How Transparency Propelled Growth from $1 to $4 Billion in 8 Years


Welcome to the fifty fourth episode of Our podcast series for advisors considering the independent space. Today's episode is how transparency propelled growth from one to four billion in eight years. A conversation with with Paul Pag. CEO and founder of PAG motto Carpe. I'm mindy diamond. And this is mindy diamond on independence. This podcast is available on our website. Diamond Dash Consultants Dot com breath and on adviser hub dot com as well as apple podcasts. And other podcast resources. If you're new to the series I encourage you to visit diamond. Dash consultants dot com slash independence. One Oh one for the top five episodes that will help you get up to speed on the basics of the independent space plus links to other episodes. You may have missed. And if you're listening to the series on the apple podcast APP be surely star rating in review as it serves. Herbs is a guide for us as well as your colleagues in the wealth management industry may be searching for valuable content to tune into the Forbes top wealth advisors list represents what many advisors hoped with spire too because to be included means. You're part of an exclusive. This group that has achieved exceptional heights in the wealth management industry. A group that in total manages nearly a trillion dollars in client assets but the qualifications off occasions to be recognized as a Forbes top adviser is not just about revenue in assets under management a large part of the process that Forbes and shook research go through with advisor candidates is based on identifying those who best represent the highest quality amongst their peers. So in this episode. I'm honored to welcome one such adviser who Forbes recently ranked number one in Virginia and number twenty nine in the nation and this is not the first time he's made the list it's actually the fourth consecutive year. He's done so it takes something very special to build a career and firm that continues used to grow and achieve such honors. And that's why I'm excited to welcome Paul Bag Nado. CEO and founder of PAG motto Carpe to share his story. And it's an interesting story indeed before becoming an advisor at Merrill Lynch. He was a microbiologist with NASA and McDonnell Douglas Paul all in his partner David Karp left Maryland. Two thousand eleven to become one of the first teams to join hightower advisors. A firm which they would leave in two thousand thousand sixteen to form their own feet only. Ria Pack Nado Carp. This employee owned firm was founded on a set of principles based on what they they call true. Fiduciary standards and rooted in transparency. Paul is passionate about the topic of transparency so much so he's authored at a book on the topic called the transparency wave which will release in early twenty twenty. Paul is a frequent media contributor to CNBC. The Wall Street Street Journal Fox Business Bloomberg Reuters. CNN and the street and also the founder of the True Fiduciary Institute a nonprofit with the purpose to positively impact a million students. It's an incredible journey of passion driving growth. So I'm excited to talk with Paul about PAG Nado auto carbs unique value proposition and how it's impacted the firm success. Propelling it to over four billion in assets. Let's get to it. Paul thank you so very much for joining me watch leisure lots of talk about. Let's jump in first of all. I want to congratulate you for making the Forbes list. It's an incredible honor and I want to delve more into that later in the conversation but I I would love it for perspective if you tell us a little bit about your professional background and history you bet be delighted to live. Professional background started as a scientist so I'm degree microbiology. And it worked on a project for NASA and the project was to detect life in outer space while after five five years. Guess what we never found it. I think they're still looking so completely changed careers and started my career in the financial industry. With Merrill Lynch spent nineteen fabulous years. There had amazing. Mentors was one of the best learning experiences of my life and then from there Decided to be more entrepreneur and Was a partner with hightower. Three years after that Set Opera Company. Yeah and we'll get more into each unpack more of those pieces. But how do you go from being a scientist to a financial slide vice on what was the poll to Merrill Lynch at that time. Well my next door neighbor was manager for Merrill Lynch and I was just at a point meantime life were. I was searching to switch careers and do something differently and he was explained to me. Being a visor your coaching coaching counseling helping people with one of the most important aspects of their life their financial wellbeing and also was explained to me that it's like running your own business. You have your own clients you work with you. Have to create your own marketing initiatives and strategies do your own financial planning and it just really really got me excited to be more of an entrepreneur. So that's how all that happened. Clearly you owe that man debt of gratitude. Because you've had an extraordinary career since then tell us a little bit about Pag Nado Corp so how many on staff how many partners. How many advisors? How many support staff? What does it look like? Yeah so there's two partners myself and David Car we've been partners now for over twenty years the support staff we really. We're all teamed numbers everyone's referred to team number and that's very important the from a cultural standpoint but there's a about thirty five team members and mostly mostly individuals are advisers so we have seven relationship managers individuals that are the main point of contact for clients but then we have CPA's Day's attorneys a lot of peas planners Dr Orlando so it's really very advisory basic the family office. And how does the makeup of the firm different today from when you first started the business whether it be the makeup of the team team under hightower or the makeup of when you first launched by Clark says and so when I started the business I was a sole proprietor. And one of my coaches coaches early on. I was Dan Sullivan and he told me this concept of unique ability and that everybody on the planet has a God given talent there's seven billion billion people on the planet and there are things that you can do on never be able to