Is the key to growing your business narrowing your niche?
I know that sounds contradictory. And I know many advisors worry about the “Million-Dollar Prospect” who swipes past your firm because she’s a pediatrician and you specialize in orthodontists.
But if you’re one of 10 advisors in town that offer the same services, you have a 10% chance of winning a prospect. If your specialization, your marketing, and your values set you apart, then prospects who are drawn to your firm have a binary choice: you versus everyone else. Your 10% chance just skyrocketed to 50%!
My guest today, Samuel Deane, started with a pretty narrow niche: comprehensive planning for millennials working in tech. Then, Samuel zeroed in on a niche within his niche where Deane Financial Partners could establish a real competitive advantage and make a positive impact on communities across the country.
Learning the real value of money.
Step outside the “millennials in tech” niche for a second and what really interests Samuel is helping young people build generational wealth. Managing 401Ks and IRAs is certainly part of that, but Samuel’s experiences emigrating from St. Lucia in 2000 gave him an appreciation for the power of equity and ownership as well.
“My parents were very, very poor,” Samuel remembers. “My dad didn’t graduate high school. My grandma told my mom that she couldn’t go to school because they couldn’t afford transportation. And my mom started baking and cleaning people’s homes just to have that money to still be able to go to school. When we moved to America, my dad got a job delivering food to grocery stores and my mom became a registered nurse. That was a really positive and life-changing moment for us. We went from living in someone’s basement to owning a five-bedroom home in Long Island, literally the American dream. It shapes who I am today and the type of drive that I have, because I want to be able to continue what my parents started for future generations of my family.”
What does your spouse need?
Helping his parents manage their own entrepreneurial endeavors — and realizing he was too squeamish for med school — led Samuel to finance. As he interviewed at various firms, Samuel was frustrated by the sameness he perceived in how the industry did business, and by the high bar of entry he faced as a 23-year-old without an existing client base.
“I realized that the business models were relatively the same,” Samuel says, “and the cultures were relatively the same because essentially you’re selling products for commission. Nine times out of ten the clients that I worked with looked nothing like me. I was often the only Black person in the room or the youngest person in the room, or both. And many times, you sort of have people speak to you in condescending ways and those sorts of things. So, my desire to be a business owner and noticing the areas that I felt could be better was the beginning of getting my feet wet in this industry.”
While Samuel was starting in finance, his fiancée was building her own career as a tech product designer. “I was able to see a lot of the things that were inherent with people that worked in her industry,” Samuel says. “Equity compensation for example. Being awarded stock and the tax consequences around those things. I saw a huge opportunity from a wealth management lens as it pertained to the tech space.”
So, what does your spouse need from a financial advisor?
What about your baby boomer parents? Your retired grandparents? Your nephew who’s about to graduate from an Ivy League university? The owner of your favorite local coffee shop who’s struggling through the pandemic?
Finding your niche is all about identifying need. And there’s certainly a whole lot of need in our country right now. Whom are you best positioned to help? How can your expertise guide someone through this turbulent time and create a client for life?
Design your “client avatar.”
Another idea inspired by Samuel’s wife was designing products and services with an end-user in mind.
“I tried to get as specific as possible,” he says, “things like millennials, married with kids, both work in tech, listens to trusted friends when it comes to money resources. I really tried to get as specific as possible and tried my best to put out content that resonates with that particular person.”
The more he drilled down into his niche, the more Samuel realized…
that millennial tech workers needed advice on equity compensation. Equity offers are what the Googles, Microsofts, and Twitters of the world use to attract top talent. And managing that equity isn’t just a key to helping these young people build wealth — it could be the very reason a millennial looks for an advisor in the first place.
“My strategy is very much an inbound marketing strategy,” Samuel says, “where I put out content on certain platforms that will help people. That will educate people. That will help them make educated decisions on when should I exercise my stock options? Or what are RSUs? And how can I align my 401K? How can I budget properly? Really putting out content that is very specific to a person’s pain points. At some point when they experience a life event, I hope that I’ll be first in mind. I believe that you can’t make someone want a financial advisor. It has to be a life event that happens. When I sit down with clients that work in tech and they’re looking for an advisor, I’m really confident that that client will choose me because I’ve built the business specifically for this demographic.”
Have a purpose, make an impact.
Samuel says that his firm is “paperless and location independent,” managing clients from across the country out of his New York office with minimal overhead. In the pandemic environment, that’s another competitive advantage. But it’s also a significant challenge. When Samuel onboards a new client, he’s committing to a person he might not meet face-to-face for months, if not years.
“In the beginning of the relationship, I make it very clear what my goals are,” Samuel says. “I want to have a very close relationship with everyone that I work with. I want it to feel like you’re family and I want you to feel like I’m going to take care of you like we’re family. That first call is like an hour. And it’s really just me asking certain questions, trying to get to know them better, helping them understand what it is that I do and how it could be of benefit to them.”
Stepping back from his niche again, the bigger benefit that Samuel wants to create is growing a purpose-driven company that will have a positive impact on Black communities.
“For me, it’s extremely important to focus on building generational wealth within my community,” Samuel says. “Black people are the only people that were denied wealth. We came into this country representing wealth and we are the only group that has systematically been denied wealth consistently and throughout history. So, it’s really important for me to do what I can and play my part and help people from my community build wealth so they can do the same and pay it forward. I’m not doing this because I just wanted to be a business owner, or I like money and finance. There’s real purpose behind what I’m building.”
Resources Featured In This Episode
Michael Kitces.com Samuel Deane says that Michael’s blogs and podcasts were an important resource as he was starting out in finance.
