#FA Success Ep 344: Scaling To $5B By Going Narrow And Deep Across Multiple Business Segments At Once, With Brad Barrett

Resources Featured In This Episode:

• Brad Barrett
• One Capital Management
• One Network (One Capital Management’s original content)
• Make Your Money Matter (on KVTA 1190 in the Los Angeles area)
• #FA Success Ep 276: Integrating Tax And Legal Services Under One Roof To Truly Scale A 'One-Stop Shop', With John Hagensen
• Culture Index
• ProVisors
• AdvisorsExcel
• Mailchimp

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Full Transcript:

Michael: Welcome, Brad Barrett, to the "Financial Advisor Success" Podcast.

Brad: Thanks, Michael. I appreciate having me on.

Michael: I appreciate you joining us in what I think is going to be a really interesting conversation today around what happens when we kind of get interested or have an opportunity to form some kind of specialization or niche or focus area, but we live within a bigger firm that's growing in lots of ways and doing other things and bringing on other advisors who are interested in other endeavors. And you have legacy clients and acquisitions of other deals. And it's one thing to try to say, "Well, I'm an advisor who owns my firm, and I want to plant my flag here and say this is my thing."

Brad: Right.

Michael: And I know just the dynamics are very different when you're trying to do that in the context of a larger firm. And so you've lived that journey of being in a firm that's now grown very, very large to many billions of dollars and living that "how do you live a specialization within a large firm?" And so I'm just...I'm looking forward to having that conversation today and understanding how that journey has evolved for you over the past decade.

Brad: Yeah. I am too. Obviously, there's a lot to share there. I think any advisor out there listening knows there's stories behind the scenes. And obviously, with our specialties, we've gotten into what we call our business segments. There's a lot to dissect there, for sure. So, I'm excited as well.

Utilizing Specialized "Business Segments" To Drive Organic Growth [05:03]

Michael: Very cool. So, I think to get us started, just share with us the details of the firm as it exists today. Let's just start by understanding the advisory business as it exists now.

Brad: Sure. The name of the firm is One Capital Management. We are a registered investment advisor, RIA. We're headquartered here in Westlake Village, California, which is about 30 miles north of Los Angeles. We currently sit around $5.3 billion in assets. We have offices in Santa Barbara, San Francisco, Newport Beach, our headquarters here in Westlake Village. And then we have a smaller office in Kansas City, as well as Fort Collins, Colorado. And one actual office we'll talk about up in Toronto for our Canadian assets, which is also unique at a firm like ours.

But that's kind of the breakdown from a location standpoint, brick and mortar, if you will, along with our advisory and staff. That totals right around 90 right now, which has been a growth trajectory. The firm was, believe it or not, born actually on September 11th, 2001. Now, for obvious reasons, we had to move the signing date for articles of incorporation back a few days, as you can imagine. But interesting little tidbit there.

So, from a formation standpoint, just over right around 22 years, and still going strong. All the same members who started it are here. It's like Crosby, Stills, Nash & Young, but still making music. And it's been a fun ride.

Michael: And so, $5.3 billion of AUM, total team of 90 people. Offices, it sounds like, mostly around all of the various suburbs of Los Angeles. Because you've got...

Brad: Yeah, all the main areas.

Michael: You've got a big sprawl, right? One suburb to another is like 1 major city to another in a lot of other parts of the country.

Brad: Yeah.

Michael: And then a couple of offices in other discreet locations.

Brad: Yeah.

Michael: So, 90 team members, how many clients is this?

Brad: A little over 2,000. A little over 2,000. And by that…households.

Michael: Sure, sure. Yeah.

Brad: Yeah.

Michael: So, if I just sort of do rough math, right? $5-plus billion, a little over 2,000 client households. Average household, you end out in a $2.5 million per household range. I'm going to guess, though, you've got some barbelling, as it were. Some big numbers at both extremes and not necessarily everybody concentrated in the middle.

Brad: We absolutely do. We absolutely do, for different reasons. One of it happens to be we have some different business segments that has to do with sub-advisory and smaller account platforms. We actually managed 2 ETFs up in Canada on the TSX, which comprises some of those AUM numbers. And, obviously, the barbelling has to do with a couple, 1 or 2, ultra-high-net-worth clientele. But we tend to believe we're right in that core millionaire area of one to two, is our service level. But because of our business segments and our acquisitions and also our organic talent, we're able to kind of focus on different niches and serve different people, as I'm sure we'll talk about. But yeah.

Michael: Okay. So, now, help us understand a little bit more about, I guess as you're terming them, business segments. So, what are business segments in the One Capital world? I guess I'm wondering both what are the business segments, and then just literally what does a business segment actually mean in your world?

Brad: Yeah. I guess it's term we've used. If you go on our website at onecapital.com, you'll see it right there, is the business segments. It's just our breakdown of the clients that we serve. Another way to say it is our niche practices. And there's a couple of them that we focus on. The main one, the main umbrella, to be completely clear here, is private wealth advisory services. And we want to do that in the right way, "simple and elegant" is a saying we have here at One Capital Management, for each different type of clientele.

And so, one of them might be, for example, our first responders. I happen to oversee that business segment, or niche environment, just due to some relationships I have out here in the L.A. area with our Los Angeles City Fire and Police Department. So, focusing on the specifics within that clientele and their needs.

And then another business segment we have is sports and entertainment. So, we actually specialize in the National Hockey League and Major League Baseball. So, those are our 2...2 of the main 4, I guess I would say, major sports. And that's headed up by an advisor, a managing director of ours, a guy named Chris Moynes, who is in our Toronto office.

So, we have some different segments there, along with our family office group, which is really catered to our high-net-worth and ultra-high-net-worth individuals. And then we also have different segments with regards to, I almost want to call them, sub-segments, if you will. Like our retirement plan solutions platform, which focuses essentially largely on business owners and bridging the gap between the owners who own the business or represent the business and their personal assets. So, incorporating qualified assets, ERISA government planning, and those environments. So, and then everything down to even our insurance side of things, which is just focusing on the core needs of the private wealth family, if you will, within those needs.

So, we break it down from niche, I guess to answer your direct question. It would be more of what we call niche practices. And then our role as One Capital, as we grew, was being able to grow or acquire and find the right people to be the person for us at One Capital to run that business segment. Right? The person who has experience, that's their entire...where they want to go with their career, their entire focus, their background is in those different environments. And so, we just believe in the culture, as we built a firm of hiring the right people has a lot to do with the success we're going to have in any one of those segments.

Michael: So, I'm struck by that, because I want to make sure I heard that correctly. So, from your firm's perspective, as a large firm that serves a lot of different clients, a lot of different segments, you're...the appeal for you from a growth or hiring or, I guess, even acquisition perspective is you want firms or advisors who are more specialized and focused because you want to be able to bring them in and have them grow even further in that segment under your broader umbrella with your resources and what you bring to the table. But... Because I know for...the perception I find for some advisors is something in the effect of, "Well, if I specialize, then I'm going to lose my opportunities to sell or exit from this business in the future. Because if I," whatever, "if I specialize in airline pilots, I can only sell to another firm that specializes in airline pilots and there's only a couple of those out there. So, I'm really shrinking my market of opportunity in the future."

So, I'm struck by what I think I'm hearing from you, is, no, no, no, you'd actually prefer to find those types of advisory firms to...I guess those types of advisors to hire or those types of firms to acquire because you like adding specialized segments over time.

Brad: We do. And I don't know that... If I'm being completely candid, I think if you roll the tape back 22 years, I'm not sure that's how it started, from a business pro forma initiative, like all businesses, right? But I think over time as it evolved, one core thing that I know we have kept here at the firm was this notion...and I think as we look back to our successes, and I'll speak to this here, is being entrepreneurial and opportunistic.

And I think through those 2 lenses, we were able to see... We never really said, "No." We said, "Let's take a good look at it." Right? And that's always been our approach, something I share as an advisor coming in 13 years ago to join the core group here when we were just 8, 9 people, and really seeing that. That it was if you had a good idea and there was a sub-sect of individuals we can serve in the right way, we were going to attack it. Because it made sense both from a business standpoint, but also, ultimately, from a client servicing standpoint.

So, I think, where we stand today, I would say that it's really...it's a cool thing for us to say that we actually enjoy someone who has a niche. Because…Me personally, I'll just share this as a partner here, I like the concept. And I think for anyone out there, and I've gone through this, by the way, personally with my own practice, being an advisor within first responders in particular, worrying about, "Am I getting too specific and am I not open to referrals outside of a first responder world?" And the reality is I'm not.

I get referrals and I have clients outside of the first responder world, but I realize that success actually comes in the concept, which I'm sure you've talked to guys about, Michael, with the whole narrow and deep. Right? You go very specific, and you go very deep into that world. And I've seen successes in our business over time with that. Our sports and entertainment managing director and our advisor, that's all he focuses on. And he's created a heck of a practice in doing that. And same with our first responders. We've created a great practice, a great brand around that going narrow and deep.

And I think that anyone out there who's kind of looking at that, we as a firm, we do love that. I think there's a...we're able to support that. I think some firms, some larger firms, they're more looking to be broad-stroked, anyone and everybody kind of thing. Which, I understand has its play from a growth perspective, an AUM perspective. But for us, if we can really get specific, and then help an advisor grow within their field of interest, like you mention, for example, pilots as a great example, right? Well, why wouldn't we go narrow and deep and help support that practice?

And if anyone's out there worried that they're going to limit their opportunities for acquisition or succession plans or things like that, I'd love to be able to share that. I think I'm sure we're not alone in this, but there are definitely firms out there that...and I would seek those that want to partner with you on that. And I would avoid the ones that don't. Because obviously that's not something they want to focus on, right?

How Brad And His Firm Use "Business Segments" In Practice [15:02]

Michael: So, I'm curious to hear more just how the mindset evolved or the perspective evolved in this. Because as you noted, "We didn't necessarily start with 15 years ago, 20 years ago we decided together because we wanted to make the multi-niche segment firm of the future and we've been executing on it since September 13th of 2001, because we couldn't launch on 9/11."

