Latest / Only Fee-Only / #89 - Mastering Equity Compensation and the Human Side of Financial Planning with Chris Arnold

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#89 - Mastering Equity Compensation and the Human Side of Financial Planning with Chris Arnold · Only Fee-Only

• 0:05
  Speaker 1: How's it going everybody?
• 0:06
  Speaker 1: Welcome back.
• 0:07
  Speaker 1: This is the OnlyFeeOnly podcast, but you're here so you probably knew that we're going to have some fun today.
• 0:15
  Speaker 1: In this episode, we got to talk to Chris Arnold, who is based out of St Louis, missouri.
• 0:21
  Speaker 1: He started as a lead financial planner, is now the manager of financial advisory for SecFi, which is a VC-backed fintech company that helps startups and employees better manage equity compensation, and I know a lot of you financial advisors that we work with all across the country can appreciate that.
• 0:41
  Speaker 1: Chris has an awesome story, started at another firm, but is now with SecFi and has been there for two years four months as of the time of this recording.
• 0:51
  Speaker 1: Enjoy this conversation we certainly did with Chris Arnold on the Only Fee Only podcast.
• 0:58
  Speaker 2: What's up everyone.
• 0:59
  Speaker 2: Welcome to another episode of the Only Fee Only podcast.
• 1:02
  Speaker 2: I'm Peter Travello.
• 1:03
  Speaker 2: I'm here with my co-host, brock Buckles.
• 1:05
  Speaker 2: How's it going today, brock?
• 1:06
  Speaker 2: It is going well.
• 1:08
  Speaker 2: Man.
• 1:08
  Speaker 2: How are you Doing well?
• 1:10
  Speaker 2: I'm very excited to have Chris Arnold on from SecFi.
• 1:13
  Speaker 2: I'm really excited to hear about his background and how he's working with startup professionals.
• 1:19
  Speaker 2: So, chris, welcome to the show, man.
• 1:21
  Speaker 3: Thanks guys, Glad to be here this morning you bet.
• 1:25
  Speaker 2: So for those who don't know who you are, you want to give just a quick background and then we'll go into your history and see how you're helping clients.
• 1:33
  Speaker 3: Yeah for sure.
• 1:34
  Speaker 3: So, Chris Arnold, I'm a CFP, as you said.
• 1:37
  Speaker 3: I work at SecFi, but I've been in the industry for about eight years now.
• 1:40
  Speaker 3: I'm based out of St Louis, Missouri, but born and raised in Louisville, Kentucky.
• 1:46
  Speaker 3: So I moved out here after college for a job.
• 1:48
  Speaker 3: And, yeah, a little bit kind of on the personal front, I'm married.
• 1:51
  Speaker 3: So my wife Lainey, she's a wedding photographer.
• 1:53
  Speaker 3: So when I'm not, you know crunching the numbers and doing you know tax analysis and financial plans, I will be shooting weddings alongside of her.
• 2:01
  Speaker 3: So that's a little fun fact.
• 2:02
  Speaker 3: And then, yeah, both of us are really active Love playing tennis, playing sand volleyball this summer, and she jokes that a stranger is just a friend that I have not met yet.
• 2:13
  Speaker 3: So, love people, love just kind of making new friends, helping folks, which kind of lends itself to me being a financial planner.
• 2:22
  Speaker 1: That's awesome, man.
• 2:23
  Speaker 1: Yeah, that sounds a little bit familiar.
• 2:24
  Speaker 1: My wife always says the same thing about me.
• 2:26
  Speaker 1: She's like you'll just talk to anybody.
• 2:29
  Speaker 1: I'm like, yeah, there's more.
• 2:29
  Speaker 1: I mean, look at all the people in the world, there's always somebody to talk to.
• 2:32
  Speaker 1: You can always make a friend, always try to make somebody's day a little bit better.
• 2:35
  Speaker 1: That's cool.
• 2:37
  Speaker 1: So, being in Louisville it's a big bourbon town, obviously Was that a big part of growing up bourbon distilleries everywhere.
• 2:45
  Speaker 3: I mean, you know, once I, once I reached a certain age, it became a bigger part.
• 2:49
  Speaker 3: But yeah, I just made the culture.
• 2:51
  Speaker 1: I don't think you were five years old out there drinking angels envy, but yeah, the culture out there for sure.