XY Planning Network Another valuable site that Samuel used to connect with and learn from other advisors.
Values Clarification Toolkit Click here to download this FREE tool and start living your values.
Steve Sanduski: Hi everybody and welcome back to Between Now and Success. I’m your host, Steve Sanduski, and my guest today is Samuel Deane. Samuel is the founder of Deane Financial Partners, which is an independent wealth management firm and registered investment advisor that specializes in comprehensive financial planning and investment management for millennials in tech. In today’s conversation, Samuel and I talk about the specialty that he’s developed with millennials in tech. We talk about how he chose that specialty, how he markets to that specialty, and how he describes what his competitive advantage is in marketing to that particular focused market. Samuel also has a compelling backstory as his family integrated to the US, and I think you’ll really appreciate how Samuel and his family have overcome long odds to become a success story and role model for others in the black community and how Samuel has a strong purpose behind the work he does to help build generational wealth within his community. With that, please enjoy my conversation with Samuel Deane.
Samuel, welcome to the show.
Samuel Deane: Hey Steve. Thanks for having me.
Steve Sanduski: Yeah, well happy to have you here and looking forward to the conversation. One of the things that I think will be fun to talk about here is a lot of people in the industry talk about the importance of finding a niche or a niche. I guess we could argue about the proper way to pronounce that, but I think I’m just going to say niche to make it easy. So you do have one and I definitely want to get to that. But let’s go back to the beginning first and would love to hear how you got started in the business and what was it that initially peaked your interest in the money area and in financial services?
Samuel Deane: Sure. As far as what peaked my interest in the money area, I think that largely has to do with sort of how I was brought up. Growing up my mom’s and my dad’s, both of my parents’ mindset around money and ownership and even equity had a real profound influence on me and that sparked my desire to be a business owner. When I graduated college I graduated with a degree in biology because my initial plan was to go to medical school. Once I sort of started working in medicine, not necessarily working but volunteering and sort of doing the things that I needed to do to get into medical school, I realized at that moment that I was squeamish. And so I was a junior going into my senior year I believe it was and at that point it made no sense for me to change my major or anything like that, but I knew that med school was sort of out the picture. And so I wasn’t necessarily sure what I wanted to do but I knew that I wanted to be a CEO business owner of some sorts.
Fortunately, my mom started a nursing agency when I was graduating college and so I sort of played a business development role. And there was three of us, my mom, myself, and one of her colleagues. And I sort of lead the business development and I was able to get our first few clients from that. Outside of just sort of seeing the money moves that my parents were making as a kid and and growing up and just seeing them hustle and drive, that real life experience of sort of being in control of my own time and having the flexibility and knowing that everything is on your shoulders and when you get that first client, how good it made you feel, that experience really was just the icing on the cake for me. And so eventually the business didn’t end up working out and so after college, after that didn’t workout I pursued my MBA and started working in finance while I was in business school. And when I go to these different interviews and I’m meeting with these different companies, I realized that the industry at large was relatively the same.
I’d go, I’d sit down and the interview would go relatively well. And then they’d give the offer and then I’d get a piece of paper and a pen and say, okay, well write down 50 names that could be a good fit for this firm. Nine times out of 10 the firm had a minimum, whether it be $100,000 or a quarter million dollars or whatever it is. And I was 23 at the time. So as a 23 year old, who do I know with that much assets that can even qualify to be a client of this firm? And so I really realized that in terms of the business models was relatively the same, the cultures are relatively the same because essentially you’re selling products for commission. Nine times out of 10 the clients that I worked with look nothing like me. I was often the only black person in the room period or the youngest person in the room or both. And many times you sort of have people speak to you in condescending ways or speak down to you and those sorts of things. So my desire to be a business owner and being in this finance space and noticing the areas that I felt like could be better was sort of the beginning of me really getting my feet wet in this industry.
Concurrently my fiance is a product designer and she worked in the tech industry. And I was able to see a lot of the things that were inherent with people that worked in the industry. Equity compensation for example. Being awarded stock of your company or your employer, and the tax planning and the tax consequences around those things. So I saw a huge opportunity from a wealth management lens as it pertained to the tech space. And as I’m in business school I’m literally doing a business plan for every single class and I was working full-time at the time as well. I just really noticed that, hey, instead of selling products, working with people who already have all the help that they need, how can I turn this into a way that I can be a business owner? So I took the role just for the sake of being able to get my feet wet in finance. And I did a lot of research and found out about the CFP and the three year requirement and from there it just sparked that I could build and run my own business serving the people that I wanted to serve and doing it in a way that I felt would be, I guess, most transparent and beneficial for my clients.
So that was the beginning of me deciding that, hey, I want to run my own firm and go out there and do my own thing.
Steve Sanduski: Let me go back. You mentioned that your parents’ influence and watching how your parents dealt with money. I’m curious, so often we talk about how our parents influence so much of our behavior as adults and that the experiences that we had in some of our formative years oftentimes, good or bad, they carry through to us as adults. And a lot of financial advisors, that’s one of the things that they work with their clients on is maybe helping overcome some of the behaviors that they learned maybe when they were growing up or that they saw being modeled by parents or by other people. So what were some of the things that you learned from your parents that are still influencing you today in terms of how you think about money and maybe how you work with your clients and their money?