Brad: Right.

Michael: As you said, this...it's what you found or learned over time. So, I guess just I'm curious to hear more of what were the moments or takeaways or the transitions, the things that happened that said, "Oh, wait, there's something here, we want to lean into this approach further"?

Brad: Yeah. In answering that, I think the one thing I know when we step back, early on in One Capital we wanted to go...we knew 1 thing, which was really twofold. Right? 1 thing twofold, right? Pun intended, I guess. Right? Was to build...was, 1, to build a channel with direct clients. That was obviously... We wanted to be an advisor, be a private wealth house. But we also realized, through some relationships early on that I think helped us get to where we are today, that there is successes to be made in other areas.

And our 1st foyer, if you will, into, we'll call it, business segments or niche plays was actually offering our wealth management services with a proprietary investment solution around private client portfolio management to other advisors, to other broker-dealers and platforms. So, we actually offered our services up as a sub-advisory relationship through broker-dealer relationships, both in the U.S. and in Canada.

But in looking back, that's, I think, what bore the idea, if you will, around being able to offer what we do as a core through more unique channels, and then use that. Ultimately, that helped us scale, and the cash flow, really in order for us to circle back to our core, which is building a private wealth, organic, financial advisory business.

And I think when we fast-forward 15, 20 years, to your point, that's where all of a sudden, we started growing. I came in a couple years after the inception and brought in the first responder chassis. And I think that was kind of our first big...outside of the sub-advisory niche, if you will, or sub-advisory platform, was kind of our big focus point. And I think we just had to see that play out. We had to see that become successful. Like anyone who's entrepreneurial and is going to go and invest in something or put your time into a business, you want to see its success before you then go and branch out.

And so, first responder platform came 1st, then we kind of had the...well, we did have the sports entertainment chassis. We had a cross-border advanced planning. I didn't even mention that one earlier, but that came right after the sports entertainment chassis. We have a Canadian advisor who actually sold his practice up in Toronto and moved down to the States, knowing nobody, and built $150-million-dollar practice here in the past 10 years just by the support of a firm like ours and offering services to cross-border, U.S. citizens in Canada, Canada in U.S., and vice versa. Snowbirds, you name it. We're one of the main players in that space. And a guy named Wayne Baxter, in our office, has really been successful in that camp.

So, the timeline, what I mentioned, is the early-on wins, to your question, was really more...in quite complete candidness, it was about cash flow, it was about surviving. We knew we wanted to build a private wealth platform and be financial advisors, we knew that. But in order to scale and add some cash flow, we had the bright idea... And Don McDonald, our founder, Pat Bowen, Steve Cowley, Dan Stridsberg, the 4 main guys, when they were here early on, had this vision of offering, again, our services sub-advisory to provide cash flow to then go back and build the private client business.

Now, obviously, fast-forward 6, 7 years, you got '08, '09 happening, reshapes a lot of things, go back to the drawing board. And 2 years after that, enter me. And that's where the business segments kind of came around as the idea. And then everything else ensued from there.

Michael: So, almost this environment of... So, I guess it sounds like the original core was more pure on the portfolio investment management end, that was actually the first thing that got built and scaled. And so...

Brad: And that, to this day, is still something we hold to be our central everything. We're unique in the sense we don't outsource. We have an entire... When I first came in here, it was Steve Cowley as our chief investment officer. We had Dan Stridsberg running portfolio operations, if you will, which is basically kind of working with Steve, and one portfolio manager. And we all kind of served on the investment committee, we all had our input, but it was mostly them.

That team has now grown to probably 12 or 15 people, all in-house. We don't sub out, we do everything. Individual stocks, bonds, ETFs, we use through that. We have 1 or 2 mutual funds for certain plays within the portfolio. But the portfolio management, for us, has always been the central think tank of how we are going to serve our clients to the best of our abilities. Add to that the client experience, which is something we build the simple and elegant approach to. If we focus on those two things and do them to the best of our abilities, any segment, any clientele we would serve, we feel from our generation there, would allow it to be served how...putting our brand on it, if you will.

Michael: So, the investments becomes the sort of scalable core.

Brad: Yeah.

Michael: And your expression of client experience that's very focused and relevant to the individual client starts to show up in the business segments of, "Well, how do we make a great experience for all these different client types?" The answer is, "Well, we make a segment for each of these client types, and then we get really deep on the advice and client experience for that segment."

Brad: Exactly.

Michael: All of which maps back to a centralized investment core.

Brad: And there are so many examples of this, I'm just thinking off the top of my head. But imagine an advisor out there who has a relationship with a buddy. And I had this. I grew up playing hockey, as well, and I have plenty of friends who actually went pro. And imagine if that person came to me and said, "Hey, Brad, I just signed a contract with an NHL team. I've known you forever, I played hockey with you in juniors. Would you mind managing my money?" Now, as an advisor, I can serve him well. But understanding the nuances within that specific world of an athlete is a very tailored approach. I can provide the same investment management services, we can do that. But knowing the knowledge of the taxes, where he's living, his U.S. versus Canadian citizenship, just all the things that come around that, the way they get paid, which is typically from October to May, versus summertime. Obviously, contract negotiations, relationship management with business managers and agents. There's a lot in that world of 1 example. Right?

Michael: Yeah.

Brad: So, having a guy like Chris Moynes, for example, who's our managing director in that space, which is that's all he lives and breathes. That, to us, made a lot of sense. Like the old Reagan model, right? Delegate and remove yourself kind of thing. And to us, that made sense. And the same thing in, for example, a guy who's a Canadian citizen who's living down here in the U.S. for...he's a CEO or a president of a large company. Wayne is a great person to have that because he understands the cross-border relationships from a tax perspective, all that. But all of it, the bedrock, is...to your point, which you picked that up completely, is the core services of the investment management and what we're trying to provide here is the ultimate client experience. And, yeah, that's how we have always approached it for our clients.

Michael: So, I kind of get...it connects the dots for me then on the evolution. So, you have early stage one of the business, we start doing investment management, we've got some founders with deep expertise, and we start getting clients. We build a bit of a systematized process there. And so, once you've got a systematized investment process, then it's like, "Well, how else do we distribute these investment strategies that we've made?" So, you start sub-advising for other advisors, right? Kind of the TAMP/SMA world. Sounds like you, at some point along the journey, built these into a package ETF offering in Canada. So, there's a version up there.

Brad: Yeah.

Michael: And then business segments for you essentially become these distribution channels for your investment management that are kind of vertically integrated because you own your own channel. We're not just distributing our investment strategies to first responders. We have a segment that's specialized in first responders, and they can implement client investments with the centralized core investment strategies that we've built. And then we can hire the best people at doing first responders to make a great first responder client experience with first responder-specific advice. Because it's hard to differentiate on portfolios amongst first responders, but you can differentiate on advice to first responders.

Brad: Exactly. And to that end, it allows the advisor to be the best self. That's what we feel, right? It allows... If we provide them the tools, the research, the backbone... And for us, not just the investment management, we have our own wealth forecasting team, our own client servicing division. We own our own technologies, we have our own 3 or 4-person technology team. All of that's provided to the advisor to make them the best advisor they want to be in their field.

So, for me, going into a fire station, for example, I'm able to, exactly to your point, provide the service I know that they need specific to their needs. Given the fact that I'm using the same platform that an advisor who services athletes or cross-border clients or business owners or high-net-worth individuals all have the same tools, we're just allowing ourselves to be able to use them in the way that makes sense for that clientele. And that's...it's been a success for us, it really has. Both from a branding standpoint and everything else.

Michael: Similar to a lot of other advisory firms, a lot of firms that run on the AUM model, I find kind of live this world of, "We don't want to differentiate our offering on the investment side. Because then you start living and dying by portfolio performance alone, that gets rough. So, we want to differentiate on our advice where the investment is part of the overall service and the thing that we can scale very efficiently."

Brad: Yeah.

Michael: But a lot of advisory firms sort of say, "We'll lead with financial planning and wealth management, and then also do the portfolio work." You guys, to me, it seems like have just sort of taken that one step further to say, "No, no. We're actually going to differentiate straight down to advice in very specific business segments because we can market them even more." And I can see on your website you're One Capital and it's one family for the family office, and one sports for the sports offering, and one fire and police for the fire and police offering. Everything is one from One Capital and the segment. So, you get this continuity of branding and deeper differentiation. But from the firm end, you're not necessarily pigeonholed into any particular business segment because you've got business segments, plural. And there's just a list on the website, "Here's our fire and police division. Here's our sports division. Here's our family office division."

Brad: Yeah. And a great example actually just happened a couple of weeks ago. There was a client who got referred to 1 of our advisors here just from a friend. They went on our website and actually spent a couple of minutes looking. And this person happened to actually be a police officer in L.A., retiring. And believe it or not, instead of going to the advisor he was referred to, who is a colleague of mine here, his assistant came to me and said, "Hey, they called in asking for him, but they did some research and they felt that you'd probably be better suited for them." And I did the discovery meeting with them and it 100% did because the language and the specifics of that discovery meeting would have been so different than what he would have done on just a general private client example.

So, even someone going to our website, which might be is very generic nowadays, actually just recently served its purpose in the sense of if someone were to go to our website, we ultimately...over time, we want them to feel like whatever their background is or whatever their needs are, it can be served with the right approach. And you're right, the approach we've always taken, to your point you made earlier, has never actually...the core of what we do is to be properly allocated investment portfolios done in what we feel is the right way with a central think tank here, investment committee in-house, so on and so forth. But it all starts with the discovery process as an advisor. And being able to...