• 2:56
  Speaker 3: Absolutely.
• 2:57
  Speaker 3: And you know we just had the Kentucky Derby earlier this month, so it was the 150th anniversary.
• 3:03
  Speaker 3: So that's.
• 3:04
  Speaker 3: The other big kind of claim for Louisville is Churchill Downs.
• 3:07
  Speaker 3: So yeah, I have been to a few horse races in my day as well.
• 3:10
  Speaker 3: Were you there this year?
• 3:11
  Speaker 3: I was not, I did not make the trip back but have been in the past, spent some time in the infield also, you know, in the grandstand.
• 3:19
  Speaker 3: So gotten to dress up and, you know, have a good time.
• 3:24
  Speaker 2: Love it.
• 3:24
  Speaker 2: So you went to the University of Kentucky.
• 3:29
  Speaker 2: But what was like your first like money experience, like that, you got like, hey, you know what?
• 3:35
  Speaker 2: Maybe this finance side of thing is where I want to go professionally.
• 3:42
  Speaker 2: You know, like was there a Chris Arnold lemonade stand or anything like that?
• 3:45
  Speaker 2: Like when did your kind of interest start to go towards finance?
• 3:48
  Speaker 3: Yeah, so my grandfather was big on, you know, his investments and he managed all of his own investments.
• 3:55
  Speaker 3: And so I remember, you know, when I was young, they would go yard sailing and they would come over to our place and have lunch with us and you have all of his statements and he was very manual but he would show that to me and he would show the stocks that he picked and explain like this is why and this is what a dividend is.
• 4:13
  Speaker 3: And he did quite well for himself.
• 4:16
  Speaker 3: It didn't come from money, but just was a diligent investor and really took a knack for learning this on his own.
• 4:24
  Speaker 3: And so from a pretty early age I would say middle school he would.
• 4:27
  Speaker 3: You know, I remember those you know Saturdays sitting down with him.
• 4:30
  Speaker 3: So that was, I think, my first taste with like the world of investing and kind of personal finances.
• 4:34
  Speaker 3: And then, fortunate that you know, my parents were pretty open in terms of you know finances and just kind of like what that meant for you know supporting my brother and I when it came to, you know, playing baseball and traveling like football and like kind of the sacrifices that you know traveling.
• 4:49
  Speaker 3: And you know spending weekends in hotels and you know, also with like our education, and so I think I'm fortunate that it did have just such a like a transparent and kind of a healthy upbringing and then kind of the relational side is.
• 5:01
  Speaker 3: I knew that I was interested in this personal planning and stuff, but I also really love to help people and to build new relationships and I know money can be a really sensitive topic, and so I thought that the blend of one having kind of an interest in developing and honing the technical side but also being able to really kind of meet people where they're at like, empathize, listen and then communicate, that I thought financial planning was kind of the perfect balance of those two skill sets.
• 5:28
  Speaker 1: Yeah, yeah.
• 5:29
  Speaker 1: I mean, at the end of the day, expectations are just what you make them and conversations.
• 5:34
  Speaker 1: If it's normal to have them in your household, then it's not going to feel weird when you talk about money.
• 5:38
  Speaker 1: If it's something that is a touchy subject all the time it's going to be, it's going to feel real weird when somebody talks about it and obviously, like Peter grew up playing hockey, like travel, sports are not cheap and also you learn something about the world too right, Like traveling around, staying in hotels.
• 5:55
  Speaker 1: It's like you're learning about different places, but it's also not like this pie in the sky.
• 6:01
  Speaker 1: This is all free and it just comes to you.
• 6:03
  Speaker 1: So it's really cool that you remember that and that made such an impact on you in those early years.
• 6:08
  Speaker 2: Man yeah absolutely, it's really cool, yeah.
• 6:11
  Speaker 2: So I'm curious.
• 6:12
  Speaker 2: I mean, brock and I, we started as northwestern mutual interns and I see edward jones financial advisor intern here, so I mean, was there a door knocking or are you giving out cupcakes, like you know?
• 6:25
  Speaker 2: I know that that's kind of what their marketing plan is to an extent.
• 6:28
  Speaker 2: Um, oh yeah, yeah, what was the internship like?
• 6:31
  Speaker 3: definitely done in my first year door knocking.
