How advisors collaborate

Intro:

Welcome to the Financial Planner's Desk Podcast, a podcast designed for you, the financial professional. We'll keep you up to date on industry trends in technology and marketing, and we'll always keep you in the loop on new regulations. Here's your host, independent advisor at OSJ, Richard Oring.

Rich:

Hello, everyone, and thank you for listening to the Financial Planner's Desk. First off, before we even start, I just want to thank the listeners who already have downloaded the first couple of episodes and responded back to me. I was shocked to get emails thanking me for starting this podcast because they were happy to hear from another peer in the industry. It's different hearing from the vendors, the broker-dealers, the compliance. To hear from one of your own sitting at our desk, working with the clients, dealing with our compliance supervision, and the tasks we have to do to keep our clients happy, that was like the general gist I got from the emails and it shocked me that people took the time to email me. Thank you so much.

Rich:

Now, this episode, I'm going to have another guest, but this guest is also going to be a future cohost for the Financial Planner's Desk. And it was great when he reached out to me and wanting to participate in this because each of us already do our own individual podcast. We loved the format. We enjoy doing it. For those who know me, they know I love to talk, so anytime I can have a microphone in front of me or an audience, I'm here to talk.

Erik:

True story.

Rich:

That is true. This advisor has been in the industry since 2015. So it gives a unique aspect because I'm about 10 years ... How old are you, Erik?

Erik:

Goodness gracious, as of the recording of this episode, 41.

Rich:

And I'm 48. I know that doesn't sound like a lot of years in between, just the way we look at things, and technology, or client communication, or how we handle our business, I think both of us have looked at how we do things with a different lens of eyes. Sometimes we adjust the way we're doing it, or sometimes we just scratch them and say, "Hey, good luck."

Erik:

Different clarification. For clarification, I've been with this firm since 2015. I've been in the financial services industry since 2001. So I've been around for a little longer than just five-ish years.

Rich:

I actually did all my research all on your licensing history. You also got your first principal's license in 2006.

Erik:

Yes. Yeah, that was an interesting story.

Rich:

As you hear him already, his name is Erik Garcia. Welcome to the show. I truly know that you're going to be a great asset to this podcast. It's amazing how you and I have the same goals for our clients and our practices, but like I said before, between our age, our past history in the industry, that we challenge each other almost daily. Erik is not just another financial advisor. He's a friend. I want to say a co-professional coach because we coach each other. And that's why it's great to have him because I would tell you that I probably speak to Erik once in the morning and once after the business day. And we recap on what we did that day, anything unique, any events, planning strategies we got to utilize, and we talk about it. It's nice to have a colleague who you can bounce ideas off.

Rich:

So, Erik, welcome. Do you want to talk a little bit about yourself? You mentioned a little bit when you got licensed, but there's more to it. Why don't you start off with talking about how you got in the business, and then we can kind of roll right into from where you got licensed to your first group you joined when you were a partner, and then how you got here. Let's just dig in.

Erik:

Yeah. So it all started back in 1979. No. I came into the business in 2001 and I was kind of I want to say destined for the financial service industry. My dad has been literally from when I was born, he was in the property and casualty industry,. So I kind of grew up in financial services. When I was at Tulane University, had a professor who I went to go see for office hours and he was trading one of his personal investment accounts. And he was an adjunct professor, so he ran a business here, and I'm out of New Orleans, he ran this business in New Orleans. And he's like, "Hey, you want to watch me trade my investment account?" I'm like, "Yeah." I mean, absolutely. This guy's high net worth. As a junior in college, it was exciting. For 45 minutes, he was trading on Yahoo and he was showing me all the stats that he would use to trade his stocks and that kind of gave me, I'd say one of my first experiences with the investment world.

Erik:

And I did a work-study at Tulane as well in the Freeman School of Business for Burkenroad Reports. And what Burkenroad Reports was a program at Tulane, the business school that did stock research on publicly traded southern small-cap stocks, so stocks that are based out of the South. And that was a fantastic experience working closely with the director and just really gleaning just a lot of wisdom from him. So that's kind of how I got interested in the investment side of the business when I finally graduated and ended up working.