We very rarely...and very candidly, we very rarely discuss performance numbers or out there telling clients we're seeking alpha. We understand that that's our role from a growth, a long money manager, we understand that. But the reality is the three prongs when it comes to the John Bowen model, which our founder, Don, is very good friends with, we've approached the advanced planning, the relationship management, and the investment management as kind of the 3 legs to that stool. And I think I've always noticed any advisor that's out there kind of touting performance, those kind of things, the problem is you're only as good as yesterday's results.

Michael: Right, right, right.

Brad: So, it's more relational. And I think that even speaks more volumes into these niches as we talk to them about that. Because every... You talk to a fire captain and a captain of a hockey team, for example, right? Individually speaking, outside of their careers, they're a human being with the same fears we all have. Right?

Michael: Right.

Brad: "Am I going to have enough money? Do I have enough money to support my family? Will I always have enough money?" So, us addressing those common needs and those threads that we can easily pull between the 2, but within their own world, has a lot to do with the success of what I think our client retention has been and ultimately our client relationships have been.

So, it really still, to us, comes down to advisory and discovery, and, yeah, to your point, the advisory side and allowing the advisor to work within the context of their business segment. Keep using that, right? And it allows them to thrive, we've seen it.

Michael: So, your story did kind of answer for me one of the things I was wondering, as well. Which is what happens when someone in the firm gets a client who fits someone else's business segment? And the answer is it goes out to them. You may get more. Because once you get established in your community, sometimes there's just a flow of referrals that can start coming in.

Brad: Yeah.

Michael: But your...the police chief that goes to someone else gets sent over to you because you run the business segment for fire and police. That's how it works within the firm?

Brad: It has. And it wasn't really something that we sent out some big MOU to the entire firm across all the advisors. It's just been we've been lucky, I think, but we've also put a lot of work into who we hire and who we acquire. We've even hired Culture Index and a lot of firms to help us understand who these individuals are, where their specialties lie, even the ones that they may not even know, everything from detail, to orientation, to organization, to just all that stuff.

And so, I think in doing that, we haven't had any issues. And I know that may sound really cliché. But the advisor handing it over to me, he looked at me, he just said, "This makes total sense. I want this to happen for the benefit of the client." I've done it multiple times in the past year through our media program, through our YouTube channel and our podcast. Oddly, we've had a few people reach out that happened to be Canadian citizens living here in the U.S. Immediately, I get that discovery note and it's right over to Wayne, because that's just his specialty.

I can... If we think about it from a selfish standpoint, we don't... Again, thankfully and luckily, we don't have a lot of the egos here that I know can be out there. Which is a beautiful thing, and we're very fortunate for that. So, it's just been a...it's been just a common understanding that, "Look, if we can serve the client in the best way and it makes sense to work with this segment because of some background or some career path that they're in, that's what we're going to do." And it falls under the whole ethos of the firm. Which is, again, the simple and elegant, and ultimately driving the client experience.

How Advisor And Team Compensation Is Structured Within "Business Segments" [31:17]

Michael: So, help me understand how this works from, I guess, just a compensation perspective. I know for a lot of firms, it's one thing to say we try to operate as a team and send the prospect to whichever advisor or team in the firm is the best fit. But then often that gets bogged down and like, "Okay, but who gets the comp? Do we compensate based on revenue, where you lose money if you send it over? Do we have to pay someone a business development trail? But then if we do that, then it gets bogged down for a while." Just I find in practice that gets really messy really quickly in a lot of firms because of the compensation dynamics that start layering on top.

So, can I ask, how does advisor and team compensation work in this business segments realm? And then how does business development show up in that context?

Brad: So, I can break that down into 2 answers. 1, I'm going to give you the 1 that happened over the past year once or twice with regards to my referrals over to 1 of our...my colleague, Wayne, who I think the world of and his environment. Because of that chassis, there are certain economics we had to build within our media division. Which is a whole other topic we can get into, right? But when you focus on that, if the average client fee was, let's say, 1.5%. The way we had to break that down, because we, as a firm, were supporting the cost of building the radio program, the podcast, the YouTube channel, all of it, the house, if you will, would be able to keep more coming back, because we're putting the money out. So, on a 1.5% management fee, we had 1% going back to the firm. Which really only left 50 basis points to whoever's servicing the advisor.

In a case like that, how that gets broken down is, because I'm the director, if you will, in that camp, I'm the one hosting the podcast, the radios, the YouTube, there was an economic structure in there where 25 basis points would come over to me for revenue share or for working with the client. The other 25 basis points... So, again, 1% goes to the house, 25 to the person overseeing the media division, if you will. And then the person...the servicing advisor, or the advisor attached to the client that came in through that channel, was 25 basis points. For example, if it happened to be me as both the advisor, I would have the 25 basis points and the 25 for being the director. But I've always said it also comes down to a sustainability standpoint, right? Again, in this case, going to Wayne, it made more sense. So, his compensation was 25 basis points.

And in that regard, there is a level of servicing for the client that we have to take. Because Wayne's sitting there going, "I love the referral, but it's significantly less than what I would receive if I were to go out and build the business myself." Which makes sense. I think any economic structure you would see in an advisory firm, you should be rewarded heavier, obviously, for if you're the one out there shaking the trees. If it's a firm handing you the business, there's obviously a referral arrangement. And that's been...that was roughly ours on that segment.

The other scenario, which was really more a one-off, I hate to say it this way, but it wasn't some massive windfall of a client that the advisor was going, "I missed out on $10,000 a year of income in perpetuity." So, it wasn't an issue, so to speak. But I think it's something we will always continually talk about at the firm.

And we've always... One thing I love... And I've been here for a long time, half the life of the company. And the same stance we've taken when we were 7 or 8 people is the same stance we've always taken with 90, is we're always going to do the right thing. Which I know, again, sounds super cliché, but I've seen it, behind closed doors, play out more times than not. Pat Bowen, our president, my business partner, he might be one of the most integrity-driven guys I've ever seen. We will do the right thing almost to a fault in a way, whether it's for the client or for the advisors. And so, we always find a common ground if there are any issues. And thus far, we haven't had any. So, I really can't specifically answer the economics on that one. But again, it wasn't some huge windfall where we...

Michael: Right, right.

Brad: Yeah.

Michael: So, if we have a structure where someone's doing a concerted business development effort, we're going to compensate the business development effort and channels. So, that's what's happening for your media offering. Whereas, look, if we just get the one-off client, we can just be a collegial environment. Every now and then, I'll get one for you. Every now and then, you'll get one for me.

Brad: Pretty much that's how it's been.

Michael: And this should mostly average out well enough that we can just play well in the sandbox if you've got a good culture around that in the first place.

Brad: Exactly. And our culture has always been one for kind of "check your ego." And I always said, "Look, check your heart for a second. I'm not saying... Look, you deserve it. But you're not...but you have to understand, is it ego-driven or is it actually money-driven?" And if it's money-driven, I would say we need to kind of build the practice elsewhere instead of relying on this one referral and worrying about it. But yeah, being collegiate about it, I think, is the approach we've taken. Because it hasn't been so much to where it was inundating for us.

Michael: So, I'm struck by just some of the breakdown of the numbers that you had there, and appreciate the sharing. So, as I'm thinking at a high level, if a client fee is 1.5%. Basically, you've got 1% to the firm and 0.5% to the advisor pool. So, basically, advisor comp is about a 3rd of revenue, on average.

Brad: That's just on the media division, which is about 3 to 4 years old.

Michael: Okay.

Brad: Because of the money output ahead of time...

Michael: Right.

Brad: And me and Pat particularly, who kind of started this division together, we got together and I said, "Look, the only way we can really do this is if One Capital is putting out the money to build this channel over time. We have to have some compensation that makes more sense." And we kind of pulled the advisors around and kind of said, "Look, if we get some referrals from our seminars, our"...I hate calling them "seminars," "workshops, dinner workshops, radio, podcast, YouTube, we have to understand these are hopefully going to be great clients coming in, but this was essentially paid for by the firm." So, that economic breakdown is there.

Other than that, our private wealth platform is really about...we've always believed in the partnering with the advisors. So, we find the compensation structure relative to their business environment. Again, back to the segments thing. Because, again, even fees are different in certain areas.

Michael: Right. What you're going to charge in fire and police that has a lot of mass affluent is going to be a different fee schedule than what you do with the private family office environment.

Brad: Exactly. And that has to do with varying factors, whether it's AUM, services offered. Because there's more services, let's say, in the sports and entertainment. We're doing things like they're billing... And just other things that we're not doing.

So, it varies. Right? And so, we also want to come to be a partner with our advisors to help them service, again, their clientele the best way. One of the things in the athlete space in particular is we know we're always going to be competing in the...at least the optics-is-reality world of agents' fees and business management fees. Which, by the way, have nothing to do with us. Right? But that's a very common 1% environment there. And so, it's a hard part for us to go in and charge 1.75 or 1.5, even though that's a very valid management fee for what we are providing for that client relative to our space. But it doesn't really compare to their world because they're like, "Well, that seems really expensive compared to what I'm getting with, say, a business manager or an agent." Again, apples and oranges, but that's the world we have to play in sometimes. So, there's a lot of variances we have to take in that environment.

Michael: So, do you effectively end up with different fee schedules for each business segments because they're different enough in their worlds and the scope of services and just the typical affluence of the clientele that you end out needing slightly different fee schedules for each?

Brad: I think, generally speaking, yes. We try to keep it... We also, again, along with research and platform and everything we offer, a part of it's also practice management work. Pat's our president here, he's actually really great with that with our advisors, kind of helping them work through what the advisor thinks is the right approach. And even down to something like your question here, which is a great one, regarding a tiered approach, flat fee, just overall actual amount. So, we work through with them. We try to get to a common thread so our billing team doesn't get...has like 500 different...

Michael: Right.

Brad: It could be tumultuous. Right? But, again, we will do the work, as always, if it's the right thing for the client. So, I think workshopping it through, and that's the beauty of an advisor here, we have the team to talk to with tons of experience in multiple different, again, business segments working through experiences related to kind of what they think might be the right approach. And it might end up being right, but it's worth talking out and figuring out what makes the most sense.