• 6:33
  Speaker 3: Um, you know, in the, the heat of uh heat and humidity of a louisville summer, I was wearing, you know, my, uh, my, my blazer and your shirt and tie.
• 6:42
  Speaker 3: Going around your neighborhoods and you had some dogs chase me down.
• 6:45
  Speaker 3: I had a police officer come up to me and say there's no solicits in this neighborhood.
• 6:50
  Speaker 3: You got to go and then one of my tasks was to actually market a dinner seminar for the Edward Jones advisor that I was working with.
• 6:59
  Speaker 3: So it was a good learning experience.
• 7:03
  Speaker 3: I think one of the reasons I decided not to go that route is, you know, fresh out of school, I really wanted to get more confidence in the understanding that people are going to trust me with their, their livelihoods and their kind of financial assets.
• 7:16
  Speaker 3: Then I wanted to make sure that I really understood, you know, the ins and outs of retirement planning and taxes and insurance coverage, the ins and outs of retirement planning and taxes and insurance coverage, and I just didn't know that as a 22-year-old UK, I had just more of a general kind of corporate finance, not the CFP curriculum, and so that's one reason that led me to, right out of school, joining an RIA here in St Louis, a plan corp that really was like a pioneer in the planning actually started as a planning only firm.
• 7:43
  Speaker 3: They didn't manage any money and was able to get my CFP and sit in on client meetings from day one, which was a phenomenal experience, and then really learned from a great team of senior advisors and experts of how to truly plan from a kind of comprehensive perspective.
• 8:01
  Speaker 1: Yeah.
• 8:02
  Speaker 1: So what were some of the in the beginning?
• 8:04
  Speaker 1: What were some of those kind of aha moments?
• 8:06
  Speaker 1: I mean, we, we talk to people all the time and they're like you know, when I finally started to understand the emotional side of money rather than just having like the IQ and the numbers side, were there any things where you're kind of getting those early days of experience where you're like, oh okay, like this makes more sense now.
• 8:22
  Speaker 1: And if I bring a topic up this way, like going back to those childhood memories, it goes over a lot, a lot better with the client.
• 8:29
  Speaker 1: Yeah.
• 8:31
  Speaker 3: So I had a mentor tell me that no one cares how much you know until they know how much you care, and that really stuck with me.
• 8:39
  Speaker 3: My whole approach is trying to put myself in the seat of a client, articles and running tax projections like what are the things that really matter and like what's the ultimate kind of purpose of money, like what's the end goal that we're trying to use this for and how can money facilitate that.
• 9:01
  Speaker 3: And then we kind of work backwards into, okay, what are the tactical strategies that make sense to kind of get to the end of the road.
• 9:08
  Speaker 3: So I think you know, working at Blank Corp, I was working with a lot more retirees and so I think you know for them it was a different type of conversation and kind of communication style than who I'm working with today, which is more, you know, 30 and 40 year olds in the tech industry, just a lot of life events that they're, you know, transitioning.
• 9:28
  Speaker 3: You know a lot of, you know assets that are kind of dispersed, you know, between they switch jobs more often, they have equity, they, you know, own real estate properties and so anyways, I think, trying to just really understand who the client is, you know, kind of what makes them tick.
• 9:42
  Speaker 3: And then when I understand kind of what, what's their values and what's important to them, then to be able to, you know, make some kind of gradually introduced and always start at a high level.
• 9:52
  Speaker 3: You know, this is the recommendation and then if they want me to expand upon, okay, why is that the recommendation?
• 9:58
  Speaker 3: Or what are the actual tax implications and how is that calculation made?
• 10:02
  Speaker 3: Certainly happy to do that.
• 10:04
  Speaker 3: But I think, rather than starting really deep and really start with the actual recommendation and then, as the client has questions, definitely go deeper with them, but try not to overwhelm it, especially for folks that you know are not spending all day, every day, kind of looking at this stuff.
• 10:22
  Speaker 2: Yeah.
• 10:22
  Speaker 2: So I mean knowing what you know.
• 10:24
  Speaker 2: Now.
• 10:25
  Speaker 2: I mean what are, like, you know, some just basic tips you would give to other advisors that, like when you're just starting out in this industry Because you mentioned confidence in the beginning, you mentioned that you wanted to go to PlanCorp to have experience like, what are some of those main experiences that you feel like you've had that have now let you get to where you're at?