Rich:

So, Erik, I got to interrupt real quick. When you said you went to Tulane, last night, we were having a Zoom meeting with my oldest son's college counselor, and part of the process is asking where you want to go to college, and he's like anywhere in the South. So I'm like Louisiana? I said, "How about Tulane?" How hard is that school? By the way, in the grading system in school's it's-

Erik:

Oh, it's not. I mean, I graduated from it. It can't be that hard, Rich.

Rich:

I was thinking the same thing, but it's actually graded as 11, 12 school, like University of Michigan, so it's not that easy to get into. What I learned is a 16 and a half-year-old does not look at Louisiana as the south. He looks at Miami with the bikinis as the South. So his mom said-

Erik:

I would say that Florida and then New Orleans, they're geographically southern, but I wouldn't consider them culturally southern.

Rich:

My son wants to go to any college where it's near a race track. His ultimate goal is to try to get into racing and open-wheel racing like Indy, but he knows the odds, so it's like every college football player knows the chances of getting to a pro is very difficult. But it's his dream. He puts a lot of time in practices, so good luck, Ethan. We wish you the best. So we have to plan the colleges around that too. Sorry, Erik, I didn't mean to cut you off.

Erik:

Roads in New Orleans are terrible. This is not the place you want to drive fast. Just for the record, if that goes into your son's college-making decision.

Rich:

I don't think there is a F4, which is like the minor leagues of formula one racing team near you.

Erik:

Hey, real quick, if you'll allow, and I'm going to get back to the story from Tulane before you interrupted me, Rich. That's all right. That's okay. I'm going to pause here and make this shameless plug. You were talking about college selection. On my podcast, Building Us Podcast that I do with a couples counselor, a family therapist, Dr. Matt Morris, we actually have a two-series episode. By the time our listeners on the Planning Desk hear this, it'll probably have been published already, a two-episode series on college, college funding, and we bring on a college expert.

Rich:

So, Erik, on the show notes maybe we can put a link to that episode?

Erik:

Yeah, let's do that. So let me get back to Tulane. So Tulane, I'm graduating. What ended up happening, I interviewed with a couple of big firms, investment firms, and I ended up working with the company that my dad represents because they had their own broker-dealer. So I was able to work directly with my dad in a team with him and still have access to the investment side of the business. But that broker-dealer was not really set up for ... It wasn't a very sophisticated broker-dealer. It originated as kind of like the investment arm for that specific insurance firm to do all their trading and whatnot.

Erik:

So what I quickly realized that that was not going to be able to support the direction that I wanted to go in. So fast forward, in 2008, after having a background in life insurance, property and casualty and doing some investment work, in 2008, I went completely independent on the investment side. There was a mentor of mine who invited me to join the independent BD that he represented. And that was a wonderful experience, got a ton of experience, with a lot of relationships. And I'm one who loves learning from other people. And you kind of opened with that. I recognize that I never want to be the smartest person in the room. I always want there to be people who know something that I don't know and I want to know what they know.

Rich:

I think I know where you stole that saying there.

Erik:

Who said that?

Rich:

That was Joe, one of your guests on your other podcasts. Was William, Bill? I'm trying to remember.

Erik:

Dr. Billy Williams.

Rich:

We got to get him as a guest on this show one day.

Erik:

Yeah, I'll get him on.

Rich:

Definitely. I got to tell you, I mean, I listen to podcasts every day. I listen to other professional coaches and things like that. He made sense. Things we take for granted and we know, he said it in a way where you feel like a complete idiot if you're not doing what he's saying.

Erik:

So I'll tell you a funny story on that. So Rich's referring to, he's actually a business mentor of mine, Dr. Billy Williams, and I met him through the insurance side. I still own an independent property and casualty company. I've got a business partner who operates it and I kind of help more on the strategy. But I met Billy through that industry. I mean, he controls over, I think, north of a billion dollars of insurance premium, so he knows what he's doing. Early in his career, he was going to Berkshire Hathaway business coaching conventions, paying godawful amounts of money to be in the room with, with top thinkers. And a friend of mine who actually encouraged me originally to get into podcasting is also a friend of Billy and he describes it as Billy will punch in the face and then gently catch you on a pillow. And he just tells you like it is, how to run businesses, how to build businesses. But anyway ...

