keep working and working and working on their message and their storytelling and developing that and continuing to talk to as many people as possible. When I switched firms in 2013 I didn’t move that much in the way of assets from the firm that I was at, but what I did is I went around and talked to everybody that I knew. I’ve met with everybody and just worked on that story and I remember early on, somebody at the firm I went to saying, who are you meeting with all the time? And I said, anyone and everybody. Really, because you don’t know. I couldn’t have taken a marketing class 15 years ago and learned that female tech executives were going to be my niche. That was just hard work, getting some good clients and then building a service model around those clients so that they go and tell other people about you.
Rachel Elson: I think there’s a value to… I mean, yeah, essentially that’s become the niche and then when we provide things like negotiating new job, new pay structures or we just sometimes we’ll do a side by side what are they offering versus what are you getting now and we can map out the equity comp because we know the industry, we’re just in a better position to help them and they are in turn, they’ll… if somebody at work comes to them and says, who do you talk to? They can send them to us and it makes sense for everybody.
Arthur Ambarik: Yeah. Just made me think of something. I think people who get into this profession at the beginning believe it’s a sales business and this is not a sales business. It’s a service business. Okay. You’ll get some clients early on. If with those first few clients you’re thinking about getting the next client, you’re doing the wrong thing. What you should be thinking about is servicing the unit watt out of those clients and so that they will go around telling more people about you.
Steve Sanduski: Arthur, I’m going to ask you a question and then I’m going to turn it over to Rachel. what I want to ask you is, we were talking about hiring advisors and you’re looking for advisors that want to… they help their clients because they want to not because they feel they have to. My question to you is, what did you see in Rachel that made you want to hire her? And then I want to ask Rachel what it is that you’re doing… Arthur’s talking about the grind. You got to put the work in. So Rachel, what are you going to do to build your business here at the firm? Let’s start with you, Arthur. What did you see in Rachel that made you want to hire her?
Arthur Ambarik: I will be perfectly honest that we have a… there’s someone else who works with us on our team, Danny. Okay and Danny… we had been trying to find somebody to add to our team of CFPs and we’d had a couple of interns, great people. I’m not saying anything bad about the interns that we had, but Danny wasn’t having that. Again, he said, I don’t want another college intern. I don’t want another person just out of college because they just don’t work hard. They don’t put in the effort or even have necessarily the skill sets that Danny was looking for. We embraced that and when we had the opportunity to bring in somebody who had some experience and actually, her messaging to us was that she was going to work hard. She understands that she has to, it’s a career change and she has to work her way up.
I mean, those were… I think that was music to our ears that she understood the business and I talked about the work that it takes. I think she knew that coming in. Now what I’ve learned and I’ll turn it back over to you, is that for the last six months.
Steve Sanduski: There we go.
Arthur Ambarik: For the last six months while she’s been an intern and going through her CFP program, I think she’s been interviewing us. I’m pretty proud to say that she came on full time in February just last week.
Rachel Elson: Four days ago.
Arthur Ambarik: Four days ago after a long process of interviewing us.
Steve Sanduski: Excellent. Yeah.
Arthur Ambarik: We were sold a long time ago on her words.
Steve Sanduski: Great. Well, and so Rachel, I want to ask you what you’re doing to build the business, but before you answer that, I want to jump off of something that Arthur just said, which is still for you, Rachel, which is, you were an intern for six months. Tell me what was the intern process? What did you do as an intern? What was expected of you as an intern?
Rachel Elson: Well, I knew that I was a bit of a square peg. I came in and I had been quite senior in my previous career and a lot of people were really afraid of that and were like, well, we can’t pay you what you would expect to be paid and I was like, yeah, that’s okay I know that, and they were like, well, we don’t know what to do with you, and so we came in and we settled on an hourly that is close to what I made a long time ago, but-
Steve Sanduski: I’m not going to ask you to share what that is.
Rachel Elson: No. But we agreed they would be 20 hours a week so it would give me enough time to A, I still had a couple of freelance projects-
Steve Sanduski: Okay. Good.
Rachel Elson: …that I could pick up and B, I had time to study. I mean in the fall last year I had a triple class load. It allowed me to do that. It allowed me a lot of flexibility and I came in and basically I spent the first six to eight weeks banging my head against the money and just hoping something stuck and I did bits of other work. I picked up the financial narratives pretty quickly because I just was like, I can do this and it’s going to not cause me any stress and it will cause everybody else. If you’re not a writer, then writing is a challenge. It’s a special thing you have to do and if you’re a writer, then you just do it. I thought that was something I could add value with like right away and otherwise… for the first two months they lost money on me because they were teaching me and I was coming in every day and I’d sort of do something and I’d say… we keep talking about Danny.