• 10:45
  Speaker 3: Yeah.
• 10:46
  Speaker 3: So I think confidence is certainly a big thing.
• 10:48
  Speaker 3: I think you know I've heard you guys talk to some other advisors are really kind of like choosing a, a niche focus and honing that, and I do think that that's so important because there's so much in the world of planning topics that you could provide value off.
• 11:04
  Speaker 3: Like you want to be able to help people most of us do and you also want to be able, you know, to produce revenue and, like you know, basically make the business like proof to yourself that you can make this work and so you're probably more apt to take on clients that maybe are not like the best fit.
• 11:28
  Speaker 3: So I remember in the early days of kind of getting started here at SecFi, you know I a lot of people have equity compensation is kind of the main pain point, but then their spouse may be self-employed or they may be, you know, graduating, you know dental school and have student loan debts and be thinking about buying into a practice or have, you know, a big real estate portfolio and like all those things are very, you know very much specialties in and of themselves and I think at first, like I, I said yes, like I can help you, but I think you know one thing is a kind of profession I would love to see is you know there's a lot of great advisors that all have kind of their specialty.
• 12:19
  Speaker 3: No-transcript your question, pete but I think that's one thing that I've learned is, as I've gotten more confident, really knowing who I can serve best and really trying to like focus in on not just the basics of the planning but really trying to like help them from a life perspective and kind of incorporate.
• 12:41
  Speaker 3: I know that like these people in the tech world, like they're switching jobs, they probably have some like residual accounts hanging out there and really trying to just take things off their plate.
• 12:50
  Speaker 3: But I don't have that same level of expertise or kind of background doing that with, like real estate investors.
• 12:55
  Speaker 3: But I don't have that same level of expertise or kind of background doing that with real estate investors.
• 12:57
  Speaker 3: But there are some advisors that that is their specialty and I think those types of clients would be better served by some of those other advisors.
• 13:05
  Speaker 1: Yeah, I mean, no doubt the feeling community is a lot better about that than most other parts of the industry.
• 13:13
  Speaker 1: I've definitely seen other parts of the industry where it's like people will take whatever they can get and I never saw I shouldn't say never.
• 13:24
  Speaker 1: I very rarely saw a client handed to anybody else just because it was more about the money there.
• 13:30
  Speaker 1: So I really I think that's a good point.
• 13:31
  Speaker 1: And the other thing is like understanding and having the emotional intelligence to actually sit across from somebody and trying to understand there.
• 13:34
  Speaker 1: So I really I think that's a good point.
• 13:34
  Speaker 1: Uh, and the other thing is like understanding and having the emotional intelligence to actually sit across from somebody and trying to understand what they're telling you as well.
• 13:41
  Speaker 1: Right, because like going back to the iq eq part, while you're doing the planning, while you're looking at the stuff, knowing that you're going to meet with this person, you're looking at all the numbers, right, and then when you sit in front of them, they might just want to talk about how they're feeling overall, about the debt itself or whatever else there is in their financial plan.
• 14:04
  Speaker 1: That is just making them uneasy.
• 14:07
  Speaker 1: So have you had an experience when you've been talking to somebody where it was like I thought we were going to go over all this today at our meeting.
• 14:15
  Speaker 1: Turns out this is going to be more like a not I don't want to say therapy session, but kind of like a therapy session.
• 14:21
  Speaker 1: Yeah.
• 14:22
  Speaker 3: Oh, absolutely, I think you know.
• 14:25
  Speaker 3: You know people, there's a lot that goes on in their life that I I may not be aware of, not, you know, financially, directly, financially related to what most people would think, but it does have financial implications.
• 14:37
  Speaker 3: So, for example, like about two weeks ago, I was getting together with a younger couple, you know, to talk about exercising their options to set up a 529 plan for their child and then to make sure that they were squared away on their estimated tax payments, kind of where the three agenda items.
• 14:52
  Speaker 3: And you know, between the time that I sent out you know the meeting invite, which was, like you know, a week and a half before the actual meeting, her father unexpectedly passed away and he did not have any, you know, estate documents.
• 15:06
  Speaker 3: He didn't have a will, he didn't have a trust and she was going to be one of the.
• 15:12
  Speaker 3: She was responsible for helping her mom.