Michael: So, I'm going to presume then that means if fee schedules start varying by segments and service scope starts varying by segment, that just ultimately the nature of advisor comp or the percentages of revenue or equivalents also just have to get set by business segment because the economics are just different from one segment to the next?

Brad: Yes. We obviously run margins and pro formas on each of the businesses. Because, obviously, as the business owners, we have to be, obviously, creating some sort of margin that's profitable.

Michael: Do you actually do that? Do you literally run...

Brad: Oh, yeah.

Michael: Does your financials have a...I guess, a segmentation...no pun intended, a segmentation by segment to actually say, "Okay, how profitable is this advisor's segment, or this advisory team's segment, and how profitable is this segment?"

Brad: Absolutely. I think anyone listening here, when you build something like what we've built, organization is key. And so, seeing your verticals, if you will, business segments, verticals, niches, whatever you want to call it, right? You have to silo them out and make sure that what we're... And now, granted, you have to roll those all up into the general EBITDA of the firm. And you're going to...and that's how you get to kind of the economics of each one of them. But absolutely, we want to know...

For example, just simple stuff, right? The first responder platform doesn't require a whole lot of travel. Our sports and entertainment does. So, obviously, the OPEX is a lot higher over there. Right? So, that's a very simple example of just some nuances that we have to kind of segregate and make sure we understand where the profitability lies, ultimately into, "Is this a sustainable model for us?" Because, end of the day, if we are going to go and help an advisor and build an advisory group out of a specific niche, we want that advisor to succeed, and they can succeed if they're profitable. Because that's how you stay in business, right? That's just business 101.

I think it's a lot of TLC from us as partners, particularly Pat Bowen, our president, who really takes a hard interest in this, to make sure it's compensatory to all advisors. I have never felt, in the 13 years I've been here, that my practice, whether or not it's profitable...more or less profitable, that I don't have the same contract, if you will, with another advisor. It's really the world that we want to play in is making sure that you are succeeding in your world relative to what you want to be doing for your clients.

So, it's not like someone's getting 80% of the revenue and I'm getting 30%. It's really we break it down and share with them that we want to partner with them and make sure, across the board, it works out for everybody so that there's not some... Because you don't want...the one thing you don't want to say, "Oh, I want to do airline pilots, but this guy over here doing," whatever, "athletes," let's just say, "is making 2 times the money because his contract is better. Well, I'm just going to ditch this and go over there." You don't want to incentivize an advisor to leave a love and a focus. You know what I mean? Because those clients are also really deserving of the services.

I always felt like business can always be what it is. But if we make it moral, which it should be, filled with integrity, you can enable it to provide the services for all the different clients that need it. You can even go down to if you scale it right, which we feel like we've done, we can go down to serving a client who might only have a quarter-million dollars or $100,000 because of their...where they're at. They might be a younger first responder who's growing and contributing and they're dollar-cost averaging. And so, we're able to take that approach and leave it to the advisors to make the decision on whether or not that's a client that they can serve and build up economically.

Michael: So, is there standard targets that you try to aim for as you do financials by segment and financials overall? Do you target a certain profit margin at the firm level or a certain percentage of revenue to advisor comp or a certain percentage of revenue to overhead? How do you... Yeah, how do you guys do this?

Brad: Great question. I think the easiest answer for me to share there is we definitely try to target a 30% margin. That's our goal.

Michael: Okay. Of overall EBITDA, roll it up to the firm at the top level?

Brad: Yeah. Overall. And so, our job is... And that's where a guy like Pat, who really sits on the seat there for our advisors as his role as a partner here, he's incredible at it. And so, that's been a big focus of ours, yeah. We might have some at 22, some at 35, you know the name of the game.

Michael: Sure.

Brad: But the idea, as a roll-up for the firm, we try to target a 30% profit margin.

Michael: And you frame this a lot around the firm's trying to partner with its advisors. So, am I reading into that, that means advisors do tend to have some sort of revenue-based compensation where, as they grow their segment, their comp is growing directly? As opposed to, no, no, they get salaries, but hopefully you get it back on the profits end if you're a partner. How does that...

Brad: It's basically...

Michael: Comp through profits versus comp through salary versus comp through revenue-based compensation.

Brad: We want that old-school model when we partner. Basically, our contracts, for lack of a... We don't get wrapped up in these numbers, necessarily, but think of it like a 50-50 partnership. We'll provide the house, the platform, the compliance, just everything. The client experience, the servicing associates, the portfolio management team, the wealth forecast team, the technology, everything. We want to partner with you with that. So, that any assets you bring in, you know clear as day. If it's a $10-million-dollar-a-year guy or woman doing it, then they know very clearly, whatever they charge, just think of it like 50-50. Now, that's not the exact numbers, but that's the best way I can describe the partnership we're going into here.

And so, yeah, it's a revenue-based model. We want them to be able to feel like they can go and earn, theoretically, the sky's the limit, along with the support. And we will then... I'm a great example. Over time, as my practice has grown, I oversee probably nearly, between all of the business segments that I've...that I worked through over the many years I've been here, somewhere around a quarter-billion dollars or so that I oversee personally here at the firm. And that's...part of it's my own personal private wealth practice. Part of it's the sub-advisory arrangement that I have worked with some relationships in our Kansas area through broker-dealers.

So, it's just there's different revenue models within each of those. And as my practice in particularly grew, as the AUM grew, as the revenue grew, my support also needed to grow. So, adding my own direct associate, which is different than having maybe a junior associate. There's just different... So, we're also adaptive to the growth of the advisor and what the needs are for the practice. But it is revenue based in the sense that we want them to be very clear that if you're bringing a client in and you're going to charge them, on average, 1.5, you should be around... Again, not wrapped up in the specific numbers. But in my example, you know you're getting 75 basis points on that. And so, if you want to go make another $75,000 next year, go bring on another $10 million. And that's, really, a way we partner with them to create their own business.

Michael: And then you started getting towards it in that discussion, as well. But when they get to the point where now they need more resources because they're growing, they need staff support, team support, does that come from the firm's 50%, does that come from their 50%, is that negotiated and kind of advisor-specific for what's going on at the time?

Brad: Yeah, it's a great question. It's very advisor-specific, I would say. Again, going back to your original question, too, it goes back to the pro forma we might be running on that advisor's practice. Seeing where the margin is, seeing where the wiggle room might be. We want to partner with them, we want to help with them, for sure. So, if it's...if that niche, to be able to grow and expand in that, we need the extra service, it's just we come to that together. So, some of it might be part advisor comp, part firm compensation. There's just different ways we can approach that. So, it's definitely more advisor-specific. But it goes back to the pro forma you mention and how we run each vertical's revenue management, if you will.

How Brad And His Firm Structure "Business Segments" [48:11]

Michael: So, take me back a moment for just business segments and some of the...sort of the firm-level structure. Well, I guess my first question, just where did the name "business segments" come from? I'm going to assume someone spent some time to say, "Is it going to be 'business segments' or 'specializations' or 'practice areas' or all the other words that can exist for this?" So, I'm just curious, how did you land on "business segments," do you know?

Brad: It's funny you ask that question. Because the amount of time we've been talking so far, the amount of times we've said that, that might be the most I've ever said those 2 words together, without even knowing that that's what we call it. So, we don't...here, internally, it's not...those are...that's not a vernacular we use commonly daily. Let's put it that way.

Michael: Okay. So, what's the internal vernacular?

Brad: "Practices."

Michael: "Practices," okay.

Brad: My practice, Wayne's practice, Chris' practice.

Michael: Okay. Everybody knows in practice, when you say "Wayne's practice," what you mean is the cross-border Canadian offering. And when you say "Brad's practice," everybody knows that means fire and police.

Brad: Exactly. Exactly.

Michael: So, I guess it's an interesting note in context. The firm has multiple niches, multiple business segments. But as an advisor, you don't. You have your segment, or you're on Brad's team with that segment or Wayne's team with his segment. Advisors are typically in a segment, One Capital has multiple.

Brad: Correct. And I would say, though, take me for example. Being my segment, if you will, or my practice, is largely around first responders, but not entirely. So, even some advisors have entire businesses around one segment, there are other advisors who... Wayne's a great example, too. He has clients that have nothing to do with Canada just the same. But he also happens to have a specialty in that world. So, that's a segment that he is the lead advisor in and is our guy in.

Michael: So, just you may get some clients that don't perfectly fit your segment. Because if we're out there and we build our presence, some stuff comes in. But nominally, I'm not advertising myself in multiple segments. I don't go out there and say, "I'm doing Canadian and fire and police."

Brad: Yeah.

Michael: I go out there and say, "I'm doing fire and police," but sometimes people just like me and want to work with me. So, I get some other folks, as well.

Brad: Yeah. And I think when we talk about branding and marketing, sometimes the branding and marketing happen to be within their own COI world, their center of influence, right? So, that's just their world that they are known for, whether it's in a business management system or a ProVisors group or something like that that the advisor might be in. They might know him as a private wealth advisor who also happens to be very specific in this one area. But outside of that, a referral he might have gotten from another client may have nothing to do with that business segment. And I think it just depends on what that is.

And we've been talking a lot about specific niches and segments and practices. There are...I feel, and I think we feel as a firm, there's ones that have uniquenesses to them that do deserve to be tailored. We've mentioned a couple, first responders, athletes, cross-border clients. I'd even put teachers inside of there, with 403(b) plans. There are specifics to those kind of realms. Then there's another big, bad world of just everybody else. Right? Which they are also very... But someone who works for XYZ company as...it doesn't matter what their role is, versus ABC company. Other than that company being a public company versus a private company, which there are some nuances there with stock options, IOCUs, things like that. There's the nuances of an advisor just understanding the 401(k) world and just overall planning that can be served plenty good. Right? There's nothing specific there that has to have an extra level of branding or marketing or expertise to. Again, as long as you're a credentialed fiduciary experienced advisor, you can work with that clientele.