do as well enter things I can do. You'll never be able to do as well. And so what I've done over the last twenty seven years with Maryland hightower and independent is really Continuously year after year strip way things are aligned with my unique ability and bring on people a players top top channel. Pay Them very very well and people that have unique abilities in areas that are going to create unbelievable experiences for our clients. And who are those clients. Would they look like so our clients our it's CEO founders of businesses. Ninety Ninety five percent are privately held companies and we help them with the life. Recycle generally are they're referred to US twelve twenty four months before an event and we we get them ready before they go through liquidity event. Our minimum mm-hmm is ten million dollars in investable assets so they tend to have ten million dollars to three four hundred million dollars thus assets but the CEO founders and Dan CEO founders entrepreneurs. They have a really specific. DNA In our organization is structured in geared to add value due to them extraordinary. How much were you managing just out of curiosity when you left Merrill in two thousand ten great question so we had had about nine hundred billion in assets under management and then about two hundred million in liabilities so between acids alive goes a little over a billion dollars extrordinary so you've grown to X. and no wonder Forbes acknowledged it? We'll we'll get to that in a little bit in terms of how you got there and what you think is most attributable to that but with a billion dollar business at Merrill and a long runway meaning you know a long career ahead of you you were relatively young. What made did you and David Karp become interested in independence especially because nine years ago or a decade ago? Independence wasn't nearly as mainstream as it as today. There was a couple of things. One of the major triggers was the financial crisis that was a life changing experience for me as it was for a lot of people. I'll go. I never wanted to be faced with the situation where could look a client in the I give them complete confidence that their assets are completely safe during the financial crisis we know are very very levered at the time. There's ten thousand banks. Today we have six thousand banks four thousand banks of of closed shop. You had the automobile manufacturer. General Motors went bankrupt. Government had to step in and take them over to the biggest mortgage company in the world to the largest brokers firm in the world and our clients assets. Were no longer safe. In these are individuals that are trusted me for their her financial dependence their children and their children's children and I never wanted to put our clients situation again. I never wanted to be not situation. Everyone put my team in that situation so so we vowed to fix that and the second thing is value creation we've found that the independent space serving CEO founders. We were table to unleash more value for our clients. So I'd love for you to talk a little bit. About what sort of value do you think you were able to unleash the independent space and why wasn't necessarily value that you couldn't unleash as an employee at Merrill Lynch or elsewhere. Yeah so can I did have. What an amazing one thousand nine years? My prior firm and wouldn't be where we are today with without that company and all the fabulous networks but the differences. Were you know when you're an entrepreneur and you're fully independence you have access to the entire world not just the firm that you're employed by also also by being a true fiduciary and pulling away from having an affiliation with a broker dealer from a compliance and regulatory standpoint. They were freed up to do and take on more family office type functions than we were permitted before so our concierge and lifestyle services it just is offering now compared to where walls before being able to not just do tax planning now actually offered tax advice. Detects compliance appliance tax returns for individuals to able to help clients not just perform their state plan. But to have all under one roof. where it seamless us for their Steve playing documents wills and trust to be created? So it's just a whole plethora of new value creation items to private investments is that we didn't have access to before boutiques smaller private investments to the reporting capabilities. It's really spectacular. And what about the sort of midway stop to hightower just for perspective for listening audience. HIGHTOWER has certainly changed its stripes in the last decade when hightower was first launched it was a partnership model and that is what you joined where their whole focus was on recruiting Corner Office wirehouse teams. That were going to be in what we call quasi-independent they were going to be employees but have the look and feel of independence with the ability to really shop. The street as you call it the world and is there and get paid. A percentage of trailing twelve months production in cash and equity and hightower. We just had Bob Ross on the new leader of hightower your and our last episode and he talked a lot about hightower two point. Oh but in the hightower one point. Oh it oration. What was it about that model of quasi-independence quasi-independence that appeal to you? Yep at by the way I'm a huge fan of Bob or else he's one of my best friends and I applaud hightower. They're very very fortunate to have Baden his team all board. So I know he's already doing great things and best calm. So the High Tower One dot O.. With at the Elliott Weiss Blues and drew founders of hightower. Really did something very special and very unique created a roadmap back a path for advisors that were employed by broker dealer or a bank to be able to unleash your unique ability into the entrepreneurs and they did it fabulously so when my partner David Carbonite had the NATO decision do we just take the leap and create our own or a the independent on her own or have a firm like hightower help us. It was a no-brainer because we did not want to learn because there's so many nuances and setting up your own firm arm watching her own. Ra we did not want to learn our clients so hightower was invaluable in helping us get from point. A. TO POINT B. Yeah and I think that's a similar move that a lot of people are similar calculus at a lot of folks went through for a couple of reasons. One the