• 15:13
  Speaker 3: Her mom was the primary, like executor but there were some accounts that she was listed as a beneficiary and so like that was.
• 15:19
  Speaker 3: You know she kind of dropped that on me at the beginning and that you know it was like all right, you know we're going to focus on on this topic, um, and then it also led to, you know, I'd been recommending that they get estate documents in place and I think it really drove home just again like the how the stuff you don't think is going to happen to you but it can, and so, anyways, like it wasn't the agenda that I prepared, but that was OK and I think that being so top of mind and fresh for them really being able to kind of come along, and it wasn't like OK, like let's, you know, let's go to the bank and like let's start, you know, calling the life insurance company.
• 15:52
  Speaker 3: It was more just like, hey, let's take the first kind of like 10, 15 minutes just to, like, you know, recognize like this is this is really tough.
• 16:00
  Speaker 3: Um and like just like you know, tell me, tell me, tell me a little more about your dad, um, and just trying to humanize it as opposed to you know, oh, like you know, when they're grieving, like people are so kind of timid to ask the questions and I think, if you can, just hey, this is a person you had a relationship with and I'd love, like I know, this is someone that's important to you.
• 16:24
  Speaker 3: Like, tell me a little bit about this individual and to me, like I think that just took our relationship from like an advisor client to the next level.
• 16:33
  Speaker 3: And yeah, there's, there's other stories that I can you know whether it was a medical diagnosis or something with their kids, um, that like, yeah, it's.
• 16:42
  Speaker 3: It's not just about you know how much you should be saving for retirement or you know what's going to be the tax optimal strategy, but it's more of okay, like what's going on in your life and you know how can I come alongside of you in this and we still make good financial decisions.
• 16:56
  Speaker 3: But it's also okay to like do something that may be taking away from, like the longterm, like what your net worth could be, if it's the right move for you and your family today.
• 17:07
  Speaker 1: Right, right, no, you're redirecting the conversation right, like it's like all right, all the stuff I was going gonna do off the table now.
• 17:17
  Speaker 1: And the thing is is like, obviously it's not a sales tactic, but it's one of those things to where, like, just doing that strengthens the relationship so much.
• 17:27
  Speaker 1: And how, and like what you said, how they see you, the way they feel about you, and the fact that you're no longer just the person taking care of their money not that they thought that's what, no longer just the person taking care of their money.
• 17:35
  Speaker 1: Not that they thought that's what you were in the beginning.
• 17:37
  Speaker 1: Right, they probably liked you, chris, but it feels good to know that someone is thinking about.
• 17:46
  Speaker 1: I just told you something serious and now they actually care about what's going on for me and they're trying to help me through this, not just worried about talking about my portfolio and my net worth.
• 17:56
  Speaker 1: So I applaud you for that, man.
• 17:58
  Speaker 1: That's really cool.
• 18:00
  Speaker 1: So what are the things that you've been doing to grow your knowledge, or things that you've been more recently interested in, whether that's social media content or trying to learn more about certain types of planning?
• 18:12
  Speaker 1: Where's your focus really been lately, man, or trying to learn more about certain types of planning.
• 18:14
  Speaker 1: Where's?
• 18:48
  Speaker 3: your focus really been lately, man?
• 18:49
  Speaker 3: Yeah, so when I came up from Plane Corp we primarily worked with pre-retirees and retirees Definitely had some younger couples and individuals I was working with mostly that were children of clients and did a little bit of equity compensation planning.
• 19:07
  Speaker 3: At Plane Corp we did a partnership with a financial wellness company that served primarily public tech employees, so it got exposure to restricted stock units and employee stock purchase plans and I just saw the power that equity comp could have on changing one's financial trajectory.
• 19:23
  Speaker 3: I also saw it backfire when they had concentrated positions and they didn't plan for it or they didn't understand the tax implications of winning an RSU vest, and so that really was kind of the telling moment that I wanted to dive deeper in that.
• 19:37
  Speaker 3: So I made the move over to SecFi and I didn't have any experience with startup employees before that.
• 19:42
  Speaker 3: I'm in the Midwest, like St Louis great city, but it's not known for, you know, being a startup Mecca.