So, yeah, it's not...we have these segments because it's a focus of ours and we've done, again, the whole concept of narrow and deep. We feel that that's worked well for us. But it doesn't mean that that's our only focus, we do like to be diversified. Right?

Michael: Well, and I guess that's reflected in some of the marketing, that the advisors have the segments, and then start, I guess, building their brand and their COI networks and the rest around their particular domain. Right? Like the sports team, I'm sure, spends a lot of time going to networking events with other people in the sports world that no one would really go to if that's not your world but that's a great place to be when that is your world.

Brad: No. And we all know this as advisors, everyone listening here. We know that the world we tend to play in, the sandbox that we're in based on what we do, it all tends to revolve around some area of interest or some area of expertise. So, we're labeling this as a business segment, right? Or a niche or a practice, or whatever it is. But that's very common, even for everybody.

Michael: Right.

Brad: We just kind of took it the hyper level of saying that these are specific areas we wanted to really approach for various reasons. And it's been a success for us, for sure.

Why Brad Built A Media Division To Reach More Targeted Audiences [53:25]

Michael: So, then you've got marketing that happens by the advisors within their practices. And then you've got what you mentioned earlier, this media division. Or, I guess, as I'm interpreting it, basically, a firm-level marketing effort to generate clients directly from the firm as opposed to just...air quotes, "just" what the practices develop for themselves within their segments?

Brad: Yeah, it was... Yes. And I'll tell you the...try to make this as short as possible. But about 4 years ago, I don't know, something kind of spawned on me and I had a conversation in 1 of our partners meetings. And I went to the guys and I was just like... It's one of those things where it's like I was tired of us being the unknown expert. And I think anyone out there listening right now, you think about that, right? How many people do you see on social media now or YouTube in their 20s talking about, "Do this with your finances and you'll be successful."

Michael: Yes, the rise of the TikTok finfluencer that really doesn't seem to actually know all that much about finance.

Brad: Exactly. And I just started getting... And mind you, you should understand, I'm the youngest partner here at the firm by 15 years. So, in my generation, this is a little bit more I see it more. Just because it's more relevant in my generation, I guess. Especially with things like social media. Right? And it's the same difference like someone who's 25 years old telling you to do these workouts 3 times a week and you'll be fine. I'm like, "Dude, call me when you're 40 and have 2 kids, then we'll talk." You know what I mean? It's the same thing in the financial services world. It's like, "This guy has no experience, no knowledge, no nothing. And yet there's a lot of people"...

Anyways, that was the ethos or the start of me wanting to say, "Hey, look. I know this is different for us." And we've...we don't...from a completely open perspective, we don't have to do this monetarily to succeed as a firm or keep ourselves afloat by any means. This was purely an investment. But I approached them, I said, "Look, I really want to start a podcast. I think that's a really good platform for us." I was listening to your podcast, and I know that's a great medium out there. And we went down that endeavor.

So, we started the Make Your Money Matter podcast around...just audio version, of just sharing weekly planning topics, investment ideas from a firm, from us. Right? And... But interestingly enough, in the same time period we started that podcast for this media division, if you will, at the same time I also created a podcast almost before that that was called Pension Attention. So, this actually speaks to... I wanted to double down on the narrow and deep theory, if you will. Which is I wanted to create a podcast specific to first responders. And for anyone out there who works with first responders, you know that their holy grail is their pension. And it's a beautiful thing, and it should be. So, I literally titled it Pension Attention.

Michael: Yeah.

Brad: And to this day, if you look at our stats, 4 years later, 3, 4 years later, it is the number 1 listened to podcast here at our firm.

Michael: So, the one that's only for fire and police has more listeners than the one for every human being in the country.

Brad: Yeah. So, to me, that's a great example. As of the past couple of years, it just speaks to the volume of if you go narrow and deep and you really focus on it, there's wins to be had. Not only is it the most viewed or opened and listened to when we look at it from our Mailchimp stats, but it's also...I've actually seen direct clients from it. I probably receive 10 to 12 referrals or call-ins from that show, for over the past couple years, each year. So, it's been a very successful podcast for us. Again, that's the niche play.

Now, I don't think this is...I think it makes sense if you think about it. Because when you cast a net that's really wide, it's going to be harder to get traction. I think one of the things about going narrow and deep is you immediately have traction. Right? You're speaking directly to an audience. So, you can create relatability, vulnerability, you can be authentic. Right? You can share your story as to why you're working with that specific arena. You can speak the vernacular. These are all things that create commonalities and relationships with someone who doesn't even know you. Right?

So, I think going narrow and deep and niche on things like media when someone doesn't know who you are, I actually think works. And then from there, we basically... Interestingly enough, Michael, I was going to share with you. Actually, an advisor friend of mine who was on your show, I think last year. Long story short, a couple of years ago, my wife and I, we moved the family to Hawaii. My dad's born and raised there. We wanted to move there for a couple years. We just got back about 10 months ago. I was working full-time from there. This was obviously through COVID, so it worked out.

My neighbor, who I moved into, he had never been to the island before. He did the same thing we did, just moved the family over there for a year. We ended up staying almost a little over 2 years. But it was a guy named John Hagensen. And I don't know if you remember that name or not, but he was on your show last year. And he had created a great, great advisory practice out in Arizona. And we were literally walking around the house one day and we just met in the front yard, got to talking, and said, "Hey, we do the same thing."

This is kind of hilarious, right? We literally meet on an island during COVID. Right? We're the only people out there because everyone else is not even allowed on the island. Right? And we just spent the year together just kind of becoming friends. To this day, he's one of my best friends. I just went to his 40th birthday party with 3 other couples just 2 months ago. Just a great human being in general.

But what's interesting about that story was I started realizing what he was doing. And he probably alluded to this on his show when he was speaking to you. And he did so much in the media world that... This was right at the same time I had brought up this conversation with my partners. So, this was like, to me, divine intervention. That's when I knew, through repetition, this was right and I wanted to go down this path.

So, I made a joke with him. Right? There's more things that went around this. But I was like, "Look, man. I'll teach you to surf if you can teach me everything you will about the media world." And we did that. And he was so gracious with me. He showed me...he hooked me up with AdvisorsExcel, who just does his producing at the time, and the podcast, the radio, the webinars, the seminars, the dinner workshops. This was a whole new world to me. And that's what we've been doing for the past couple years. And obviously, when someone does it, when an advisor talks to a colleague or another advisor who can share that with them, it works for some and it doesn't work for others. And so, what I found is the radio show worked for us to some extent, but the dinner...

Michael: "Radio show" meaning the podcast or AM...actual AM radio-radio?

Brad: Yeah, radio-radio. So, we have a radio show here every Sunday morning at 10:00 a.m. on KVTA 1190 in the Los Angeles area.

Michael: So, radio show at 10:00 a.m. Sundays is working for you?

Brad: Yeah. Yeah. Now, I think when we say "working," it's important to clarify that.

How Brad Measures The Success Of His Media Division [1:00:15]

Michael: Well, that was going to be my next question. How do you...

Brad: Quantify it?

Michael: ...measure and assess results? Yeah. How are you quantifying it?

Brad: I would share it this way. We were spending about $2,000 a month in the marketing for that in terms of being on the channel, we're now doing about $1,000. So, let's call it a $12,000-dollar-a-year endeavor. And I'm excluding my time in writing the show and preparing it weekly. And we've received about $2 million to $3 million of AUM within that channel. So, let's say it's at a 1.5% management fee. From a margin perspective, it's at least paying for the costs of it.

Michael: Yeah.

Brad: And it's creating validity in the brand, which is really what we want to do with it. Right? So, again, how you quantify it is definitely... You look at some other people's numbers, it's way different. But when it comes to things like the workshops we did and dinners, the demograph here in our area, we found out, is very different than the demograph in North Dakota or Arizona or Kansas or someone else. In our area in particular, in California in particular, we have...the demograph is a little bit more affluent, number one, in the L.A. area. That's a key thing to consider. But we also have not a lot of transient individuals. These are people born and raised here, 2nd or 3rd generation.

In Arizona, I was talking with John about this originally, there's a lot of people that have moved from the Midwest or elsewhere, they're 1st generation. So, they don't have a community, maybe, or parents, advisors they're working with.

Michael: Right.

Brad: And then thirdly in the L.A. area, and this is subjective, but I'm going to just throw it out there. Is when you are on a radio, you're a radio host or a podcast host, or I'm an author as well with a book, all the things that John had walked me through that are really great platforms. In L.A., that doesn't really matter to us out here. We see the Kardashians at the grocery store. You know what I mean? They're like, "Who cares, man? You wrote a book and you're on a radio show." That doesn't impress anybody. And I'm not saying it... But I think that plays in other areas.

And so, we didn't have the success that I would have liked to have in the workshops. Something I know you speak about heavily on your show is the iceberg theory. Right?

Michael: Yeah.

Brad: We're talking about some of the things on top of the water here, but I had to sift through and spend a lot of money and a lot of time to realize that those areas might not work. And then ultimately, the discernment to make the decision and be like, "God, this really sucks. I don't want to be a quitter in this, but it's just not working out." We've done 20-something different dinners. We've had some clients come in, great people, we're happy and blessed to serve them, but it's not really becoming of scale for us as a business. The YouTube channel has actually been really unique. It allowed us to take the format of the podcast, bring it into the YouTube world, but we had to spend in that environment. We had to hire a producer. I built out a studio, I'm sitting in it right now. And it's going from audio, as I'm sure you know, into visual, like on your other show, right? It's a different format. Right? It's a very different vehicle.

And so that, to us, is going to be a couple-pronged approach where we want to start building out the idea of monetization in YouTube. So, being a well-known source out there that's not just some influencer talking out their rear end. We want to actually provide experience and sound advice and topics to discuss. The whole theme of the show is largely around finding a planner, finding an advisor, understanding that you don't have to go this alone. That's the whole theme of the show. And we're able to monetize that at some point. And we're hoping to get there.