cottage industry born to support the breakaway movement wasn't nearly what it was today. Ten years ago and ten years ago if you had gone fully independent the learning curve and and the amount of time and energy would have taken to pull together the support infrastructure. You would've needed would have been far greater than today. Secondly I think whether people love or hate hightower and I happen to be a big fan but we absolutely must credit hightower for being a maverick and really paving the way for this breakaway movement because it normalized it had validated. It was really the first time. And whether that be driven by the financial crisis or otherwise that affirm really began to choose that even though it had an unknown name and unrecognizable name that if advisers could access everything everything that they could in the wirehouse world but do it in an environment with more freedom and control they would move and hence highest towers tremendous success in in hightower onepointoh agreed credibly. Innovative took a lot of courage a lot of leadership to get that off the ground that they really were. uh-huh were the first man caught Elliott and company for that. Yep So fast forward then to the time you decided to leave hightower and I know you left on incredibly good terms as you say you still have tremendous respect for the firm and its leaders so what went into that decision. And what was the independent landscape escape looking like at the time that you laughed in terms of pulling together the support to build not oh carp as an RA. Now so the landscape in that five of your period that we're with hightower changed dramatically. You know we're on this exponential period as a society and the technological advances that that took place in our AA space from reporting from custody from access to all the things that we do on the Family Office side Louisville's exponential ten times difference. That made it easier for us to set up own. Ria but more important than that. It was really a strong desire desire of my partner and I to own our own firm. I grew up the son of an entrepreneur and it was just always a dream that I had was to to own our own business so it was multiple reasons that we really set a different path to create around firm. And when you left left Merrill to go to hightower just back step a second. Did you know that you wanted something more. Entrepreneurial where you looking to get closer to being an entrepreneur or a business owner at that time or were you also exploring traditional models like maybe Morgan Stanley or UBS or Raymond. James or something like that super questions Russian. So we explored the entire landscape at the end of the day. I'm scientists and you tons of experiments and tons of due diligence so me we met with all the large banks all the large brokers firms as wells at independence space. There was very clear that provide complete transparency to our clients to be able to via true fiduciary and to unleash more value. We had to go on independent states coupled lift the passion of unleashing are unique abilities and being. You Got Entrepreneur. A No brainer frost go on independent states but we did a thorough assessment on both sides. So let me just focus focus on that for a second because I think a lot of advisors in your shoes I will not everyone has as much entrepreneurial genetic DNA as you might but there were plenty of people that sort of our at that threshold feeling the pain and limitations of being an employee to major firm wanting wanting more freedom flexibility. Control some of the things that independence or quasi-independence offers but finding it really hard to emotionally finally and financially give up the safety and security of a large transition deal up front transition economics upfront and the safety and security and scaffolding of being an employee of the big brand name firm. So how did you reconcile that it's passion. It's belief chief and wanting to make an impact. I believe to put purpose over prophets. You need to be that way. So whether it's your your point time in your life or just part of who you are and and it's awesome to be prophets based as well. We live in a capitalist system in society diety here and it rewards those that are actually respect that but the reality is to be a true fiduciary to forego many many revenue news sources that exists on the bank broker dealer side. You take a pay cut so my partner and I. We took a fifty percent pay cut. We made that that transition to the sure true fiduciary so it you know it took time to get back to where we were when we left off so I believe for an individual to do that and to take take cod. I mean we word. Extreme going complete truth reducing coal Turkey but even to take twenty five percent doc. Caught is very very substantial and it has to be purpose based yes purpose based but confident but a certain amount of of risk tolerance a sort of visionary kind of mentality the ability to sort of see. What's possible trusting right? I mean in all of those things have to be true as well and a certain amount entrepreneurials well totally in addition to Wanted to make the difference in the impact. You do have to be good with yourself. You do have to have confidence that it's GonNa work out. You have to have faith. It's not linear her. We're linear creatures as those two exponential creatures. So it's not a linear live point. Eight point beat so. There's a lot of uncertainty on the uncertainty at breeds fear. But you have to have confidence purpose has to be there. And it's journey as humans we love to explore. You're and we love to discover and this is one of the best discoveries I've ever made You know I think what's interesting is what as sort of an industry consultant one of the observations. I've made is that. It's been a re education education for advisors so when I started this business as a recruiter for wealth advisers twenty one years ago the only way in advisor moved in the biggest motivation for doing doing so was because he was going to get a big transition checker signing bonus going from one major firm to another but the re education has come in into the teaching advisors that are helping them to see that an adviser has the ability can really decide what's most important to them. Some are really really excited about building something big picture building equity building a legacy etc and are willing to forgo the short-term upside for something much bigger and many