• 19:48
  Speaker 3: So it was really kind of on me to learn as much as I could, and a lot of that was reaching out to other advisors that you know did have already kind of honed their skillset, reading a ton, you know, listening to podcasts, and just been amazed by just how open and receptive a lot of advisors are to kind of paying it forward, sharing you know where, how they got started, how they learned, and then I think it's amazing.
• 20:11
  Speaker 3: You know I've been at this a little over two years and you know I've had some people like, oh, like you're, you're the startup equity guru.
• 20:18
  Speaker 3: Like you know, on LinkedIn, like you know, chris is the startup, you know, stock option guy, and I really have, you know, worked hard to be able to learn as much as I can, talking to tax professionals that also know this stuff inside and out, but I would say, a lot of blogs and content that other advisors have put out that have specialized in this, continuing to just stay abreast with other sharp advisors that I think are really trying to shape this industry for the better.
• 20:45
  Speaker 3: And, yeah, knowing the areas that I'm strong in and being able to kind of build out teams for insurance professionals, estate attorneys, like tax professionals that have experience working with the types of clients that I'm attracting and just making sure that they're covered across the board, and I think the best way to do that is trying to learn as much as I can and then also knowing when you know there's areas that it's not my sweet spot, and helping to facilitate, you know, introductions to other professionals that are going to, you know, make sure that they're, you know well, well cared for.
• 21:18
  Speaker 3: Yeah.
• 21:21
  Speaker 2: Yeah.
• 21:21
  Speaker 2: So I mean what's kind of the structure at SecFi?
• 21:25
  Speaker 2: I mean I'm genuinely interested.
• 21:28
  Speaker 2: I mean the firm's been growing quite a bit.
• 21:29
  Speaker 2: You guys have some backing.
• 21:31
  Speaker 2: What's the structure and where is it going?
• 21:46
  Speaker 3: We got our start because our founder had stock options in a company and he really didn't know much about them, didn't think about them until he was ready to transition away, realized that he had 90 days to exercise these options or actually buy shares.
• 21:54
  Speaker 3: So he didn't own equity in the company from day one.
• 21:57
  Speaker 3: He actually had to buy it and because the company had been doing well, there were some tax implications, even though the company was private.
• 22:03
  Speaker 3: So, long story short, he was scrambling, trying to figure out how he was going to come up with the cost to exercise these options and pay the taxes.
• 22:12
  Speaker 3: Couldn't find it and ended up forfeiting a lot of his equity that had over seven figures of value to it, but it was private.
• 22:17
  Speaker 3: So he couldn't actually realize that, and that is how SecFi was born.
• 22:21
  Speaker 3: So we got our start by putting out a bunch of like educational content, doing a really kind of niche form of lending to help startup employees exercise their options and pay their taxes.
• 22:31
  Speaker 3: And then SecFi Wealth, which I joined the company in February of 2022 to launch, was our kind of segue into the financial planning and the wealth management.
• 22:41
  Speaker 3: And because the lending, you know it is a very niche in that if a startup employee has incentive stock options.
• 22:48
  Speaker 3: If they exercise those options, they may be on the hook for what's called alternative minimum tax, and for most folks that's the first time.
• 22:54
  Speaker 3: Like what the heck is that?
• 22:55
  Speaker 3: And my tax situation just got a lot more complicated.
• 22:58
  Speaker 3: And then I've heard that you can get that back in the future, but I'm not really sure how that works, and so, anyways, there's just a lot more questions that people were asking now that they had taken action with their options, and then, if they're fortunate enough to be at a company that does have a liquidity event, it's not just money on paper, it's actually money that they can use for their life.
• 23:16
  Speaker 3: And so it was kind of a natural extension to have a financial planning solution and so joined.
• 23:24
  Speaker 3: We did about a six month beta program where I was really just trying to, you know, understand where the gaps are in the marketplace.
• 23:30
  Speaker 3: Like what would people be willing to pay for this?
• 23:32
  Speaker 3: Like what is it they're hoping to get from an advisor?
• 23:35
  Speaker 3: Like, what are their pain points they have outside of just their equity?
• 23:37
  Speaker 3: We got registered and, you know, vetted a bunch of tech vendors and then we launched at the end of September of 2022, like I said, secfi offers financial planning.
• 23:47
  Speaker 3: So the team today is myself and then my colleague, john, who leads our portfolio management, and then we have another lead advisor, brett, and so the three of us have been just trying to grow this business and serve folks well.