Samuel Deane: Yeah, that’s a great question. I come from an immigrant family and that has largely shaped my life, my aspirations, and my perspective on a lot of things. Actually, my parents are from Guyana, which is in South America, and I was born in St. Lucia. So we came over here to America in 2000. And just to give you a little background about my parents, they were very, very poor. Like bottom of the barrel poor in a third world country. My dad didn’t graduate high school. I would hear stories about how poor my mom and her sisters were all the time. Even today my mom was telling me a story about how she’s proud of me, just seeing where I’m going and where she comes from. There was a time where my grandma told my mom that she couldn’t go to school because they couldn’t afford transportation. And my mom went out and started baking things and cleaning people’s homes just to have that money to still be able to go to school. And so just coming from that and us moving to America in 2000 … And my mom was a registered nurse and my dad, when he came here, his thing was to get a CDL license so he can get some sort of a driving job because those were relatively easy at the time.
And he would deliver food to grocery stores. And my mom came here and she passed the nursing test and she became a registered nurse so that was a really positive and life changing moment for us. When we came here we were living in … You can imagine a brownstone. And there were different families that lived in that brownstone and the three of us lived in one room. Everything else was just shared space. Living room, bathroom. I don’t even remember if we had a living room. It was just the kitchen and the bathroom and those sorts of things. And we went from that to living in someone’s basement to then living in a one bedroom apartment, to then owning a five bedroom home in Long Island. In the suburbs, white picket fence, literally the American dream. And for me, when I think back on that, they really did everything that they needed to do to shift our family’s trajectory. They came here with nothing, with help from no one and really hustled and did everything the right way and did what they had to do and be focused to provide for me.
And to get into the examples around ownership and equity, my dad is not that much of a risk taker and my mom influenced my dad for them to get a few real estate properties. And again, going back to her starting a business, seeing those things and seeing how she was so driven to be successful, I can honestly say that although I’ve seen a shift from where we were to where we are now, there was never really a moment where my parents told me no on things that I absolutely needed. So that played a huge role in how I saw money and the type of hard work I saw them putting in. I was very quick to be able to grasp the idea that with hard work comes reward. And they were savers. Again, I know people that’s been living here for years that still haven’t been able to purchase a home and my parents were able to do that in five years. And not to brag, but that just goes to show the type of prioritization that they had and the hustle that they had and the grit that they had to do the things that they needed to do.
So those sorts of things always stick with me. It shapes who I am today and the type of drive that I have is because I want to be able to continue what my parents started for future generations of my family.
Steve Sanduski: Yeah. Well, what great testament. I mean, your success is a great testament to the values that your parents have instilled in you with a masters degree and being your own business owner, a successful financial advisor. And are you in the CFP program?
Samuel Deane: I was scheduled to take the CFP in March and corona happened.
Steve Sanduski: So you’re almost there.
Samuel Deane: Yeah. It got postponed to July and then it got postponed again to September. So hopefully by the end of this year, god willing, I will have that designation all wrapped up.
Steve Sanduski: Okay. Well, I’ll look forward to seeing you announce that on Twitter. And all the congratulations that’ll follow. So if you had to maybe distill down the two or three values that your parents instilled in you, you mentioned from hard work comes reward, you talked about grit, what would you say would be maybe the two or three values that you’re carrying on as a legacy to your parents?
Samuel Deane: If I could sum it up in one phrase, it would be a bible verse. Philippians 4:13. That says, “I can do all things through Christ who strengthens me.” That has been my staple and my mantra that I cling to in any and every situation where I feel some sort of doubt. And that obviously has to do with a lot about how my parents raised me and what they taught me to believe and those sorts of things. And again, it ties into what they’ve been able to achieve. I’ve literally seen us go from one situation and transition and progress throughout the past 20 years that it just gives me that much more reason to live my life according to that bible verse.
Steve Sanduski: Yeah. Excited. I appreciate you sharing that. Let’s delve in here with the business. So you narrowed in on or zeroed in on this millennials in tech niche. So tell me how are you going about doing that? Maybe from a marketing standpoint. Or how are you communicating that message that you have this niche, this area of expertise? How are you getting that message out to your ideal audience?
Samuel Deane: That’s a great question because I initially wasn’t too sure that I could have been a successful financial advisor because I don’t necessarily have that alpha male personality. I’m not the type of person that’ll approach people with, “Hey, I’m a financial advisor. This is what I do.” And cold message and cold call and walk up to strangers. For the most part I felt like that’s what the industry was like. And part of me deciding to have this niche is because it makes marketing my services and growing my client base a lot easier. So my strategy is very much an inbound marketing strategy where I use social media and I put out content on certain platforms that will help people. That will educate people. That will help them make educated decisions on when should I exercise my stock options? Or what are RSUs? And how can I align my 401K? How can I budget properly? Really putting out content that is very specific to a person’s pain points.
I mentioned that my fiance, soon to be wife, is a product designer, and part of UX design is really just identifying who your ideal user is. So I kind of stole that from user research methodologies where we’d literally design an avatar or a persona and say, “Okay, well, describe to me your ideal client.” And I tried to get as specific as possible, whether it would be things like millennials, married with kids, both work in tech, listens to trusted friends when it comes to money resources. Really try to get as specific as possible and try my best to put out content that resonates with that particular person. And whenever that person … Hopefully that they follow my content and subscribe to my newsletter and like my stuff on social media and those sorts of things. At some point when they experience a life event, I hope that I’ll be first in mind. And that’s sort of how I go about culling my business. And I believe that you can’t make someone want a financial advisor. It has to be a life event that happens to want someone to seek that out in the first place.