others are much more comfortable with taking de risking the move as much as they possibly can in the short term and the big picture. A long-term is less important. The re education comes in the fact that today there's options that didn't really exist twenty one years ago and actually listed existed much less ten years ago when you were nine years ago when you left Merrill Lynch because independence was much less mainstream then than it is now and I believe this is is becoming more mainstream for society and the economy. Which is the fastest growing? Part of the Economy Stanford is completing a study. He called map of life and the reality is individuals. Today are going to school. They have a career and they go back to school. They have another career career. And there's many many iterations of this and the beautiful thing of the wealth management spaces. You're able to continue to do that within the same ecosystem ecosystem so going from a broker dealer a bank to independent and then there's so many integrations of independence you're able to continually reinvent yourself. Continuously learning continuously grow and. It's just an awesome career path for somebody today for the right person of course so when you think back to the break from hightower and decision to establish peg Netto carp is a standalone Ria. I'd love to hear a little bit about your process for getting getting there from getting from hightower to fully independent. Because it meant unplugging from all of the vendor relationships or the omnibus plug in that you had to hide tower you had to source capital you had to be guided by expertise and council you needed operational support and tech support in the lake. So where did all that come from. Well it starts with transparency transparency. Changes everything so we were are completely open and transparent with our partner hightower what are dreams and aspirations were and it took time but right after Transparently having these dialogues. We amicably a determined path for us to be able to do that. It was important to awesome unclearly. The other partners hightower for us to make them completely whole for for everything and all the work and the guy the created for us so it started with complete transparency and then once we have that transparency and we were all aligned. Then it was. It was made much much easier to work with our other partners. So whether it's The custodian whether it's on the reporting side whether it's a firms that we have Capital with on the asset management side. That it just it all came together rather efficiently and quickly. But it's also a big change going from being employed somewhere like hightower our being a partner to having your own firm so now you're responsible for your own human resources you're responsible for one hundred percent employee owned so your sponsor for figuring out your own equity distribution among Sir your company you're responsible for payroll taxes you're responsible for your own benefits. There's so much your your facility. You're leash your property so there's a lot that goes into having out of your own. Rita that was a transition in that was another learning experience which we just thrive so we love learning all that and discovering all data. Ah figuring all that out but hightower was phenomenal partner. Frost Gift From Point Eight Point did where did the start up. Capital come from free to build. Yeah so it was two sources personal savings for myself and David car and then we also established a line of credit with a bank. And in hindsight do you think that you could have gone fully independent become a standalone fee. Only the ARA having left Merrill or do you feel like the interim stop at hightower taught you or gave you certain skills or education that you needed in order to get here today. So could we have. We could have those individuals that do it and like the luminous capital folks that that did it marks year good good friends with and Safran David hold but they did it mazing we successfully. So could we have. We could have but not desire to do that and and it would have been too challenging to figure all that out right out of the gate had two big elite big of a leap for us especially in those days so just to be clear for listening audience. The luminous capital marks here. And David Ho that Paul. Just reference is a group of Merrill Lynch advisers. There's that themselves were mavericks. They left Merrill Lynch to go full-on. Ria they hired a COO. By the name of Matt Sonnen. WHO's now a consultant to the industry? But he really built the firm for them and they built an extraordinary firm that they later sold to first republic for more than one hundred million dollars. There's and then actually. Recently the team split apart broke away from first republic and went fully independent again. So they've really come full circle but in those was days. It was a specially unusual. There was no validation. No well worn path for billion dollar teams to leave the confines of the wirehouse house world and go independent so in the last decade. Not only have you learned a lot whether it be because of your time at hightower. But it's also the industry landscape landscape has sort of had proof of concept and the support system has really evolved to support it for sure. It's completely different again. It's an exponential difference five years ten years ago versus today. It's just going to get better and better and more efficient because of technology. How did your clients respond Paul when you left Merrill and not just about the move to hide tower but explaining what independence was explaining meaning? Who hightower was which was a firm nobody had ever heard of? How did they respond? And what was the picture you painted for them. Hebrew questions number one. We explain. Explain to them that it was all about them that we were doing this for them. We're doing it to be able to provide more transparency for them to be able to be the true fiduciary into able to add more value. So once we were able to articulate why we were making the transition transition and the clients realize it was really about them and also be able to add more value to them. It became an easy conversation. And we're very fortunate. We had ninety percent sat our clients move with us to To independent to hightower so very very high success rate there. But it's all about the client and you always need to put what clients I if you do transition. And the transition