Danny is the head of planning at the firm and I’d say, Danny, did I get this right? And he’d come over and tell me all the things I did wrong and I’d take notes and try to make sure I could do it right the next time and so we now have a good evolved process stock for Emoney. You’re welcome. And I just ground it out really for the… and after a couple of months I was finally like, oh okay, I can do this and I only have a couple of questions for Danny about the process and he would review and he did have a couple of changes and so you just get better and better and start to feel more comfortable with it.
I knew that it was fine if they paid me less at the beginning because they were taking a risk on me and now I sort of feel like I’m at the point where I’m an employee and I can actually add value. I can free up Danny’s time and give him more reach and I can take care of a lot of stuff and I’ll bring in some clients. That’s not really… right now that’s not my core focus. My core focus right now is still supporting the larger team.
Steve Sanduski: Okay. Is your focus more on the planning side then. Okay.
Rachel Elson: On the planning side.
Steve Sanduski: And then do you have an aspiration to be a lead financial advisor someday? Is that the hope or what do you think?
Rachel Elson: I don’t really know.
Steve Sanduski: Okay.
Rachel Elson: This is… I mean-
Steve Sanduski: That’s an honest answer.
Rachel Elson: I’m so new in the process. I don’t think of myself as a rainmaker. I think of someone who’s very comfortable selling myself in my own skills, but I don’t think of myself as a rainmaker. That may change. It may turn out that it’s something I enjoy doing. I like working with clients. I don’t really know.
Steve Sanduski: So maybe more of a servicing advisor someday where you’re not responsible for bringing in new business.
Rachel Elson: Arthur apparently has an opinion about it.
Steve Sanduski: Okay.
Arthur Ambarik: It just kind of goes back to what I was talking about that it’s not a sales business, it’s a service business. Ultimately Rachel will be a lead advisor I think because she’s going to service clients so well and they’re going to like working with her so much that they’re going to get referrals. I don’t think Danny thinks of himself as a rainmaker either and as you know Danny now gets referrals and gets clients because of, again, I think the level of service that we provide to our clients and the model that we’ve built over time and so we have the right people who are committed to that process.
Again, not focused on the sales aspect of it but on the service aspect, that servicing advisor will become a rainmaker I think in our model. What they call a rain maker anyway.
Steve Sanduski: Let’s switch gears for a second here. You’re the CEO Arthur. How did you make the jump from being a financial advisor to a CEO? This is something that I talk about a fair amount. I know a lot of people in the industry talk about. You start out as a financial advisor. Nobody ever taught you how to be a CEO, how to run a business. It’s like, I just wanted to be a financial advisor. Now all of a sudden I’ve got 500 million or a billion and do I want to be the CEO or do I want to hire a CEO so I can still be a planner? How did you make the shift from being an advisor to being a CEO? And was there a time when you said, and I know you’re still an advisor. So you have a dual role, which to me is doubly hard. It’s like how do you do both? Tell me a little bit about the shift.
Arthur Ambarik: Okay. There’s a lot to-
Steve Sanduski: A lot in there.
Arthur Ambarik: Yeah, it’s a loaded question. We didn’t have a CEO until 2017.
Steve Sanduski: And what’s the size of your firm, roughly.
Arthur Ambarik: Right now it’s 1.8 billion.
Steve Sanduski: And you have how many employees?
Arthur Ambarik: There’s 32 people.
Steve Sanduski: Okay. Yeah. So it needs a leader.
Arthur Ambarik: But it’s grown rapidly since… Since I became CEO it’s actually grown rapidly. I’ll be-
Steve Sanduski: And we attribute that to you.
Arthur Ambarik: I don’t think so.
Steve Sanduski: And your astute practices.
Arthur Ambarik: No, that’s more like it. That’s the right answer, is the people. Definitely the people around me. For my first five years, I would say… so from 2013 to 2017 when I joined the new firm, I’ll say I was being an advisor. I had my head in the sand growing a book of business, building it and then around 2017 I just felt like there was a lot of opportunity out there in the marketplace which everybody knows. I started to talking to a bunch of different firms out there and I suppose that’s when I morphed into this CEO role but in our profession the CEO is somebody who drives the vision of the firm. Does what they can to drive the culture of the firm, which I think is maybe in other industries their CEO might take on more of the operating of the company, but we have-
Steve Sanduski: Well there could be a COO, a chief operating officer.
Arthur Ambarik: We have a CFO, we have a COO, we have a CCO and those people are not advisors and those are the people that run the day to day operations.
Steve Sanduski: Those are the professional managers.