The demographic that I serve particularly is black people from my community. If you go around and ask them, “Do your parents have financial advisors? Do your friends’ parents have financial advisors?” For the most part they feel like it’s not a necessity. I remember telling my dad, “Hey, I chose to start my own business.” And he was like, “Well, why not just be a lawyer or a CPA or something where people have to come to you?” That’s his thing. He doesn’t like going out to people. He doesn’t like rejection. He’s like, “Why don’t you just do something where people have to come to you?” And I’m like, “Dad, you just …” He just don’t get it. But I certainly use social media to really market and really get in the ear and the eyes of those people where my content would resonate the most. And I know it’s not going to resonate with everyone and that’s certainly okay because I’m not necessarily looking to work with everyone.
Steve Sanduski: Yeah. And one of the nice things about having a niche is that you can … As you mentioned, you’ve got your avatar, your client persona where you’re very clear on here’s who I work best with, I can add the most value to. And when you know what’s important to them, as you’re doing, you create the content that is specifically designed to catch their attention. And when they do have that trigger event, that life transition taking place, if you are out there and they’re familiar with you, chances are they’re going to reach out to you because you’re the one who has most clearly spoken directly to what their needs are.
Samuel Deane: Right. For the most part, when you really meet with enough people that are in the same situations, you’ll notice that their pain points are usually the same. Maybe they’ll share similar goals. They may not be the exact same goals, but their goals will be similar. Their backgrounds will be similar if they’re coming from the same community or the same generation where most of my clients have student loans. So there’s a sort of relativity factor there where they’re sitting across from someone who also knows what it’s like to be the first person in their family to graduate college or to have a fiance that has equity comp. So it’s probably more likely that I actually do know what I’m talking about. Things like being a millennial and certain perspectives that people have about millennials or there’s certain things that this generation has gone through that other generations haven’t. So that relativity factor is certainly there and when you sit in front of enough people and you start to realize …
There’s some times I sit in front of people and I can almost tell them their pain points before they even say it and they’re like, “Wait a minute. How’d you know?” And I’m just like, “I’m just that good.” But really just when you see it enough you’re able to predict what some pain points are, even bring to light some pain points that they may not even know exist. So I do find that there is some benefit in that as well.
Steve Sanduski: And are you finding that most of your clients are coming from a certain type of company, whether it’s a certain size or a certain industry? Is there any common thread from that standpoint with the niche?
Samuel Deane: Most of my clients come from bluechip tech companies.
Steve Sanduski: Okay. So like the Googles and big companies like that?
Samuel Deane: Yeah. Spotify, Etsy, Microsoft, Twitter. Those are the companies I can say off the top of my head I have quite a few clients at.
Steve Sanduski: And you’re based in New York, right?
Samuel Deane: Yes.
Steve Sanduski: Yeah. So are you attracting people across the country or are you really more within the local greater New York City area?
Samuel Deane: Although we’re based in New York, I run a location independent firm. So I have clients in California and in the DMV area and across the country. And that’s the beauty of technology right? Back when I was planning and thinking of well, I’m in finance now, is there a way that I could still be in finance and sort of be my own boss, I wasn’t necessarily sure how I could do that or even how could I afford to that. And when I found out, okay, I can build my own wealth management firm and it’ll cost me a couple grand a year just simply for overhead and I wouldn’t necessarily need staff because technology has become so advanced, I think that also played a huge role in what I and many other independent advisors have been able to build. Being able to leverage the technology for cost savings and saving on staff and just infrastructure has been, I think, a game changer in the RIA landscape.
Steve Sanduski: Yeah. I totally agree. I’ve essentially been location independent for the past 15 years and it’s only doable because of the technology. And even with the pandemic that we’re in, if we would have had this pandemic even just 10 years ago, I think it would have been a very … I mean, it’s really bad obviously. But it would have been even worse if this would have happened say 10 or 15 years ago when the technology to work from home wasn’t nearly as advanced as it is today. So it’s certainly a blessing out of this pandemic, not that there’s anything to be thankful for. But just the fact that we do have technology that allows a lot of people to continue to earn a living while trying to social distance. That’s one benefit certainly I think of technology here.
I also would be interested in learning, when it comes to the social media channels that you’re using, are you finding that one social media channel, whether it’s Twitter or Facebook or LinkedIn or Instagram or something else, is there one that seems to attract more attention for you or attract new clients for you?
Samuel Deane: That’s a great question. I think it’s a mix of them all. And I can’t say that someone has said, “Hey, I saw you on Twitter. That’s the reason I reached out to you.” I think it’s a blend of they may have seen me speak somewhere or a client may have referred them to me, and on top of them seeing my stuff on Twitter or on Instagram I think that those social media content is more of a thing that people go to to really see what you know and see what sort of credentials you have and see how you think and sort of get an insight into what your personal life is like. And that’s, I guess, the benefit. It makes clients feel like they know you and they’re I guess more willing to work with you in that sense.
I didn’t have any social media while I was in business school. I just wanted to focus on school and work and get to the grind. And once I started my firm, that’s when I realized, okay, I should get on social media and try to decide which ones. Because I had it before and I sort of knew the distractions that can come with social media as a millennial young person wanting to be successful and trying to avoid keeping up with the Joneses and those sorts of things. I just decided that I was going to delete social media. So when I … I got really intentional about what I was getting it for and really aligned certain goals with the actual platform. So for Twitter, I found that it’s most beneficial to really just network with other peers in the industry. Everyone that I follow on Twitter works in finance or is finance adjacent in some sort or maybe in tech as well. But for the most part, a lot of, I guess, clients that find me and that ends up finding me on LinkedIn or is really just referred to me. LinkedIn is where I’m putting more professional content for clients to read and Instagram is just more so just a personal thing that I have where I share about my personal life.