is focused on the client in the additional value GONNA create for the client. The rest of the things take occur solves. Yeah so you use the word fiduciary a lot and I want to just unpack it first second. So many wirehouse advisors is irs. Think of themselves as fiduciaries they would never dream of taking action or making a decision that didn't put their clients best interests first even even though the the brokerage model says they're only held to the suitability standard. So in your mind or in your view how is your version. Asian of being a fiduciary different then the fiduciary mindset of being a wirehouse adviser. It's completely different now. When I was At broker dealer I felt I was being a fiduciary at felt like I was always putting my clients interests first and until it's like until you get up on a bike and ride a you don't really know what it's like. So now being a true fiduciary we know what it's like and it's impossible for somebody who works works at a bank a broker dealer to be true a truth fiduciary. You simply don't have access to everything to always put your client's interest i. It could be something simple as where you place your clients cash. You may be beholden to the firms money market account versus exploring flooring even even worthy assets. Custody it may not be in the client's best interest to be custody at the firm you're employed by because there may be another custodian that is a better fit for your client so we define trooper do Sherry. It's impossible to be a true fiduciary. Now so my my best friends are some of the top advisors in the contrary at banks broker dealers. And I personally trust them implicitly would entrust them with with my capital so they are looking out for their clients and they're always doing everything they can to put their clients best interests first but it's not always possible. Yeah one of the things I think is true. Is that once you see. You can't unsee so. In a lot of cases when wirehouse are House advisers begin to explore independence in they begin to see and realize that there is access to things in another world that aren't possible to be accessed or offered as an employee of a brokerage firm. It's not that these folks are knowingly. unle not acting in a fiduciary capacity. They just don't know any better but for those that get educated once you know. It's impossible to anno- gots. That's beautifully said my business partner and I will let through this learning experience and exploring during a financial crisis exploring what was available global once. We knew that there was a better way. There's no going back and hell about the decision. In your case to to jettison the broker dealer licenses altogether and become fee only which is wet Carp is today so it was quite an experience because that's not the norm. We had some capital with mutual funds and annuities we had a capital with insurance audits and literally. We had to call them and explain to them that we can no longer receive any trails trails and his things that that are just standard in the industry and when we reached out to them they were dumbfounded. They're like what do we do. They didn't even know how to handle that. It was quite an experience because the industry just isn't setup for that. We figured it out. Because following are true Fisher Standards Sanders were prohibited from receiving those things so it was quite a learning experience and it was hard to unwind those things because you're working with me. Institutions major financial companies firms that have their systems and processes structures and set up in a certain way. And we're telling telling them no you can't pay US outweigh. You can't send us that money. I mean they were just stayed ever even heard that before so we figured it out. I'll tell you. What was the driver for you and David to give up brokerage business altogether and become feeling the financial crisis? We spent three years doing duty. Diligence met with all the SEC commissioners close personal. Asian fills. Boise sometimes really overseeing the deal all the all the retirement plans spent time with John Back Seals were standing at the time Todd Thompson. CFO City thank and after three years of deep deep work deep due diligence we crafted ten transparency standards. Ten standards do everything that we could in our power to remove conflicts of interest. And these were some of the conflicts of interest so we he did not want to receive any soft all arrangements. We did not want any revenue share because then we would be conflicted and placing clients capital role there so that was the root of it as we create these ten transparency standards call tree fiduciary standards and we live and breathe by it and it's the DNA ingrained into the culture of our company. And that is one of our with two major breakthrough value propositions one of them is the trooper. Do Shirt standards in the second second. Is Our family office. So would you mind sharing with us a little. What some of those ten principles are and what they actually mean to clients? You Bet the root of what they need is always placed in their interest. I number one and then number two. It's safety of assets so as we dissect the financial crisis one of the things that it was startling oss was the Bernie madoff situation and I know there's been key studies done on that. But if you think about the Bernie madoff situation Bernie madoff miss ties mini right a lot of truth to destroy standards that we've created if you know Bernie madoff situation. Bree made off never got caught by the SEC. Literally ABS counted and people lost over sixty billion dollars and you ask yourself. How is that possible? How did the SEC never catch in held a very very very sophisticated investors you know former CEO of Merrill Lynch capital with them Jeep Comanche Eliot Spitzer New York Nick Attorney General had capital with them to the owners of the New York? Mets like how in the world did this happen. While I'll tell you Alan happen. It happened because because Bernie madoff was allowed and permitted to generate client statements and be the adviser Bernie madoff was permitted to be the custodian and the adviser for the client assets. That people wrote checks to Bernie Madoff Bernie. Madoff was able to calculate late. His own client performance returns in numbers Bernie Madoff was allowed to have revenue share Bernie Madoff was allowed go to accept commissions in a whole host of other things and all those