Rich:

And that's what it sounded like on that episode.

Erik:

What's that?

Rich:

And that's what it sounded like on that episode of your podcast.

Erik:

It's what he does. So 2008, I go independent, perfectly happy where I'm at. Long story short, the principal at the firm of the investment group that we had formed calls me one day and basically said, "Meet me in Orlando. We have a meeting." So I was able to get some additional information and it was kind of a here's new Century Financial Group. We're moving to this firm. You're welcome to come or not come. And I was perfectly happy where I was.

Rich:

What year was that?

Erik:

2015.

Rich:

2015. Sorry, I thought you said 2008. I'm sorry, that's why I wanted it.

Erik:

No, 2008's when I went independent, I was perfectly happy where I was for seven years and then my world was changed.

Rich:

So I remember that day. The partner of that group rented this room, it was narrow but long, so it was compact. And I remember him talking, and then he had me, at that time, my partner who's still in the business, but I bought the practice over the last couple of years, give you guys our value proposition and what we could do to help you. And I remember the partner in your group, handed out all the forms, like all the paperwork to go ahead and have everyone sign off that they're agreeing to switch broker-dealers and signing off on it. And then there was one person the whole time looking at me and questioning or looking at your partner like, is really for our best interests? And you wouldn't sign. You wouldn't sign it at that moment. You asked me politely, "Can we step aside and talk about this?" Erik? Do you remember that conversation?

Erik:

I do. I remember it was an early morning meeting. It was at a restaurant. And you're talking about that room, then we walked out until one of the booths.

Rich:

Yep, wooden booths.

Erik:

Yeah, I do.

Rich:

No cushion. It wasn't comfortable.

Erik:

I don't remember the booth. I don't remember the specifics of the booth, but we shared a booth together day one.

Rich:

And do you remember what you were concerned, and what you asked me?

Erik:

I don't know. I do remember that you were working on a Mac.

Rich:

Oh, my Mac Air, at the time. So this is what I remember.

Erik:

That's what I remembered, like a firm that lets us use Macs. Fantastic.

Rich:

We don't. So this is what I remember. When I say we don't, you have to use Boot Camp, whatever they call it, to use windows for trading platforms, NetX, which is purging, parallel Boot Camp, same thing.

Erik:

Parallels.

Rich:

So I remember this. You're sitting there and at that point in your career, you started with this group and at that time, the principal was the lead person. He wanted to know the clients. He wanted to meet the clients. He wanted to do the investments. And at some point, you were like, no. I'm a professional. I'm not a solicitor. I want to learn the business. I want to grow my business. And you started that process already. I remember that you mentioned that you were glad you were taking some assets away from his management. I believe you were utilizing SCI at the time.

Erik:

Mm-hmm (affirmative).

Rich:

I know you're not using it now, but you were utilizing SCI and you started getting comfortable and you felt good and you wanted to continue growing it. And you were concerned about your future if you made the switch, how much control will you have over your book of business. And I think I honored my word when I said if it's your client at your book of business, to the point when you decided to leave that group completely, the partner threatened me that he was going to leave and take all his reps if I let you do it. And, what did I say to that gentlemen?

Erik:

I don't know. I'm still here. That's all I know.

Rich:

Right. I said, "If that's what you got to do, you got to go. But these are independent advisors, they own their book of business. You don't own their book. You have to add value where he wants to work with you. And you haven't done that over the last couple of years, or he hasn't felt that, or his business model's changing, so he's looking to make a change for whatever reason." It wasn't personal. It was what you wanted to be.

Erik:

What had started to happen was, as I learned the industry, I wanted to have more control over not the client relationship because I had that control, I wanted more control over the investment selections that we were doing. And at that time, and it worked well and I have no hard feelings or anything. I mean, it was a great experience. I learned a ton. I'm where I'm at today because of those relationships that I had back then. But I started getting into a little bit more of the I would say the behavioral side of the investment, and his style of investing was kind of this is the style, and you fit in or you don't fit in for the client. And I started to realize that doesn't work. That doesn't work for clients. The industry is moving away from that. I had some huge compliance concerns with that.