If I’m working out or if I’m going on a date with my fiance or if I’m just hanging out with friends or something like that. So I think I definitely have a goal of using all of the platforms. Not all of the platforms, but those three platforms and being really intentional with how I use them. And again, I can’t say that any one is the best for getting clients or that I’ve had direct growth from social media, but it’s certainly helped clients understand more about who I am, see how I think, where I come from, and those sorts of things.
Steve Sanduski: Yeah. So really a combination of all of them. And yeah, you mentioned Twitter. You’re using that a lot for the peer network and I do hear that frequently as well from advisors that there is this FinTwit community out there and it’s pretty active. And yeah, it’s easy to … And I find myself too spending a lot of time on Twitter. And there’s all kinds of things that you can learn and yeah. So that’s very interesting.
All right. You’ve got this expertise in working with millennials in tech and then a further expertise in stock compensation. And did you decide that you needed to be really well schooled in the stock compensation area? Because so many of the people that you work with, that’s a major part of their net worth over time is the stock compensation. Is that sort of the connection there?
Samuel Deane: Yeah. That’s 110% where it came from. I guess the way I thought about it was well, what demographic can I work with and would enjoy working with? And originally, quite honestly, it was just millennials. I was just focusing on working with millennials. And I came to a point where I realized, wow, millennials are anywhere from 25 to about 40 right now and that’s like three different life stages that you could be in. And I realized that that wasn’t as specific and that it was difficult to build a firm … Although serving one generation, it’s completely different working with a 25 year old and with a 40 year old. I realized that I maybe should get a little bit more specific. And once my fiance started working in tech and I started to see some of the offers that she would get and the equity compensation, I thought to myself … I guess thinking from a business perspective I was always thinking, well, how can I be competitive if I’m going to start my own firm? Because as a 23 year old thinking I’m going to be competing with a Merrill Lynch and JP Morgan and stuff like that, I’m like well how can I really build this to be competitive?
And I didn’t know a lot about the RIA space at that point. And from what I knew, a lot of financial advisors were generalists. And the millennial thing was starting to catch wind with me. But it wasn’t picking up fast enough and so I decided to double down and be more specific and again kind of get into tech and I realized that equity comp was a thing. And my decision to work with tech professionals is what led to me deciding that I needed to get specialized knowledge in equity comp and was really doubling down on that. And instead of saying that I’m a financial advisor for millennials in tech, I can say I’m a financial advisor and I focus on equity comp and naturally people in tech would look twice because they know that that’s something that they’re experiencing. So it was certainly due to personal experience of my fiance being in tech that led me to look into that a little bit further and led me to make the decision to focus on equity.
Steve Sanduski: Yeah, well, I like how you shared some detail with that because another question I wanted to ask you, and you basically answered it, was yes you’ve got the niche millennials in tech, but then within that you’ve got specialized expertise within that niche. So when you think about, let’s say you have a perspective new client that you’re talking to, and maybe they’re interviewing you and they’re interviewing two or three other financial advisors. So then my question was going to be what is your point of differentiation? If they’re talking to you Samuel, what are you going to say to them that says here’s why I’m different than the other three advisors that you’re talking to? And the way I like to frame it is how can you make it a binary choice? And what I mean by that is if they’re talking to four people, and you’re one of them, how can you get to the point where it’s either you or the other three are all the same? But you’ve really differentiated yourself so it’s only a choice between you and the other three kind of viewed as one unit. So now you’re at a 50/50 chance.
Would you say that it’s this stock compensation expertise that is the thing that you would hang your hat on and say, “This is what really makes me special and this is why you should really strongly consider working with me versus these other three that you’re interviewing.”? Is it that or would it be something else do you think?
Samuel Deane: I think it’s certainly that and I think it’s a combination of a lot. I’ll say that when I sit down with clients that work in tech and they’re looking for an advisor, if they’re not interviewing other advisors who have special knowledge in equity comp, I’m really confident that that client would choose me because everything … And again, this is bias, but I feel like everything that I’ve built, I’ve built the business specifically for this demographic. And so if you’re shopping around and looking into different things, this firm will feel like the firm for you if you’re that ideal client. So I never really feel as though I’m in competition with others. And if someone were to not choose me I think it really boils down to maybe just it’s not the best personality fit. Not so much competence or financially I can’t get the job done. If that makes sense.
In terms of differentiation I think perspective comes into play here. The clients that I’m dealing with, for the most part, they’re comparing me to Merrill advisors and JP Morgan advisors, Wells Fargo advisors, not so much other independent advisors. So I’m able to speak to things like, we do comprehensive financial planning on top of investment management. We don’t just sell you products and do asset allocation for you and just sort of leave it at that. We are there step by step doing the comprehensive plan and really just explaining what comprehensive financial planning is and really just helping them understand how we align all the moving pieces. The fact that we’re a fee only firm. My firm specifically, we have no conflicts of interest. I actually had my life insurance license before launching my firm and I chose to let it lapse because I wanted to be fee only and not fee based and literally have no conflicts of interest. Because I know that that transparency plays a huge role in the decision that people make to hire a financial advisor.
It’s one thing when you have to try to understand all the disclosures and the different … Just really trying to understand the environment and navigate the waters of finding a really, I guess, ethical advisor, and there’s another thing when you don’t even have to worry about that because that person’s business model is already set up to be 100% transparent. So when I’m talking to people and I’m assuming that they’re interviewing with advisors from different brokerage firms or wire houses and not just RIAs, that is something that I speak to that’s a differentiator on top of the equity compensation knowledge on stock options, restricted stock, and so forth. And I think a third layer is the tax planning and preparation that goes into equity compensation planning. So I would say it would be … The three layers of specialization, if I had to explain it that way, would be we do comprehensive planning as well as investment management. We have specialized knowledge in equity compensation as well as tax planning and preparation.