Arthur Ambarik: …of the company. Yeah and even on the advisor side, I will say it’s similar in that, while I lead a lot of client relationships, most of the day-to-day work be it an administrative planning investments are done by our investment team, our planning team and our administrative team and obviously you hear all the… I’ve been to coaching. So I’ve been to strategic coach. That was, before I was CEO I did all that coaching and it talks about scale and how you create this self managing team and we worked very hard to do that within our firm so that I’m not the go-to for clients on administrative or day-to-day planning issues. I’m not the go-to for our compliance consultants or for our accountants. Those are other people who fill those roles and so I think it’s been a pretty seamless transition for me.
However, that being said, I would say my… I have a lot of passion around the industry and I want to continue to go out there and spread the word and talk to people and find different ways to collaborate with other people out there and continue to grow. I think as we grow, I will still be an ambassador of the company, but I’ll work with clients always. I actually don’t think I’ll be CEO always. I think there’s someone else out there as we get into the three to five billion range over the next couple of couple of years.
Steve Sanduski: Okay. How do you think about your time then? Do you say, oh, for two hours today I’m going to be CEO and the rest of the time I’m working with clients? Or do you have like a regular meeting schedule where, okay, in my CEO hat, we have like a weekly leadership meeting and that’s when I’m kind of my CEO guy. How does that work?
Arthur Ambarik: Yeah, no, it’s exactly that. I mean, again, that goes back to some of the coaching.
Steve Sanduski: Yep.
Arthur Ambarik: Monday, Friday I will do client work as it comes up, but Monday morning is meeting with the management team about the business. Tuesday, Wednesday, Thursday tend to be my focus days where I schedule financial reviews, prospect meetings those kinds of things.
Steve Sanduski: And when are your free days as well?
Arthur Ambarik: Well, I used to have Friday free days. There’s been this change in thinking from work life balance to work life integration and I bought into that and so I don’t necessarily separate those things out unless I’m actually on vacation.
Steve Sanduski: Yeah.
Arthur Ambarik: In which case I’ll go as far as to bring a burner phone that only a couple of people have the number to and I will actually disconnect.
Steve Sanduski: Do you have another business that we don’t know about with that burner phone?
Arthur Ambarik: No, no, no. It was strictly so that my… the only people I gave the number to when I go with… I go to Hawaii every year in April and I give the number to two people. Who’s been my admin for 14 years and my mom. Yeah.
Steve Sanduski: Yeah. Well this idea of work life balance. Yeah. I think a lot of people are starting to rethink that concept and I agree with you. I mean, when I think of work life balance, I think that it’s more like seasonal where there are times when there might be certain work things where it’s like almost all work. I’m never going to give up the health side because I’m always working out, but it seems like sometimes there’s like okay this is heavy work for this month or a couple months and then I’m going to… I got a little bit of breathing time in the summer or I need to really spend a lot more time with the family here because they’d been neglected during my work season here.
Some of that can kind of balance over time. It’s not like, oh I do a little bit of this each day so I’m balanced. It could be more seasonal. That’s kind of one thing and then a second thing, and this is more like the work life integration. There’s an old quote from Richard Branson and this was on the cover of like Forbes Magazine or something, Fortune. He said, I don’t think of work as work and play as play. It’s all living. It’s like how do I know when, oh, this is work or if I’m going out to dinner with a client is that work. Is that play?
Arthur Ambarik: Yeah. So it’s interesting you say that. We did a retreat in Tahoe in August and there was a company that came in and did a personality test. There’s all these different personality test.
Steve Sanduski: Yeah. Which one did they do?
Arthur Ambarik: I don’t recall the name of it, but it was one that tells you here’s your, like born innate self and here’s your work self. Here’s how you act in real life and here’s how you act in work and usually they differ. Mine were exactly on top of each other.
Steve Sanduski: Now, this wasn’t a disc was it?
Arthur Ambarik: It’s not a disc.
Steve Sanduski: Okay.
Arthur Ambarik: It was not a disc, I don’t think but it was… and so what I learned is yes, to your point that I… enjoying very much what I do and acting the same way that I would in life at work, which is kind of a nice place to be, especially in a world where authenticity I think means a lot.
Steve Sanduski: Absolutely. Great. So, Rachel, let me ask you, what are you finding far is the hardest part about learning your job? About becoming an advisor, about being a kind of the associate planner here?
Rachel Elson: God, it’s still E-money.
Steve Sanduski: Still E-money. Oh my gosh.
Rachel Elson: No, no, no, no. I’m getting better at it.
Steve Sanduski: We better not let Fidelity hear this.