things that he did are still allowed today but this the route as to why he got away with this for twenty years never got caught by the regulators and turned himself in and he got yet to turn himself Alphen because of the financial crisis because the capital that was lost so this standards that we have don't allow for those things to occur so we're not allowed to be extorting except dollars. We feel conflict of interest. Why not allowed to generate client statements? We believe if you're the adviser in January client statement. You're potentially putting yourself in a precarious situation. We're not allowed to calculate client performance numbers. Maybe there's a whole host the ways to calculate performance numbers for clients time weighted dollar weighted. When you're starting point is wonder ending point is and you know as an advisor you you WanNa look good in front of your Klatch so we take that off the table and we remove that so? These are some examples of these ten standards words that we put in place. And why we've put those in place and I'm really passionate that one day. These will become standards for the industry because because people will demand it because they don't want to have someone that could potentially be a Bernie madoff. You're in the process. I know of releasing book called the transparency wave. So I assume that will be a piece of the impetus to move the industry in that direction it will be a part of it. I share but what I've learned is these principles apply to all businesses in all industries. It's not just the industry that you and I work in that. Ads Struggle with this all industries. Do so I've actually created Six steps I call sixteen. Transparency Edifice firm follows Aziz sixteen of transparency they will be exponentially transparent and when you're exponentially transparent you have the ultimate trust. That's the end of the day. What any company any advisor wants to have with our clients? Now I think for most advisers coming to the notion of being only is an evolution and it sounds like it was like that for you as well. You give up being a scientist you go to work for Merrill Lynch. You're working for a brokerage firm at the time and then what became bank owned hightower was a broker dealer. Ria and it sounds like there was a real evolution evolution in your thinking whether it be driven by the financial crisis or watching events. Unfold around Birdie made off on the leg that sort of brought you to this. This impassioned belief about being true fiduciary and feel only you got it and just as I have had a fortunate to make this evolution over almost three decades now twenty seven years people not just our industry but society is doing the same. The this is part of you know started back to the book again but this is part of the bulk. Transparency wave. So what's happening. is you go back hundreds of years ago zero really. The first thing that occurred was the communication period you have the printing press combustion engine airplane and that enabled human beings to provide dialogue and transparency at a new level and that brought us to the digital era all living in today and now the digital era era is getting so advanced with machine learning artificial intelligence. There's nowhere to hide. And so this is kicking us into the transparency wave and it's GONNA be very very prevalent to wealth management space financial industry but all industries so just as I personally than fortunate to experience the transition into the able to evolve in change so all the other industries and the rest of our peers and it is paramount to be ahead of the curve it is paramount how to take advantage of the opportunities and that that technology is serving. Talk to us. You WanNa ride that way. You don't want to be in the middle or the bottom of that way you want to ride that wave because things are changing very very fast pace and you had mentioned. They are so different today than they were five years ago than they were ten years ago and the reality is the speed of that change is accelerating. It's not slowing down. So it's really really important for us to continually reinvent ourselves as advisors as wealth managers as Nanjing our our clients Book Okay Business and embrace the technology and embrace these changes are taking place. That's a good segue from my next question. So clearly you and David and pack motto. Carpe is a firm have been at the forefront of this wave have embraced change have used it to your advantage. So what role do you think that that one your value proposition of being true fiduciary and fully independent has played in that growth. And what's really most responsible for that extraordinary growth breath so number one. It's it's our team and our brand that has led to it so the team are all owners of the business business. Everybody is equity if you came aboard company day. One you're GONNA receive units. Were partnership in the business. You feel like a team number from day. One the transparency standards. Just you feel good every day. You feel so proud like you you just job getting out of bed to make a difference and to go help people because you know you're always doing the right thing in all those conflicts our our import aside and then you put on top of that. Our insatiable learning as a company so we have effect. Today is a learning day for our company every month we we have learning day and Learning Day. The team determines what they want to learn. We've had top neurosciences. Come in top nutritionists. We've had people Dale Carnegie. Come in so today. Someone's teaching White Glove Service. Not that we don't know what it's like the White Glove Service but we put her ego aside right and we want to learn more and we want to grow more so it's having a culture that embraces learning enchaine ingrowing our company. Everyone's expected to experiment every quarter Eight nine different areas in the company. Each area has three three to four experiments so every quarter we have thirty four experiments only on reality is the majority of those experiments are GonNa fail by have thirty forty experiments experiments. All we're looking for is one or two or three to work and the nats new value creation for clients and we do this quarter-on-quarter order out urine. You're out so it's a never ending process of our ability to continually add more value or clients so it's the culture and I'm sensitive sensitive to use that word culture because it's so overused