Steve Sanduski: Okay. And as you think about a niche, do you think there is any downside to it? I know some people are concerned about, well, I don’t really want to get too narrow focused because what if someone with a couple million dollars in investible assets happens to knock on the door and they’re not in my “niche”? I’d hate to turn them away. So do you think there’s any downside? So that, and maybe a second part of the question is, will you work with people that are outside of this millennials in tech niche?
Samuel Deane: Personally, I’ve made it my decision to only work with people who identify as millennials in tech. I really enjoy compensation planning. Outside using it as a competitive advantage or using it as a differentiator, I genuinely enjoy the planning that goes around equity compensation rather than the regular … I’m sorry. The regular max your 401K and those sorts of things. It excites me, it challenges me, and I feel like it helps me grow professionally because no two situations are the same. I think that’s a personal decision that I’ve made. If you do decide to have a niche, I don’t think you have to go all in on a niche and say I’m not working with anyone that doesn’t fit this criteria. I think I read somewhere that if 50% of your clients identify with a specific group, then that can qualify as a niche. So you don’t need everyone to fit into that demographic and I guess you can look at it as if someone with a large account comes across and they don’t fit my criteria, will I or will I not work with them? I think it really comes down to a personal decision and what you want to build.
I think the industry has rhetoric of go big or go home and personally, I try not to think of it from a do I want to build a lifestyle practice where working with a niche can be profitable or do I want to build an enterprise where it wouldn’t be possible to work with a niche with an enterprise. Or it would take you a very long time to build that. My vision isn’t really aligned with either of those two things. I really just want to build a purpose driven company that doesn’t just make decisions to maximize the value or the growth of the business alone, but instead really chooses a path that aims to be the best at what we do, which is financial planning for millennials in technology. And wherever that takes me, it does. But that’s sort of what I’m focused on in regards to what I want to build and things like that.
Steve Sanduski: Yeah. Where was I going to go with this? You gave me a great lead in there. Oh, I know where I was going. You’re accepting clients from all over the country. Let’s say that you have a new client from Microsoft and they’re based in Seattle. How does the onboarding process work when it’s totally virtual and you probably are not meeting this person in person and may not for years? So how does the onboarding process work and then how do you really develop that relationship from a virtual standpoint and be able to deliver the way that you want to even though they’re thousands of miles away?
Samuel Deane: Yeah, sure. I think in terms of developing that relationship, I make it very clear to my clients in the beginning of the relationship when they choose that they want to work with me, I make it very clear what my goals are. And that’s that I want to run a tight ship. I want to have a very close relationship with everyone that I work with. I want it to feel like your family and I want you to feel like I’m going to take care of you like we’re family. So with that, in my first meeting … And people have said that I’m going to change this as I grow more, but in my first meeting when a client is trying to decide if we’re a good fit, that first call is like an hour. And it’s really just me asking them certain questions, trying to get to know them better, helping them understand what it is that I do and how it could be of benefit to them. Because again, a lot of them have never had any experience working with an advisor. They don’t necessarily know what an advisor does. So I like to spend a lot of time just really diving into all the ways that I can be of service and to be beneficial to them.
And when it comes to onboarding, everything is all digital. We’re a paperless firm. Unless a custodian asks for me to fax them in something that needed a wet signature. But we’re a paperless firm and usually when clients send that email and say, “Hey, I’ve made a decision. I want to come on board.” I have a welcome email that essentially has links to set up their billing account, links to a DocuSign that goes out that has their onboarding paperwork, links to a data gathering platform that I have that’s online where they can submit all of their statements, fill out demographic information and all sorts of things. And I’m able to collect data digitally and then we will then talk about it in the next meeting virtually and sort of just dive into talking about where they are now, what they own, earn, owe, those sorts of things, and then really just start to flesh out well, here’s where you are now and here are some of the things that we need to do to get you to where you want to be. And that all takes place virtually.
Steve Sanduski: How about pricing? How are you pricing your services?
Samuel Deane: I have a flat fee. And the flat fee includes financial planning, investment management, and estate planning. And because I like to run a tight ship, I let clients know, “Hey, with this flat fee you have access to me as frequently as you want. And I kind of got this idea from Michael Kitces where have has monthly touchpoint meetings where he assigns certain areas of financial planning to a particular month. And clients that need a checkup in that particular area would get a phone call or an email and say, “Hey, have you assigned all of your beneficiaries on your accounts?” Or, “Let’s do a life insurance review and make sure you have enough coverage.” Or, “Let’s review your portfolio and see if we need to do any changes or make any allocation changes there.” So I don’t meet with every client every month, but I do let them know that … It just goes to show that you and I can speak at any time. You have unlimited access to me. And again, that kind of ties into the type of relationship that I want to have, the type of comfort I want my clients to have, and them to really know that they can sleep at night knowing that they have someone that’s being very diligent with their finances and that they can get in contact with at any time.
And I think that really just ties into the trust that is needed to have a successful planning relationship.
Steve Sanduski: Well, let’s switch gears here for a minute, and let’s talk about the industry. We’re in this pandemic, and I think as a result of the pandemic there are a number of trends that have been in place that I think are being accelerated because of it. One of course would be this move to virtual and that was already in place, but I think because we were forced into that, I think that’s accelerating and that will likely be a long lasting change. But what else do you see evolving in the industry from your vantage point? Are there other trends that you think are important that financial advisors should be paying attention to? What are some of the things that you’re paying attention to or maybe changes that you’re making in your business as a result of what you see on the horizon?