So, that's, long and short, a high-level view of the media division and its start to where we are today.

Michael: So, it sounds like, ultimately, you've had like 4 different channels. There's the radio show. It's driving some favorable ROI. $2 to $3 million at 1.5% is $30,000 to $40,000 of gross revenue. You're spending $12,000. So, not crushing numbers out of the park or anything, but that's a positive ROI. Spending $12,000 to get $30,000 to $40,000 is not bad math.

Brad: We're not losing money.

Michael: Not losing money. Dinner seminars, did 20 of them, didn't love the...got some results, but didn't love the results relative to the cost and the effort. So, that's dialing back.

Brad: Yeah.

Michael: Podcasts, that's building, but the narrow one is building faster than the broad one. But you're getting genuine flow of call-ins and leads, 10 to 12 every year. Is there a... Do you actually track that in terms of assets or revenue?

Brad: Yeah.

Michael: Is that 10 to 12 that turn into clients, or 10 to 12 that kick the tires and like 2 of them turn into clients?

Brad: What I will say is interesting about another pro in the column of being in a certain niche and being branded in that world is...and this isn't an arrogant thing, it's just like when we get a referral, it's a client that usually signs up. It's almost a foregone conclusion.

Michael: So, it's just so targeted. If you are fire and police, and you've been listening to this podcast and you reach out, you've pretty much probably sold yourself at this point.

Brad: Exactly. And we still go to bat and prove it. It's not like we just take it for granted, but absolutely. It's one of those things where it's much different than a cold call or someone from a dinner coming in. You're starting from almost... You have a little bit of a relationship, but you're starting from ground zero. These persons that call in, not only have they been listening to you so they become familiar with your voice. Which is what the whole medium allows you to do, which is a beautiful thing. But they also...because of my branding in that world, they also know plenty of their colleagues who either work with me or know me. So, there's just an immediate connection there. Which really what that means is there's an immediate...there's an inherent trust. Now, we have to still earn that trust, but it's there. And so, that allows us to take those calls in and move forward.

And I would say my average raise every year in that specific niche is probably somewhere between $10 and $15 million in the first responder world of just that segment every year. And I would say over the past 3 years in particular, Pension Attention, I would say upwards of a third of that has come in directly from that show. So, it's been a 30% increase in my average of 15-plus years working with that group. It's been a 30% increase in those. Not expected, but just numbers that you can rely on year over year for nearly 3 years.

How Brad Creates And Distributes Branded Content [1:06:46]

Michael: So, how did you get the podcast out there? How do you get people to find it and show up in the first place to start building this $10 to $15-million-dollar-a-year flow?

Brad: So, and by no means am I an expert at this. Because, obviously, when you run these kind of things, I'm sure you know, too, there's a lot to consider. Right? I've been working with first responders since 2009, 2010. So, this is right before I even came to One Capital. So, this is a practice that I've been building out for many, many years. And over that time, I just had a lot of relationships, a lot of contact information. So, when I built the podcast, the first thing I did was put all the contacts in there on a mailing list. And that's who I sent it to every week. And every time I went to a station, and I got more contact information or someone...or a new client that came in, I would just add them to that list. And I think that...

Michael: So, you're e-mailing the podcast. They're not necessarily discovering it in Apple Podcasts, per se.

Brad: No.

Michael: They're finding it because you're e-mailing them, "Hey, we're doing a podcast," or you're dripping the new podcast episodes to get them to notice it and pay attention to subscribe in the first place. Presumably, if they're podcast listeners, at some point you hit the subscribe button, you get the new episodes. But the discovery...you're driving the discovery by e-mail into the segment that you've already been trying to serve.

Brad: Yeah. And that's the first-prong approach. But I would say what's the biggest differentiator there is, you got to remember... And this is particular to first responders, I think. First responders, teachers, athletes. Think about where they live and where they work. Locker rooms, stations, close context, guys who are going through cathartic events daily. I always joke with guys, my clientele are guys that are kicking in doors running into danger when we are all running away from danger, right? So, they're going through some stuff. So, when you get an e-mail from a guy, it's also word of mouth. Right? And so, going niche, again, narrow and wide, allows you to spread a little bit further. Because if you're doing the right thing, being a good advisor, providing the right experience, you're going to get shared simply because of good nature.

So, the e-mail is going out to maybe 300 people. Those 300 people are telling their buddies, "Hey, if you listen to this podcast"... And that's how it's growing, I've seen that. I've definitely seen that. Because I've gotten calls in from guys where they are not on my mailing list, I can tell that right now. I know that, because I correlate that. And then I ultimately ask them in the discovery, they say, "Yeah, my captain mentioned your podcast and I started listening to it." It happens all the time. So, I'd say probably half of those calls I get in, 10 to 12 a year, have come from guys that aren't on that mailing list. They are on the mailing list now.

Michael: Oh, yeah.

Brad: So, it's also that niche world where they just talk. Right? Because they're in close quarters together.

Michael: So, you end up with radio show, dinner seminars, podcast, and now YouTube channel is the 4th one that's scaling up. Or I guess you're really in 3. Because it sounds like dinner seminars are scaling back. So, it's radio, podcast, and YouTube?

Brad: Yeah. And I think working through some failures. I'd love to sit here and say that... A lot of advisors have a lot of success with dinner workshops. And it just... Our approach didn't work, I think, from those reasons I mentioned. Demograph is one thing. Maybe it's me, too. It also could be the advisor. Maybe I'm just not built for it. But it also has to do with a platform thing for us. We're more of private wealth, we're not selling products or speaking of products. Not that I'm saying that's a bad thing, that's just not our approach.

Michael: Right, right.

Brad: I think a lot of people that go to those dinners are somewhat expecting that or looking for something like that. I could be generalizing there, but it's just a different medium. And so, we spent a lot of money over a year and a half doing that. And we all, as business partners, said, "Okay, let's pull back and let's try to focus some attention elsewhere." And that YouTube channel is kind of where we're focusing on.

And it's been a ride, it's definitely a challenge. Every week I have to record, I have to write the shows. My whole... As an advisor, Michael, my whole schedule has been completely rearranged. In 19 years in the financial services industry, the past 3 years have been nothing like anything before. Because I have to rearrange how we operate. I have to write...

Michael: In order to support these marketing efforts.

Brad: 100%. So, it's a commitment. And it's hard because you're not getting...there's no...I'm not getting paid for these things. Right now, these are...we're in the building phase. Ultimately, we're trying to get to that point. But it's... Yeah, it's a build.

Michael: So, I take it you're not necessarily seeing a lot of results yet on the YouTube channel ends, that's still on the growthy phase. Podcast is the biggest one. Radio show is distant second, but positive.

Brad: Yeah. And I think we're keeping those because I think it...first off, they're fun for me to do. I really...I find some joy in it. I like kind of sitting in here for 2 hours on a Tuesday, and I already have my writing and thoughts, and getting...

Michael: Yeah. Get to nerd out on the business. Yeah.

Brad: It is. It's kind of therapeutic to nerd out in something I love. I always joke with people, I've never flipped a burger before. I've been in the financial services industry since I was 16 years old, this is all I've ever done. And I'm a complete nerd about it. And I've found that it's, yeah, therapeutic in the radio side. So, doing those is just good validity, in the sense of having people understand that we're also out there in our community locally. And I think that's important.

And what I did find about the YouTube channel, we're seeing that recently, is that, again, speaking of the theme of today around niche play, let's say, or business segments versus overall clientele, or just anyone and everyone, is when you go global, like with YouTube, or you go macro level, you start realizing that any calls in or things like that, it's a lot of kissing frogs. And so, we're adapting even within that own model right now to creating more videos to be in monetization with YouTube so we're actually getting paid, hopefully, at some point from the YouTube channel itself. And then creating different programs, like courses. And we're getting into that environment, like creating courses around how to pay off your debt and investing 101 and what to do with an inheritance, and building those things that we can promote through our social media channels and through our YouTube channels.

So, we're...what I will say in all that is simply that, even a firm of our size, we're still thinking how we thought 22 years ago, which is entrepreneurial and opportunistic. And we're doing it daily here at the firm. And that's what I love to share, because I think it's a cool thing. And I think anyone out there, no matter what size you are, never lose sight of that. It keeps us all young, right?

Michael: And I've got to ask, as well. Just one of the dynamics I find that comes up for a lot of firms that start doing this, or they start building a media presence, or someone in the firm starts driving media presence growth, it's like someone's got to do the podcast or show up on the YouTube channel or to the radio show. So, how does this work from an intellectual property end? Is this Brad's podcast or the firm's podcast?

Brad: Great question.

Michael: Or do you...does that matter and do you care?

Brad: Yes and no. We... I'm very fortunate that all of us partners here, we're very close. And so, we all are very in communication. Every one of us here are working pretty much daily. There's not...we don't have any old cronies sitting on the board kind of thing.

So, when this whole idea came up and we wanted to go to YouTube, or even the podcast really, the teams that we were working with, the media people we kind of got together with, they were very much sharing, "Look. You need to have a face to this." I wanted very much to go under no face, not a picture of me. Just Make Your Money Matter with our logo, branded it. But obviously, to be out there in the community, you have to...people want to see someone attached to it. Right?

So, our first conversation was sharing that... And we all agreed it made sense to promote this. And I shared with them, "If you listen to our podcast, if you listen to our YouTube show, you will hear loud and clear continuously in almost every episode, multiple times, that this is a firm show, I'm just the vessel and the host." And I wanted to take that approach simply because that's the truth. I want to share it as one of the advisors, but we can't have our 30 advisors on a show. So, I'm just the voice carrying the research, the thoughts…

Michael: So, that's part of getting them comfortable of, "Okay, everyone. Brad's going to be the one who's on all the things. But don't worry, we're building a firm thing. We're not just spending money so Brad can do a Brad thing." That's...it sounds like that was part of the...