as fortunate to have dinner with Howard Schultz the CEO founder of starbucks. And and that was a big deal out of dinner which had so. I thought I did all the research I do and really planned. You know what questions I was going to ask him. I was thinking you know I wanNa know what keeps Howard Schultz off at night now. Is it like getting coffee. Beans from what is it. And how was my first question to him and when I asked him he didn't skip a beat and we spent an hour talking about culture. That's what keeps them up at night. It's the people a business is the people it's only worth the people that that comprise it and then if you have the right people have the right. Culture have have the right standards that are in place then you get the brand the brand recognition. Many people every month that are contacting us they find us on the Internet through SEO searches. They're contacting us because they wanNA work with usury. They want to work with an Uber Uber. Transparent Organization won a family office. And that's that's our brainard. That's our brand out in the marketplace. So that song still missile passionate about those items you talked about concierge level services and these ten points of transparency but what are some tangible examples bulls of how that culture within the firm translates to a better experience for clients which ultimately translates to more growth breath sure on the concierge lifestyle piece. We were very the norm in the travel. Industry is a revenue share. That's how a lot of travel agents make their money. Their their compensation were forbidden from doing that at Standard so our travel experts. They're planning a trip for someone they're stripping out all the costs so so there is a Delta there when you're not gonNA receive any benefits then it could be that the hotel they stay at. Now's copping them a a free breakfast or three or free dinner. So we're able to reduce the costs and simplify their lives on the lifestyle that's one example and experiments that are private bankers. Who Take Care of all the banking and all the Admin for clients that is it's very cumbersome dealing dealing with all the paperwork that exists industry and so an experiment was to completely go to Docu sign e-signature for for people people work and after a quarter piloting? It were there so our clients now can have everything seamlessly through Electronic signature feature on the tax side with tax compliance. We now utilize new technology completely streamlines the tax efficiency for clients so they spent half Clinton half the amount of time they use bad in working with our CPA and getting ready the tax season so all areas of the business are relentlessly experimenting and pursuing these things. And when you strip out the conflicts when you strip out the ability to think about or potentially receive any kind of revenue share all that drops the bottom line over client. Yeah and I suppose that clients sense that prospects sense that even if you don't give them tangible examples of it people really know when you're all about what's in their best interest versus having to meet the needs or deliver the to the needs of a corporate parent. It's exactly right. People are smart. People's brains are processing Seoul. Oh fast right. There is not a computer today. That's ever been built that can process that human brain here so they're taking a n no foulland's of pieces of information every second. That's how we form Mar Kenyans involves views and sometimes we'll call it our guts our gut reaction the action so individuals are very sharp. They're very intuitive and they know it does. It does make a difference and I agree with the word. Culture is an overrated overused term. But I think that what a client or prospect response to is culture more than anything else they respond to a certain feeling of. This is what it's going to feel like to work for this firm as opposed to this is what it's going to feel like to work with this other firm or to work with this other advisor. Yeah when someone is referred you or someone contacts you and they come in and you're able to communicate to them that the only source of revenue the pharmacies are the advisory Fees Uk. We had no agenda no agenda but to do the right thing. She knew we have nothing to sell. You provide you are advice that really knocks down barriers and walls really align very very quickly with the quiet yeah so on the subject of growth. What is growth? Look like in the future for car. What are some of the growth goals in the short term termine long-term so we very ambitious the whole because we have an MVP and massive transformational purpose of positively impacting? A million lives lives through financial wellbeing. So we are just getting started and we have a tremendous amount of work to do on all fronts so our growth has been accelerating traditionally. We've grown twenty percent a year. That's been in our DNA but now that our brand awareness is becoming. Tell me more prevalent were taken up above the twenty percent growth. So we're super super excited about that. We've also only grown organically. I'm very very proud of that. So we don't have any plans to grow in organically which would be acquiring other other practices. This point Loyd time we still plan on growing organically and putting our our capital human capital and our financial capital deployment back in the business as investments to further push out our value proposition through transparency. And the truth t-shirt standards and through our offering offering with our family office and so what are your succession plans. Look like you're continuity plans for you and David and the next generation as I it look back ten years ago Dave and I were the only relationship managers for our clients today. We have seven so as we continue to grow organically the transition will be from gave it an eye to the other team members. This has already taken place at one point in time I was is relationship manager like David on. It's been three or four years since I've made his relationship. So I have successfully transitioned relationships. I had two other the relationship managers David Five years ago. He had twice the relationships that he was managing living manages today so he has also successfully transition Russian the relationships to other relationship managers so this is the cycle of businesses is the cycle of life. You know seeking the flourishing of all those and helping other so our succession