Samuel Deane: Sure. Because of the clients that I work with, that could be why I have this opinion, but I do believe, and we were kind of chatting about this in the beginning of this call was that I personally think that investment management has become commoditized and will be commoditized even further as time goes on. And I think that’s why having this financial planning designation really sets you apart from everyone else because it shows that you’re capable of doing things that Vanguard Robo advisor cannot. And as time continues, I think that investment management is somewhat going to just be expected from clients. I think the focus is going to be on financial planning but even more specifically in the tax planning. I do think that advisors are going to have to find ways to differentiate themselves. As consolidation happens and depending on the size of your firm how you can be affected by that, I firmly believe that as a niche firm that has a specialized capabilities, the merger and acquisitions that are happening in this space don’t really frighten me. Again, because that’s really at the bigger enterprise level.
So I really feel like the investment management piece is being commoditized and the value is really going to be in financial planning and tax planning. Every client that I sit down across, literally almost every one … I actually recently changed my business model where I had investment management fees and financial planning fees separate. In the beginning of launching my firm, I still have some clients that only do investment management with me and some that have both. And I’ll say that sometimes when clients come down and sit with me they’ll say, “Well, no, I got the investment stuff under control. I’m good.” People want to invest and they want to learn how to invest. I guess, specifically people from my generation are just being more hands on with investing as you can sort of tell with Robinhood.
Steve Sanduski: Yeah, I was just going to say. Yeah, they’re saying, “Yeah, I’ve got Robinhood. I’m good when it comes to investing. And I’ve got Dave Portnoy and I get my advice from him.”
Samuel Deane: Exactly. Yeah. And I think because of that, it’s much harder to budget and plan your goals than it is to get on Robinhood and buy some stocks and feel like an investor. So I do think that plays a role into the commoditization of investment management. I could be wrong. It could very well be that the clients that I’m working with, their more urgent needs are financial planning and tax planning because there’s complications around those areas as it pertains to being in that industry. So that’s just the path that I’ve chosen to take.
Steve Sanduski: Yeah. And I think the tax planning is really important. And you mentioned that that’s an area that you certainly specialize in. And I hear that more frequently from financial advisors that having an expertise in tax planning is a great lead in for financial planning because we all have to pay taxes and in the Trump administration taxes went down. And if we end up with a Biden administration, chance are taxes are going to go up. So I think one thing that we can count on is taxes are going to change over time and oftentimes they tend to get more complicated, not necessarily less. And that’s-
Samuel Deane: Almost every client that I meet with lead with taxes. Like, “Hey, I have equity comp. I don’t understand my taxes.” First of all, they ask, “Do you do taxes? Can you help with that?” That’s usually how leads usually come in is help around taxes as it pertains to equity comp. That’s usually the first pain point that they have.
Steve Sanduski: Mm-hmm (affirmative). Yeah. Yeah, and one of the advisors I’m thinking of here that was on one of my recent podcasts, Erin Scannell, and we’ll link to his in the show notes, but he has a strong tax expertise and one of the things that he does really well is … And he works with fairly high net worth people, high income people. He helps them shift the source of their income so that in the future they get their income from sources that are taxed more favorably. So he’s got certain things that he’s able to work with. Oftentimes they’re either senior executives or they might be business owners where they have some ability to influence how they receive their income, the different ways that they receive it. So that has been a huge benefit to him so I think there’s lots of opportunities in the tax area to really show tangible value. Because you can show, “Hey, on your current trajectory, if you don’t do anything over the next 20 years, this is how much you’re going to pay in taxes. Whereas if you do these two or three different things that we talk about here, you might save half a million dollars in taxes.”
Samuel Deane: If there’s one thing I’ve learned it’s that people don’t want to pay taxes.
Steve Sanduski: Right.
Samuel Deane: Right. And so if you justify your fee by showing them the tax savings that they’ll have by working with you, it’s almost a no brainer.
Steve Sanduski: Right. Yeah. Great. All right. One other area that I want to touch on here is you’re an entrepreneur. You’ve seen your parents, how they really worked themselves up and been able to generate a good living for you and your family. What are some of the lessons that you’ve learned along your entrepreneurial path here in terms of some of the ups and the downs and lessons learned?
Samuel Deane: Aw man, that’s a great question. As I am still learning each and every day. I would say the first … This past June made two years of me running my own firm. And I would say that the first year one thing that I learned was having a support system and mentorship and I guess a peer group that you can go to is invaluable. My first year I felt like I struggled a bit because I didn’t necessarily have anyone to go to if I had any questions about what CRM is better or what has the best integrations or what do you think about this business model or this fee structure? Can you find any flaws in that? I didn’t necessarily have anyone to bounce any ideas off of so I think that was the lesson that I learned. And I started reaching out to people that I met on FinTwit to really just build my tribe and build my support group and my peer group who I felt like I had things in common with, who I felt like I could learn from and can learn from me as well with whatever I had to offer. So my first year, that lesson was really clear to me.
Steve Sanduski: And did you get that through FinTwit or was there an actual organization that you joined?
Samuel Deane: I did. I absolutely got that through FinTwit. I paid attention to the people who would reply back to you and who would communicate and really had a sense of community and wanting to build that community within FinTwit. Some of those people like Justin Castelli, Tyrone Ross, Dasarte Yarnway, Emlen Miles-Mattingly. I can go on and on and on about … Doug Boneparth. All the great people that I’ve met on FinTwit that has been really instrumental in my development as an advisor. Being able to just have monthly calls with another advisor who has millions of AUM where I’m just starting out from zero was really transformational and just helping me bounce ideas off of each other and learn from their experiences and the mistakes that they’ve made. When I first got into the industry, I knew, again, that I wanted to be a business owner and I knew that the CFP had a three year experience requirement. So taking the offer, my whole plan was to go in there, be under a CFP, get the three year requirement, and leave right after I got it to start my own firm. That was the plan. I was very intentional about that.