• 24:01
  Speaker 3: So, yeah, we've grown into working with a little over 100 households today, mostly in the startup community, also work with some tech employees at public companies and I would say equity compensation is kind of our specialty.
• 24:15
  Speaker 3: That's what we're known for.
• 24:16
  Speaker 3: But we're really trying to help folks to understand that your equity comp is just one component of your overall financial picture and for us to be able to give you sound advice of your overall financial picture, and for us to be able to give you sound advice, it really we need to understand, like, what else you have going on, what other things are on the horizon, because I think one big benefit of an advisor is to help you know, help you uncover your blind spots and to try to avoid those.
• 24:38
  Speaker 3: And so it's really.
• 24:39
  Speaker 3: You know, most people are like Chris, how many options should I exercise?
• 24:42
  Speaker 3: But for me to be able to tell you that, like I need to know what's your spouse's income and, like you know, do you have any kind of outstanding debt and what other you know upcoming cash needs do you have available?
• 24:52
  Speaker 3: Because once you make an exercise decision like you can't revoke that.
• 24:55
  Speaker 3: So anyways, we're growing.
• 24:58
  Speaker 3: We're looking to bring on another advisor that will be joining us at the end of the month, get some operations support and really try to scale this up into a special advisory offering for folks that are in the tech world.
• 25:10
  Speaker 2: Yeah, love it.
• 25:11
  Speaker 2: And I just because I always see your email signature.
• 25:15
  Speaker 2: So offices in San Francisco, new York and then the one I'm most curious about, amsterdam.
• 25:22
  Speaker 2: So what's the story about that and how are you guys functioning in those three areas?
• 25:30
  Speaker 3: Yeah, so our founder is Dutch, so he is based.
• 25:33
  Speaker 3: Our founder, fred, is based in Amsterdam, as well as the product and engineering org.
• 25:38
  Speaker 3: So the SecFi platform has some self service equity planning tools.
• 25:42
  Speaker 3: So if you joined a startup and you were granted, typically you're going to have a salary and then you might also be granted stock options in the company.
• 25:49
  Speaker 3: So you could create an account on the Sci-Fi platform.
• 25:52
  Speaker 3: It's free to use.
• 25:54
  Speaker 3: And then we have a suite of, you know, equity planning tools, some tax calculators, so you could see, you know, if I were to exercise, what are my tax implications.
• 26:01
  Speaker 3: Or you know, if we go public and you know, at the billion dollar valuation, what does that mean for me personally.
• 26:08
  Speaker 3: And so the product and engineering team has kind of built out that.
• 26:11
  Speaker 3: And then our head of the broker dealer, which is the lending business, he's based in San Francisco.
• 26:17
  Speaker 3: We have a couple of folks out there on the West Coast and then our capital markets and investment team that works with a lot of the bankers and also the institutional investors that provide the lending capital.
• 26:28
  Speaker 3: They're based out of New York.
• 26:29
  Speaker 3: And then we have also some folks that are distributed throughout the US.
• 26:33
  Speaker 1: That's really cool, man, that's really cool.
• 26:35
  Speaker 1: So I'm always curious too.
• 26:37
  Speaker 1: 100 households in a couple of years no small feat, right.
• 26:43
  Speaker 1: But it can be interesting having the dynamic like obviously peter and I, when we started bc brokers, like we had to figure out how we were going to work together right and what what both of us were good at.
• 26:54
  Speaker 1: So what's the dynamic like between um you and the rest of the team and the and kind of the wealth planning part of the sec five?
• 27:03
  Speaker 3: So I would say overall, you know Brett, john and I, we really, you know, get along, we align well.
• 27:09
  Speaker 3: You know Brett comes from a previous firm that he really was working primarily with equity, you know compensated professionals, so he'd already kind of honed.
• 27:18
  Speaker 3: You know that niche and that craft there.
• 27:21
  Speaker 3: I did not, so I was, you know, learning.
• 27:23
  Speaker 3: And then John has spent some time in the investment world.
• 27:26
  Speaker 3: So he comes from dimensional fund advisors but he had not previously worked in RA.
• 27:31
  Speaker 3: He had given advice to a lot of advisors on how does the investment component fit within their client's plan.
• 27:38
  Speaker 3: But I would say we've all come together.