Erik:

So in talking to the broker-dealer, they were actually starting to introduce, in fact, they were in the process of introducing Envestnet as the platform across the BD. And SEI was one of the first managers on there. We hadn't started using Envestnet, but they kind of facilitated a direct relationship with me with SEI, and I had already started moving accounts. And it was a risk-appropriate thing. There were some clients that that style of management worked for, and I kept those clients there. And then there were other clients that that style didn't work for and I wanted to move them. And there was a fee structure that I had no control over. And I had some clients who were incredibly fee sensitive and I needed to do something about it. So that process was already started. And that's why I was sitting in the back and incredibly skeptical of anyone who was looking to merge with us without details or not merge with us, absorb us, I guess.

Rich:

I don't think we absorbed you. We always let you keep your independence with your assets and things like that.

Erik:

Oh, join. That we joined.

Rich:

Yeah, the group, joined the group, which hopefully you don't have any regrets. I don't think you do because you're still here.

Erik:

Yeah.

Rich:

And we're planning for the future.

Erik:

And now I'm going to cohost this show with you and I'm going to take over.

Rich:

So, Erik, I know that you have two businesses, that you have your property and casualty business, which you've grown to the point where it has multiple staff. You brought in a partner because not only was your property and casualty business growing, your investment and financial planning side of the practice has grown also. So I got to imagine that it's got to be difficult when you have two separate practices and prioritizing your time on both. I had a tax practice and I got to the point where I just couldn't do it anymore. So I had to sell my practice in 2011.

Rich:

Luckily, I sold it to an accountant who I knew really well. He actually did some work for me also, and he works in my office, so I still have that relationship with the tax clients, with the investments, as a team approach. But I know the struggles of growing two practices at the same time because I always look at businesses as a living thing, like it has to live. My attitude is when people say, "I retire, my clients will fizzle away," that's not how you live. You want to live and you want to keep growing. You want to stay healthy just like life. So my job is to keep my business growing and plan for the future and transition and so forth. And I think that's what you struggled with and created processes to deal with, so it's not an issue today. You want to talk about that?

Erik:

Yeah. So I've always kept the businesses separate, so it's actually two different ownership structures. I kept them separate for several reasons. One is my involvement on the insurance business was kind of a, I must say when I started it, I got pulled back into insurance. Because I had left, remember I had left in 2008, the insurance world completely. My dad was still in the insurance world. Now, he's captive, he's not independent. But in post-Katrina New Orleans, the insurance market was wild. And he had a lot of limitations and a lot of restrictions. I mean, he had 20-year relationships that were coming to an end because he couldn't help them anymore. Clients almost in tears, feeling so guilty that they were leaving my dad. And I kind of saw that as an entrepreneur, I'm like, oh my gosh, those are relationships. Relationships to me are more valuable than fees or commissions or anything. If I've got a relationship with someone, especially in the business world, that's invaluable.

Erik:

So at the time at a brother who wanted to move back to New Orleans, so I said, "Hey, move back. We'll launch a company. We'll launch the insurance company. You run it." And insurance was just not his thing, so he eventually left the business. But at that time in 2010, when we started it, he was running it with my current business partner, Giovanni, so them two were running it. And I was kind of hands-off other than the business end and the strategy and the kind of the planning end. And we hired some people and I did a terrible job managing it. And one day I woke up and I'm like this is not what I want for our business. So probably about three or four years ago, I got a little bit more involved. I'm part of a couple of different mastermind groups in the insurance space. And that's actually what led me to podcasting, some of those guys in those groups because they're very forward-thinking and progressive from a digital marketing standpoint. But met guys like Billy Williams and realized that, man, this business, it could be so much better, so much more profitable.

Erik:

So you mentioned processes, I got involved probably about two and a half years ago. Literally, I got to a point where I actually sat in, I guess, what someone would consider the lowest job role in the business, just like the front desk. I actually sat in that desk for three months and worked it because realizing it was the key to everything else that happened. It controlled all the data that flowed into the business, that seat was so critical and to understand how that seat worked was so critical to the success of the business. That really launched me into this building on our processes because relationships, as I said, are our most valuable asset, but relationships are very inefficient and you can not systematize, you cannot process a relationship. So I had to find a way to systematize everything else so that we had time to build relationships.