plan is continue doing what we've done really well and bring other like minded intact based individuals and and help them grow help them learn Netra coach them and continued to seek their flourishing which benefits everybody and do you imagine that if you or they. This next generation of relationship managers wanted to either bring in more capital or sell a portion of the business or sell the whole business. Do you imagine that the right buyer would exist. So should we a question so number one our traditional standards would need to the upheld. ELT before we consider that whoever that buyer would be whatever they look like they would need to fulfil and allow the company to continue. Can you to abide by these eastern standard. First and foremost I have majority ownership of the business. And I'll never let go that unless those standards we're GONNA be withheld but if there's someone out there that embraces these standards and has a platform that would enable us to accelerate AH getting to the impacting million lives. We'd be more than open to having a dialogue. It's all it's all about seeking a flourishing of others and making a bigger bigger difference so if that opportunity existed walkabout dialogue in a life is a journey and things change every day every week every a remote every year. So we'll see where it takes us but they'd have to be in line with the ten standards which is really really super difficult. You need to have congruent gruen values. That's your most important threshold to meet and then then beyond that it has to meet all the same service models and everything else so not. It's so easy but just curious asking you to predict the future a couple of last ask questions and again. I could do this all day because I think your story is such an interesting one the evolution of your career the evolution of Your Business the growth of Your Business and the successive excessive at all. But you mentioned that you've given up all client management responsibilities at this point. So what is it typical day. Look like for you. How do you spend spend most of your time? Well I like admitted acknowledge. I suffer from pm a positive mental attitude so I hi Literally the glasses not just hassle for me. It's all the way for the bad so every day I wake up. I'm jumping open out of bed. And it's positively positively the second is I have the transparency plague so mujber transparent all the time about everything sometimes live can make people uncomfortable but for me. It's about making a huge huge impact in getting us to our MT key so a standard the time. It's been two years in writing the book for those listeners. That have written a book. You know what that's like fulltime job in and of itself so it will will be a lot of speaking engagements next year. Is the book walls out. Secondly launched two years ago. True Fiduciary Institutes nonprofit. Five Oh one C.. Three and we now. I've partnered with ten major universities or institutions like ten State University Georgia at four Atlantic University. UVA William and Mary and we are doing a couple of things but we're teaching financial literacy through wealth national programs rams after school so spending a lot of time and energy on that continually recruiting a players. Just top top talent for our organization and and I'm a mentor and a coach to the existing team members to when they hit a ceiling of complexity when they have barriers in front of them. I do everything I can the help them pierce through. That's only complexity pierce through. This was barriers. It's sounds like your life is anything but boring. You are an interesting guy that is for sure all right one last question so you inspired me with the question you said you asked Howard Schultz of starbucks. LemMe ask Paul Pag Nauta. What keeps Paul tag up at night? It's impact how am I going to reach a million lives. How are we going to do that? How are we going to get from point? Eight point be so that a million people have financial wellbeing through standards that we've created as keeps me up at night a noble bold gesture because it sounds like your goals are far more than just continuing to grow Carpet to truly make an impact on the industry three at large in the world as a whole and that is inspiring. This has been incredibly delightful. I'm grateful for your time for your perspective your wisdom and and I think that you've done a whole lot to really advance the industry and make it a better experience for clients and advisors the lake so we thank you my pleasure. Thank you for all this time and enabling me to be on your amazing platform of all your listeners. To be able to hopefully get this message out. Thanks for. Here's I think you'll agree agree. It's not hard to imagine why Forbes recently recognised Pol is one of their top advisors. His unique journey from NASA scientists to Wealth Adviser to entrepreneur led him down extraordinary path of evolution and growth. Not every advisor need make such a major professional leap but more and more. We're a recognized the benefits of independence and its impact on the ability to serve clients free of conflict and with complete transparency as Paul has shared in our next episode that Oxley of the renowned coaching and consulting firm. The Oxley Institute joins me to discuss what we call the billion in dollar mindset. We'll talk about the unique traits of those who achieve the highest level of success. And how you can adapt those very same habits as part of your own business. His practices not is smart and interesting. And I know it'd be a conversation worth tuning into. I hope you'll join us until then I ryan courage you to visit our website. Diamond DASH CONSULTANTS DOT COM and click on the tools and resources link for more valuable content. You'll also find a link to subscribed for regular updates to this series and if you're not a recipient of our weekly email perspectives for advisors click on the blog link to browse house recent articles. Feel free to email or call me. If you have specific questions I can be reached at nine. O Eight eight seven nine. One Zero rose zero two or m diamond at diamond DASH CONSULTANTS DOT COM. Please note that all requests are handled with complete discretion should and confidentiality. Thank you for listening. I also want to thank advisor hub for sharing this podcast with their viewers and subscribers. This is mindy diamond on independence.

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