Brad: It was.

Michael: ...the buy-in you have to do when you've got multiple partners and you're trying to get everyone comfortable with the fact that "we're going to do a media thing and not every partner is going to be the face."

Brad: It was. And you know what? I think, again, back to a little while ago, it really... And I never thought about it this way. But honestly, Michael, the way... We're just fortunate, I think. We don't have the egos that a lot of firms do. And I've always saw that, myself included. We all just want the best. Obviously, we all have our own competitiveness and we want to be that. But I've shared with people, "Look. If anyone wanted to jump in and take this, I would be fine with that." It is not easy. Being on camera every week, being...having your voice out there and writing. I enjoy it from a therapeutic standpoint, I was saying, on the radio show, but it's not easy. It's a whole practice management shift.

So, the aesthetics of it might look appealing. The vanity of it might look appealing. But I can promise you, just like your iceberg theory, and I love that, it's like, "Dude, there is...you're seeing the top part there. Trust me. You want all the work? Go for it, bud. Take it, man."

Michael: So, share with us a little bit more. What's the beneath-the-surface reality of sustaining this kind of content effort? You've mentioned more than once now you...it's really been a material shift to your practice, your weekly life. So, what exactly changed? What does that look like now?

Brad: Well, it starts off Sunday night. Just even my own family dynamic changed. We put the kids down, we'll head to bed. And I'll typically spend Sunday nights, for about an hour, hour and a half, just researching some ideas and things I've saved throughout the week, different articles, preparing the ideas for the show. Monday hits, I typically do my...I do client review meetings or a discovery meeting on Monday, is a very typical Monday. And then Monday night, I'll kind of wrap up what I'm going to start recording on Tuesdays.

So, Tuesdays is really where I come in the studio. I block my calendar out basically from 8:00 to noon. And I will start with the podcast, because it's the shorter form. So, I will create the content, if you will, of what I'm trying to share. And I usually do it out of a rubric standpoint. Because I've been doing this long enough to be able to be free form in how I speak. So, I don't have to have it scripted. And I will basically share the podcast. And I do it somewhere between 15 to 20 minutes, is our podcast. I will create the intro and the outro. So, I'll use the same podcast for both the Make Your Money Matter show and the Pension Attention. I will change the vernacular. If I'm speaking about a deferred compensation plan versus a 401(k), for example. But that becomes the audio. I then save that, package that off, send it to our producer.

Immediately after that, I begin the radio show. Which is, if you've ever looked at the two in the same week, they're the same content, the same general ideas. But the...obviously, the radio show is four 13-minute segments, which is different than one 15 to 20-minute podcast. So, I have to break it down. And with the radio program, as likely you've seen, it's a different approach. Right? There's a radio voice, and then there's the podcast voice. Right?

Michael: Radio voice.

Brad: Yeah. "Hey. This is Brad Barrett with"... There's a different voice. And I had to learn that, right? So, you start there. And then it's also the radio is very CTA-driven, it's very calls to action.

Michael: Right.

Brad: "If you're listening right now, give us a call," those kind of things, because that's a typical radio program. So, I kind of record that. I usually finish right around noon, package that up, send it to the producer. And that's the radio show.

Typically, what I'll do is I'll go to lunch, kind of take a break, I'll do a phone call or 2. That afternoon, I will come back in the studio and I will take the same thing I spoke about and I'll break them down into 3 to 4 five-minute YouTube shows. So, I'll take the same thing I talked about, whether it's talking about ways to avoid market volatility, or things like that. And I'll break that down into, "There's 3 things I want to focus on," and I bring it down to 5 minutes. I will record that. I will send it to my producer, and he will transcribe it.

And Wednesdays, from 12:00 to 3:00, we record every week, Wednesday, on the YouTube show. And that recording is a scripted recording that comes from my audio recording from Tuesday. And the 3 recordings we do on Wednesdays show up on our Saturday, Monday, and Wednesday show releases. And every Wednesday, we do a new batch, and so on and so forth.

Now, you can see, just right there, 3 years ago, before all of this was happening, it was just a normal advisory week. It's about 10 hours a week.

Michael: Yeah, I was going to say, that's adding up to a good 8-plus hours in a week to get all that done. And I'm struck. And that's even...that's with the efficiency that...of the content repurposing. You're taking one idea and just packaging your thoughts different ways. "Here's how I talk about this idea in a 20-minute podcast." "Here's how I talk about this idea in 4 13-minute radio segments." "Here's how I talk about this idea in 4 five-minute YouTube shows." So, the...

Brad: And that took time to learn, but yeah. Now, in doing that, as an advisor, I always come to grips with this saying, "Okay. If I do this, which I do feel is right, broadly, for more clients and to better serve our current clients, is this going to affect my clientele? Is this going to affect my practice?" And that's always been a fear of mine.

And so, back to a comment I made earlier. We, as a firm, came together and said, "We want to make sure we scale this appropriately for your practice." So, that was also the same time period where we brought in Jeremy White, who's our senior client service associate who works directly with me. He has been instrumental. He's basically my own COO in helping me operate, daily, my practice management. Right? I'm still the advisor, I always will be with my clients. But he helps me schedule, he helps me...paperwork, operationally, answers... He's a great advisor in and of himself. He's a 20-year veteran in this business. But he doesn't want to be a direct advisor, right? So, finding the right personnel to help with this was key. And he's a key part to this whole thing for me.

And so, again, scaling yourself internally, making sure that, end of the day, I've always said this, my last client is always my best client. So, any time I meet with a new client or I'm doing a new endeavor, it's really important to me that the client who entrusted me yesterday has the same services I said I would do always. And that is a whole business practice management we all have to take as advisors, right? To keep the same level of service, grow, but grow to make sure everybody's growing, including your clients. So, it's 25% of my...or more of my work week, is heavily involved with this. And it's some work.

Michael: So, as you think of it overall, I guess I'm just curious, is there a marketing ROI target that you guys have in the long run? Like, "For every $10,000 of marketing spend, ultimately, we want to get this much in revenue," or, "We want to get this much in assets to make it a good marketing spend that we would want to sustain." Is there a target or a break-even that you're aiming for?

Brad: Yes and no. I think having...KPIs withstanding, I think we've gone more focused back to our 30% profit margin. I think we just run the numbers that way. And anything we put out, we're trying to ultimately get to a profit margin that makes some sense.

I will say this. One thing in here, when you know you're putting out money ahead of time, because you have to invest in this platform because it's a newly formed vertical, if you will, you understand that there's also a timeline that we have to adhere to. So, we've all kind of agreed to a 3 to 5-year timeline to understand. That's kind of our break-even analysis, if you will. Of we're okay collecting smaller amounts with more going out with operating expenditures being higher than they would be over time, ultimately getting to this attrition as we start building these channels, if you will.

So, I think the way I'd answer that is we still want the 30% profit margin. So, we're still adhering to that. But we're also adhering to that in this world of more of a time constraint. Right? Of how long is it going to take us to get... No different than how we look at a stock, right? A price of E multiple, right? Same difference. So, it's focusing that way just the same.

The Surprises And The Low Points Brad Encountered On His Journey [1:23:34]

Michael: So, you've been at One Capital through just a huge growth cycle. And I think it was less than 10 team members when you got there more than a decade ago. As you said earlier, you're closing in on a 100-team now. So, you've basically lived a 10X growth cycle in the business. So, I'm curious, what surprised you the most about what happens and what changes as an advisory firm scales up that much?

Brad: Good question. What surprises me the most? How I want to answer that, I think, would have to do with our own unique story. What surprises me the most is that... And I don't mean this as I'm shocked, I just mean it's a good surprise. Is that everyone who was here when I came here is still here. And I think if you think about that, if you grow to that extent, if anyone who's been out there with experience with this, you've seen different things, right? You might see people get disgruntled or not work for them and move off, or people taking the money and saying, "Okay, we built it. Now, I want to go," kind of thing. Or whatever it might be. And I think that what I am surprised by in a good way, in a really cool way for us, is we're all still here, just as hungry as we were when I came involved 13 years ago, or just as hungry as we were when we formed the firm in 2001.

And it may be not the answer you might have been looking for on the surprise aspect of it, but I would say I'm grateful for that, I think we all are. And there's no end in sight. We have a...we got a healthy core of partners ready to rock and roll. And it's been a fun ride. It's been a lot of learning curves. There's been verticals that we've tried to build that did not work out. And there are some surprises every year.

Michael: Well, what were some of the ones that ended out on the proverbial cutting room floor?

Brad: Oh, man. One that sticks out, oh my gosh, was we created a vertical called One Performance Group. And it was dedicated to serving car dealerships. And through some relations we had, we were actually, in 2015, for about a couple of years, we were actually the lead sponsored car for the IMSA Porsche GT4 Cayman, just through some relationships we had. And we found a couple individuals there and we decided to hire one individual through that world, focus on car dealerships. And this is a great example of not only was that the wrong play for us because it wasn't in our bailiwick, if you will, but then it's also an example of hiring the right people. We hired the wrong person, for sure.

So, it was an 8-month endeavor. I was very involved with it. I built the platform with the guy. And 8 months later, he just basically left, and it was...it just never worked out. And all in, including time and everything, we probably sunk in $150,000, $200,000 into that, between his draw, let alone my time, just business expenses. It was just...

So, that one dramatically sticks out to me. We all joke about it still. It's fun to have...you've got to have some light about it, right?

Michael: Oh, yeah, yeah. It's the only way you can console yourself through these things.

Brad: Yeah. It burned, it burned us, because it was a bummer. There's more to that story, but, internally, that was kind of a bummer, just for the individual himself. But it's a part of doing business, you've got to put yourself out there. And again, so...

Michael: So, in retrospect, what did you...what had you guys missed that you didn't see the problem coming?