Rachel Elson: I don’t know. I mean, I do feel that the learning curve is so steep and I’ll think I’ve got a handle on a lot of complicated planning ideas or planning strategies and then Danny will take a look at something and say, oh, but we could also think about this. Here’s this other thing to consider and I’ll be like, just managing the learning curve has been a challenge because I think of myself as an expert. I think of someone who was… if you ask me about story ideas and I knew exactly how we were going to pitch your story and how we were going to frame them and what we could do.
I’m used to being really good at what I do and so getting to the point where there’s things that I really need to learn. It has been a little bit challenging I would say, and just appreciating that and knowing where I need to ask the questions but it’s also… it’s so much fun. I’m having much fun having to learn constantly. There’s this story I’ve told about when I was at E-money and I was editing a story and I had sort of come into the story late.
Another editor had been handling it and there was a staff change and I wound up picking it up and it was about investing in 529s and saving for college, more investing for college and our first draft came in and I edited it and I brought it to the editor in chief to review it before we went forward and one of the things we said was, well, the right strategy with a 529 is to hit it early, go hard, put as much as you can afford into it and then invest pretty aggressively because you have that really long time frame, and the kids are newborn you have 18 years and we took that to the editor in chief and she said, we can’t say that that will make people feel bad because no one can do that. No one gets around to it and we’re like, but it’s the right answer and we wound up having to change the story.
It was still a good story, but the really satisfying thing is now we can actually do that for our clients. We can say to them, this is what you should do and instead of it sort of going off to the ether and you hope that somebody reads the story and takes it seriously and makes the right decision, we can just make that happen and it’s incredibly satisfying. It’s so fantastic.
Steve Sanduski: Yeah, I love that. I love that story. I also love making a career change and basically you walked in and said I’m going to be an intern. For 20 hours a week I’m going to take a significant pay cut and I think if we’re going to all continue to be successful in life, we’ve got to challenge ourselves. We’ve got to sometimes start over, start at the beginning and I look at me, I basically worked with and for other people for my first 50 years and then when I turned 50 I became an entrepreneur and then when I was like 55, I started a fintech company and I’m like, what the hell are you doing Steve? My wife is saying that to me but it’s so challenging and here I am podcasting at the Barron’s conference. So it’s like, I’m always trying to learn these new things and sometimes you fumble and sometimes you score a touchdown and so it’s just… it’s fun. It keeps it alive and energetic.
Rachel Elson: I come from a family with a lot of longevity. Women in my family live late 90s to a hundred and so I can’t imagine what it would be like to work for 40 years and then have to entertain myself for 40 years doing nothing, but I also just… I’d been doing what I did for a long time, for a couple of decades and I needed to change. I needed something to like make me wake up in the morning excited and do something new and challenge myself. That was really appealing to me to have to learn something new. Very early on, I had an interview and it was a phone interview and there were all sorts of things wrong with a phone interview. It was hard to hear one of the advisors I was talking to, had a thick accent and it was hard, you know, speakerphone but they asked me five ways from Friday why I was willing to take a step back in my career and I was like, well, you know, I know that I get a new runway and I know that it’s temporary and it’s a trade off that I’m making and if you haven’t listened to me the first four times, are you listening to your clients like this?
It did not work out. I didn’t say that. I thought it really loud.
Steve Sanduski: That’s awesome.
Rachel Elson: I was taking a pay cut for a short period of time. I didn’t think I was going to do that forever and I was very fortunate that I was in a position that I could do that, right. Like, I was very lucky but I’m having so much fun.
Steve Sanduski: All right, well I think we have just about talk long enough that the bar is like being dismantled. I’m thinking we better wrap here so we could get a drink but before we do that, I always like to ask, is there anything else that either one of you want to share here that we haven’t talked about yet?
Arthur Ambarik: Well, I’ll just say that this has been a good conference in that it’s happening at a snails pace, but this profession is progressing and in the fact that someone like Rachel who’s a successful intelligent woman would want to enter our profession. I think reflects well on the future of the profession and hopefully more people like her will consider financial planning as a profession because we all know we need more women in this profession.
Steve Sanduski: And I will absolutely second that and Rachel, with that setup we’re going to give you the last word.
Rachel Elson: I never take the last word. I don’t think I have anything else I’d add.
Steve Sanduski: Okay. It was perfect as is. All right, well, hey, thank you two. I’m glad we basically bumped into each other here and decided let’s do a podcast. This is great. I really appreciate it and welcome to the financial advisory side of the business.
Rachel Elson: Thank you.
Steve Sanduski: …and Arthur, thank you for sharing your great thoughts here as well.
Arthur Ambarik: Thank you.
Rachel Elson: And thank you so much for having us.
Arthur Ambarik: Thank you, Steve.