So because I didn’t spend a lot of time … I spent a lot of time learning about the industry but really focusing on what do I need to do to have my own firm. So there was some things that I could have picked up more on had I, I guess had a different focus. But I definitely found that in building genuine relationships with some of the advisors on FinTwit.
Steve Sanduski: Mm-hmm (affirmative). Any other lessons or other resources?
Samuel Deane: Yeah. As far as resources, Kitces was a huge resource for me. I would read all his blogs and listen to his podcast. The same XY Planning Network. And as far as, I guess the second lesson I learned, which was my second year. I guess I’ll outline it that way. Was that the execution is what really matters the most. You can sit and plan and plan and plan over and over again and try to find the best way and the perfect way to do certain things, but execution beats planning all the time. And again, that’s from personal experience. I feel like I would have a good marketing strategy, but I’d be too nervous to put myself out there or I wouldn’t fully execute because I’d be shy of what people would say and things like that. So really just having my support group and even if that’s what I have to lean on in those days where I need more confidence to give me the confidence to execute on the things that I’ve laid out without being apprehensive about doing so.
Steve Sanduski: Excellent. All right. Well, we’ll wrap up here with just a couple things. One is I always like to ask as we get ready to wrap up here, is there anything else that you want to share or is there a question that you were just thinking gosh, I wish Steve would ask me this question? And if so, here’s an opportunity for you to share anything else that you might want to share.
Samuel Deane: I don’t necessarily have a question per se, but one thing I do want to say is that for me, it’s extremely important to focus on building generational wealth within my community. I don’t mean to give grim or anything but what I’m doing is really special to me because when you look back at history black people are the only people that were denied wealth. We came into this country representing wealth and we are the only group that has systematically been denied wealth consistently and throughout history. So it’s really important for me to do what I can and play my part and help people from my community build wealth so they can do the same and pay it forward for them. So I just wanted to point that out and say that what I am doing is I’m not doing this because I just wanted to be a business owner or I like money and finance. There’s real purpose behind what I’m building and when I mentioned that my vision is to build a purpose driven company, that’s exactly what I’m referring to.
Steve Sanduski: Yeah. And thank you for sharing that. And I think about the values that your parents have instilled in you, how the behavior that they modeled that you’re now following through and so people like you and Tyrone and Emlen and Dasarte. I mean, there’s a fast growing contingent of black advisors who are really out there and doing a great job. And I think hats off to you for modeling the behavior so that other people in your community can see and can build wealth. And you guys are living examples of making that happen. So hats off to you for that.
Samuel Deane: Thank you.
Steve Sanduski: All right, well let’s wrap here with just a handful of rapid fire questions. I’m all about continuous learning so is there something new here that you’ve learned in the past 12 months?
Samuel Deane: What have I learned in the past 12 months? I’ve really learned a lot about myself. I’m entering a new chapter in my life where I’m going to need to be more responsible, not only for myself but for people around me in the family, and I’ve really taken the time to try to be more self aware about some things that I may have buried from childhood. Whether it relates to me being an entrepreneur or my money habits. Pretty much any and everything. It’s just my way of trying to be the best me for the people around me who are depending on me. So one thing I learned about myself is that I am not as self aware as I thought I was and so just being more intentional about really understanding my feelings and being able to sit with my feelings rather than doing things that distract me from them has been key for me in the past 12 months.
Steve Sanduski: Mm-hmm (affirmative). Okay. And you mentioned that you found a community on FinTwit and other people that you’re following and having conversation with. Is there someone out there, it doesn’t have to be FinTwit, but is there a leader out there that you admire? It could be someone that you maybe know personally or maybe it’s just someone that you admire from afar that you respect and maybe a lesson that you’ve learned from them.
Samuel Deane: Within the FinTwit space?
Steve Sanduski: No, no. Could be anywhere. Just anybody that you look up to that you admire and maybe a lesson that you have learned from them that you try and model yourself.
Samuel Deane: It would have to be my parents.
Steve Sanduski: Yep.
Samuel Deane: It would have to be my parents man. They’ve been instrumental in my development and that’s probably more than likely the same for a lot of parents out there, but I get everything … Everything that I know is from the things that they’ve taught me. The drive that I have. The drive to be successful. The idea that I can do anything that I put my mind to. My parents brought it to my attention the other day that I didn’t really realize, they were like, “Everything you said you wanted to do since you were a kid, you’ve done. Why should this be any different?” And I was just like, “Wow. That was a bar dad.” But yeah, I think it certainly comes from my parents and that’s who I look to as … At least the things that I’ve learned from them are what I cling to and they represent my guiding light if you will.
Steve Sanduski: Excellent. All right. One final question here. Do you have a motto for life? Maybe a short statement, a few words that you really try to live by.
Samuel Deane: Yep. And we spoke about it a little bit and-
Steve Sanduski: Philippians 4:13.
Samuel Deane: Yep. I can do all things through Christ who strengthens me. That’s my motto. I don’t know if that’s seven words or not, but there it is.
Steve Sanduski: Yeah, well I’ll take it. So yeah, great. Awesome. All right. That’s a great place to wrap up here. So Samuel, really appreciate you spending some time here. Congratulations on your business. Congratulations on your upcoming child and just great news for your family so wish you all the best.
Samuel Deane: Thank you so much Steve and thanks a bunch for having me. I had a great time.
Steve Sanduski: Yeah. Me too.