Rich:

Erik, you talk about relationships, I was talking to some religious leaders a couple of months ago, and I said, my industry, what I do for a living, and I don't mean an investment advisor, I'm talking about when you're doing full-blown financial planning. So a financial planner and a priest, a rabbi, whatever your religious, Reverend, whatever you call that leader in your religion is, we might be the only two professionals, maybe a psychologist, but I don't think everything you're going to talk ... You're going to do it with your mental issues. But we're the only two industries I know where people talk about their goals in life, their sorrows, their celebrations, everything, and what's keeping them up at night, what's going to make them happy, and that right there is the relationship. When you have a client and you started that 529 plan when their kid is two or three years old, and you're being invited to their college graduation party, that's cool.

Erik:

Have you ever had a client, you know they're about to tell you something and they kind of start, and then they stop. And they're like, "You don't share this with anybody, do you?" Have you ever had a client lead with that?

Rich:

I had a client where I go in their house and my picture's on their refrigerator with their kids. I said, "Why is my picture on your fridge?" They said, "The most important people in our life, we want to look at every day." How powerful is that?

Erik:

That's sweet. I tell my clients, I said, "Look, I need to know everything about you. If you want me to give you good financial advice, that's in your best interest and you're withholding something that's important to me, like I want to know if you have a rich uncle that you're going to inherit $3 million because that might change where we invest your money today. I need to know that kind of stuff."

Rich:

I always say, especially when it comes to debt planning, which I know you focus on the younger generation as a clientele to help them get organized and build wealth for them, I always say, when you have the husband and wife in the office, "There's no secrets. If you're hiding something from your spouse, be prepared to open up because I'm going to find out." Because I'm going to be able to track every single dollar going in and out using our software program, cashflow planning, so if you're trying to hide off paying a debt, you didn't want her to know about, it's time to fess up. If you're supporting a mistress, you better get rid of her because once you're sitting down with a financial advisor doing full-blown cashflow planning, we're going to know.

Erik:

I was working with a client recently, and he's an incredibly successful business owner, great relationship with his wife, family, but she's not involved in the businesses, and he just kind of tells her what's going on financially, that kind of thing. And we're doing some work for her as well and I reached out to her to have a conversation with her, obviously, because I can't do things for her without having a conversation with her. But I got the sense that she was kind of in the dark about the finances. So I called the husband up, I'm like, "Hey, look, this is totally up to you." and it was a relationship that I had been cultivating for years and years and years, and finally was able to bring them on as clients. And I said, "Look, one of the values that I bring to this relationship is we're not just going to talk about the technical side of money, but let me give you some advice for what it's worth."

Erik:

And I was a little bit more gentle when I brought it up. I said, "Hey, how about we schedule a meeting, the three of us, you and your wife and we just kind of talk about what you got going on, what's on the table. Because I think that if she understood more, that could prevent some potential fights down the road that might not have anything to do with money but if she feels like she's a part of the financial plan, a part of your financial decision-making, she's going to feel a lot more valued and that could prevent some possible relational issues down the road because I know how important relationships are." That's what my podcast is about, Building Us, with the couples counselor.

Rich:

So, Erik, I always try to keep these podcasts within around a half-hour give or take a few minutes out of respect for the listeners. There's a great podcast, I'm going to throw it out there, the Kitces' podcast, awesome podcast but they're an hour and a half to two hours long. So when I did this, when we rolled this out, I wanted it to be shorter. So if you had a commute to work, you can listen to it in one day, the drive there, drive home, done, move on. So, Erik, there's one thing I want to talk about. Where we are today, what we're working on, the issue with staff and processing, I don't want you to go so great into detail what were technologies and all that kind of stuff in great detail, because we can do that in a future podcast, but just talk about what we're working on, if you don't mind.

Erik:

So obviously, Rich is the principal of the RIA, and I'm just a lowly investment advisor rep at his firm.

Rich:

If you want, I can make you the executive vice president of the investment review committee.

Erik:

Could you give me a cool title like bankers, like executive vice-president? Awesome.

Rich:

Titles are cheap.

Erik:

What's that?

Rich:

Titles are cheap to give out.