Brad: The red flags on the individual. I actually firmly believe that that segment still will hold true. And by the way, one of our great relationships, a good friend of mine, a client of ours, we work with his dealership. They are... That's a great example of they're business owners, right? They just happen to own car dealerships. So, we took a client who could just be a business owner and took it more granular and said, "I want to focus on business owners who are business owners of car dealerships," right?

And so, our retirement plan solutions platform can work great in that camp. They have a lot of issues inside those places that they don't realize. And they're a consortium, they have a Nissan dealership, with a Lexus dealership, and a BMW, and they kind of all are intertwined. They're not following affiliated servicing group relationships with ERISA government plans. They're all out of whack on compliance. There was definitely a need there. But the biggest thing, I realize, there was we...I think we neglected the signs of the individual that we hired to promote and run that platform.

So, this is a great example of hire the right people. Right? And invest your time in the person. They might be the right now and it might seem great, but really spend the time. And we learned that, and we've done that since then. And it was a good learning lesson for us. But that was the big takeaway, was the person, I think, was the wrong endeavor.

Michael: So, are there particular red flags of, "I wish I'd paid more attention to this"?

Brad: In that specific case, the red flags actually came from individuals we knew who were saying, "We've heard some history from him from other areas." And these are people we know, too. And we just disregarded them. So, in that particular case, it was more of that. So, again, hindsight's always clear and 20/20. Right? At the time, it was all...seemed to us a little bit hearsay and it was...he always debunked it. It was just a...you kind of had to live through it. It was hard to spot it right away. But obviously, as you know, when it comes to fruition, you're like, "Well, that was pretty obvious when you look back at it," kind of thing.

So, yeah, that was a unique one in that regard. But I think if you ask the right questions and you're earnest about what you're trying to do with a certain vertical or niche play, and you're talking to the person doing it, I think organizing your questions and asking kind of their background in it, and I think talking with one or two people who've worked with them matters. Because we should have either, A, listened to the one or two people that we did reach out to to talk about this person before we brought him on. We either asked the wrong people or we didn't listen to the advice given to the people we should have listened to. So, that was our issue there.

Michael: So, what was the low point for you on this journey?

Brad: Oh, man. The low point for me personally on that journey was 8 months of sacrificing my practice individually to give my attention to someone who, the entire 8 months was here, was looking for another job and actually leveraging our platform as his title here to find that other job. And we found that out because when he left, we had, obviously, copies of his e-mails. And for like 6 months of the 8 months, he was basically sending out his résumé, using his title and experience, and grossly overestimating his time with us, just being negligent. And I was just like, "Man, this human being is not who I thought he was," kind of thing. So, that was kind of a kick in the...

Michael: Well, that stings.

Brad: It was a tough one, man. And that bummed me out because I was the one directly involved trying to build it. And to be fair though, and this is a learning lesson for me personally, the red flags that I mentioned were there before we started it. It was also there throughout the 8 months. I was always dragging him around. I'm like, "Why am I doing the dragging here? This is your thing." Right? And I've since taken that, I've definitely used that. I'm no longer... If I have a certain business segment that I know we can attach and I'm bringing someone in, I will not do the chasing. It's just it's either you are or you aren't. You either want it or you don't. I believe in that. Right? And I learned that, I think, through that lesson.

And that was just a bummer. And personally, he was in a tough situation. I was personally helping him out. So, I lent him money and he basically...I've never seen it since. So, yeah, it's just live and learn kind of stuff. My wife and I had a fun conversation about that, she was not too happy about that one. But I'm an empathetic person and I really wanted to help that individual. And I had the idea that if I could help them with their personal situation as an employee... And we're definitely like that as a firm, we do that for the right people. That's just one that he just was not in the right place. I'm not saying he's a bad person, I'm just saying he just was going through a lot of stuff that he was not clear to be able to do what we needed him to do.

The Advice Brad Would Give His Former Self And Younger, Newer Advisors [1:31:33]

Michael: So, what else do you know now you wish you could go back and tell you 10, 15 years ago as you were getting started down the road with the firm?

Brad: You know, I actually think what I would answer here is really the theme of today. I, like many who might be listening to this, always feared going narrow and deep, and becoming too niche. Still to this day, I carry some of that. If I were to talk to myself 15 years ago and know what I know now, I would very clearly say, "All those other extracurricular endeavors you tried to do to 'diversify' yourself that really none of them"... Some of them did, but not a lot of them panned out, especially as well as what my niche practice has been. I would say, "Avoid all of those and just go after it. Seriously." Because I do feel...

Michael: So, whatever you do, don't diversify. I feel like that's why it's so hard for us. Right? When that's the message that comes out of it, it's like, "Yeah, but, Brad, you do realize we're financial planners?"

Brad: Yeah, exactly. As I say that, I'm like... And that's why I'm not...I definitely don't lose sleep over it, by any means. But if you could have a crystal ball... I think, look, let's be fair, right? If we talked about investing world and we talk about diversification, which we know works, but if we knew what was going to happen over the next 15 years, we wouldn't have to be diversified because we would just go after it, right? That's the crystal ball theory. But same thing here, right? But I don't regret, I don't have any regrets on all I did, because I learned a lot. Even that One Performance Group scenario, you learn a lot. I think it's... I always say this, "God doesn't waste a hurt." So, he's going to bring you through stuff to have you learn. It's up to you if you want to learn or not. You can mope and gripe about it, but it's actually a good thing if you choose to look at it right.

And I firmly believe that if I had done that and I hadn't diversified, knowing what I know, if I could do this, which is totally a dream world here, I feel like I could probably have twice as many clients and assets and relationships, I would call it, than I do now. Because my focus would be very, very specific. And I also, at this time, know what I know about our firm. And we're...this is the right place for that. And at that time, it was a new thing. These guys...

Just remember, these 4 guys I met them at a bagel shop in Calabasas, California, as a 22-year-old with $3 million under management saying, "I have this idea, this clientele I would like to serve." And I had to walk them through the specifics of it. And to their credit, they totally took a chance. Because they were, I'm sure, looking at it like, "Yeah, this is probably not going to work out." But I made it my mission to make sure it did. And we still keep that same, again, entrepreneurial and opportunistic environment out for all of our advisors.

And I like sharing that story as an advisor because there are a lot of advisors, "Look, I've lived this. These guys have"... All of us. And I do it now for our advisors as a partner here. And I'm grateful for that because I was that person. I literally was that person. Broke as a joke, living at my dad's house, having this idea, and being a punk 22-year-old. At the time, I had 4, 5, or 6 years in the financial services industry. 3 or 4 years at a broker-dealer and a couple years at a bank in high school. And I knew I wanted to do this, I just needed the right place to be able to do it. And, god, was I right. So, I'm very grateful for that.

Michael: So, what advice would you give younger, newer advisors coming into the industry today?

Brad: Wow. Good question, Michael. So, I just had coffee with a guy 3 weeks ago. He's actually a fellow dad of a kid at my school. 35 years old, a year younger than me. We were having this conversation, he's been in the business for about 3 years. And I literally just said this to him, so that's why I'm bringing this conversation up. He's obviously, in his 3 years... And for anyone out there who has this kind of tenure right now, you've lived through a lot in the pandemic. And he literally started his practice in January of 2020. So, you can imagine his whole... Right?

Michael: Yeah, that was a little stressful.

Brad: The poor guy, his marketing endeavors. And I just I saw in his eyes in 45 minutes of a coffee... Anyone out there who's a good human with integrity, with morals, who has a...who just has a love and passion for the financial world and planning and all of its greatness that you can do, but also just seeing the joy in helping someone who doesn't know this world that well, just you got to hang on, you got to find the right place. Because if you're having... Part of his issue was he's not in the right house. We're actually in conversation with him right now to potentially bring him in. Because a lot of the issues happen to be with where you're at, one way or the other. Not all of the problems, right? It's not always someone else's problems. But it's important to...

Michael: So, find the right place.

Brad: Find the right place.

Michael: Or if you're not in the right place, find the right place. Get out of a bad place and find a good place.

Brad: Yeah. And I would say this, right? For all of us advisors who come in the business wide-eyed, yeah, look. You can absolutely potentially find that one client with $50 million, but the reality is it's 10 years. I always tell people it's 10 years. You will tread water, likely, for 10 years. I know how dramatic that may sound. Because you're going to be investing in your business. If you have some AUM in the first year, you'll be reinvesting that to go and market or other things. To me, I use the 10-year rule with my younger guys. I say, "Look. If you can weather it and sustain yourself and tread water for 10 years, this business will reward you after that point." Again, that's a subjective time period, but that's what I've shared from experience.

What Success Means To Brad [1:36:58]

Michael: So, as we wrap up, this is a podcast about success. And just one of the themes I've always observed, just the word "success" means very, very different things to different people. And so you've had this wonderful growth path with the firm as a partner in building the practice. And so, the business has had a wonderful journey. How do you define success for yourself at this point?

Brad: I have answered that in what this business has done and all the work I've done for it. You can look at the success of a practice, of being a partner in a $5.3-billion-dollar firm and overseeing a couple hundred million dollars personally. People would define it that way. I actually define it from an independent standpoint. I have the time to create, which I love. I have the time to spend with my family, go pick up my son at 3:00 from school. I'm taking him to stick time and go play hockey today at 2:00. That, to me, is how I define success.

And I didn't know that going into it years ago, but I'm very grateful that that's how I define success. Is, as I always say on our show and to my clients, money buys time. That's it. It's a tool for buying freedom and time. And that's how I personally define success for myself, is being able to afford the time to create, do things, invest in things, like, again, recreating the practice or different verticals, and being able to do things extracurricular that keeps me motivated. I like spending time with family and I like to surf, so I go out and do that. And that's a big part of my life.

Michael: Very cool.

Brad: Yeah.

Michael: Very cool. Well, thank you so much, Brad, for joining us on the Financial Advisor Success Podcast.

Brad: Thanks for having me, I appreciate it.

Michael: Thank you.