Erik:

They are. Over the years, we realized that we both like to leverage technology in our practices. We share similar values from a planning standpoint. We share similar values from an investment standpoint. And we have pretty much the same tech stack for the most part and we realized that there was a lot of efficiencies, some economies of scale, I guess you could say if we started to maybe bring together some of our daily practices. So we're in the process of quite literally building out our workflows together to where eventually I'll be using Rich's back-office to process a lot of the regular tasks, I would say the non-advisor client-facing tasks.

Rich:

The admin work.

Erik:

Admin work, yeah. But just recognizing that, and I would even say for advisors listening or planners listening, is that particularly in this almost quasi-post-pandemic world that we're in, we have to be looking at our business model. We have to be looking at our business practices and ask the questions of, hey, how can I be doing this better, more efficiently, not for the sake of just being better or more efficient, but I think for the sake of being more relevant to our clients and relevant to where the industry's moving. And I think part of it is being more available to clients to talk about things outside of the regular investment advising, like the behavioral side of money is really important to me.

Erik:

The planning side is really important. I think that the investment side of the business, I know this is not always a popular thing to say, but especially as independent advisors, I mean, it's being commoditized to a certain degree. We're going to have to add value in other ways to our clients. So I think one of the things that Rich and I recognize this, hey, what's that value to add to clients. We come from very diverse backgrounds. We have another advisor that we collaborate a lot with, and the three of us have vastly different backgrounds so we were able to bring different perspectives from a client needs standpoint. And we're building business models and building a practice that's going to be, I think, relevant not only today but for the next 10 years plus

Rich:

Exactly. Hey, Erik, this is going to be the best part about you being the cohost, I don't have to do the closing remarks. But I will say thank you for wanting to be a cohost and wanting to grow this and help other advisors out there. I think that's great. It's very generous of your time. I appreciate it. But you know what, cohost?

Erik:

It's time for the closing?

Rich:

Co-host, it's your time to do the closing.

Erik:

Are we already closing? That's it?

Rich:

Yeah. It's a half-hour already.

Erik:

What should I say?

Rich:

It's close to my recording time, I don't know about after editing. Wing it, man.

Erik:

Just wing it.

Rich:

Just wing it.

Erik:

Thank you for listening to the Financial Planning Desk with Erik Garcia. Can I put my name first?

Rich:

Sure.

Erik:

Erik Garcia and Richard Oring. Hey, if there's any resources that we mentioned in this, we will make sure that we put those in the show notes. So if you find this valuable, we would love for you to share this with maybe some other advisors in your group. Leave us an honest, we want honest feedback and honest review, I want honest reviews, on your favorite podcast listening app. Hey, and if there are any topics or questions that you have for Rich and I, that you'd love to hear more about, go ahead and send those in. Rich, is there a way for someone to email you?

Rich:

Sure. I have an email address. It's for the podcast, it's plannersdesk@ncfg.com. That's P-L-A-N-N-E-R-S-D-E-S-K@N-C-F-G.com. We'd love to hear from you. We'd love to see if you want to be a future guest or topics. Don't be shy, reach out. This podcast is not ours. We want to create it for you, other advisors out there who may not be part of a big group who can't collaborate. There's a lot of advisors out there who are one-person shops, and they're doing everything. They're their business consultant. They're doing the accounting. They're doing the marketing. They're doing the servicing. So if we can give you some help to grow, that's what this podcast is about.

Erik:

Awesome. Thanks for listening, y'all.

Closing:

Thanks for listening to the Financial Planner's Desk Podcast. Feel free to share this episode with colleagues and other financial professionals in your life. And make sure you don't miss an episode, subscribe on Apple, Spotify, Google, or your favorite podcast app.

Disclosures:

Richard Oring's branch office is One Airport Place, Princeton, New Jersey. 08540. The branch phone number is (609) 924-2049. Securities offered through Royal Alliance Associates, Inc. Member of FINRA SIPC. Advisory services offered through New Century Financial Group, LLC, a registered investment advisor. Not affiliated with Royal Alliance Associates, Inc. New Century Financial Group, LLC, and Royal Alliance Associates Inc. do not offer tax advice or tax services. Please consult your tax specialist for individual advice. We make no specific comments or recommendations on any tax-related details.