• 27:40
  Speaker 3: We, I think, really align on serving the client well and taking care of clients is priority number one and I think that's something that's unanimous across the board.
• 27:48
  Speaker 3: And then, you know, really trying to think again from a client perspective of not just like what, what is the, the advice that is best to give them, but like the experience that they're hoping, because you know a lot of our clients like they're, they're tech forward there.
• 28:05
  Speaker 3: This is the first time that they've ever worked with a professional.
• 28:07
  Speaker 3: So most of the time, you know, this is the first financial advisor relationship, this is the first time they've ever, you know, connected with an insurance professional, a tax professional and a state attorney, and so there's a lot of like education of kind of what's expected, and usually they're, you know, graduating from a self-service, you know modern solution like a Betterment or a Wealthfront or Robinhood, and so a lot of those you know.
• 28:30
  Speaker 3: You know companies have a very good like user experience and so how can we, you know, also create that user experience and knowing that this is going to be a lot more comprehensive and there's just a lot of information we need to gather, but how can we try to make this as light of a lift as possible?
• 28:46
  Speaker 3: So I think, you know, being a lean team, you know we've all kind of wear multiple hats.
• 28:50
  Speaker 3: You know we're the operations specialists, we're the marketing, you know, team, we're the business development, which has been a really I think it's been a great, you know learning opportunity, and I think now we're really trying to settle in in.
• 29:03
  Speaker 3: You know I've been here a little longer than Brett, so you know I'm trying to really focus on serving clients.
• 29:08
  Speaker 3: Well, he's still working on kind of growing and taking on some new clients, and then we're continuing to try to build a team so that we can have some systems in place so that we can be able to kind of create this to be, you know, even better experience and then also have some associate advisors join that can help Brett and I to support these households.
• 29:26
  Speaker 2: Yeah, I love that it's tech forward.
• 29:29
  Speaker 2: I mean we can definitely relate to that and the insurance side of things, and even I mean every day it's just the continuous fine tuning and things like that.
• 29:38
  Speaker 2: But you guys highlighted you kind of have your own software.
• 29:42
  Speaker 2: Are there any other tools that you're using or really taking advantage of to make your practice more efficient?
• 29:48
  Speaker 3: Yeah, so I think financial planning, we are using RightCapital, we use Altruist as our primary custodian.
• 29:54
  Speaker 3: We also have we're set up with Schwab Use a lot of holistic plan, just because tax planning is a key component.
• 30:01
  Speaker 3: With EquityComp, I will say a software solution that I think has been really beneficial to our practice.
• 30:07
  Speaker 3: That may not be on a lot of advisors radar Um, it's called Zox Um, so it is a uh, an AI like meeting assistant, um, and I know there's a lot of those out there, but it is specifically geared towards financial advisors, um, so it shows up in a meeting, as you know Chris's personal assistant, and it listens, but it doesn't just transcribe the notes, it actually structures the data and the conversation into specific action items for the advisor, for the client.
• 30:35
  Speaker 3: It will have, you know the like, a summary of you know this is what the client said, these are the talking points that they made.
• 30:41
  Speaker 3: It has it broken out by estate planning, insurance planning, what are the recommended actions, and it broken out by estate planning, insurance planning, what are the recommended actions, and it will even, you know, go as far as you know, creating a draft of an email.
• 30:52
  Speaker 3: So it's been a big efficiency gain and, I think kind of the next step in their you know building, you know product journey is going to be, you know plugging that into CRMs so that that could trigger some workflows for advisors.
• 31:04
  Speaker 3: So, anyways, I think that you know there's a lot of talk about you know AI is blown up and you know I think AI could be a great benefit for, you know, the advisory community.
• 31:14
  Speaker 3: But I think ways in that it's creating kind of more back office efficiency, I think is going to be more of the potential as opposed to you know optimizing portfolios or you know optimizing portfolios or you know having all your answers, you know, answered from chat, gpt prompt.
• 31:30
  Speaker 3: So, anyways, that's one that we started using about three months ago and has been a big help for us, especially on some of the meetings that you know, when we're pretty lean, you know we're taking these meetings solo and so I can be fully present with the client but also make sure that key things are not slipping through the cracks.
• 31:46
  Speaker 2: Yeah, yeah, we recently have implemented Fathom into our business and yeah, it's great.
• 31:53
  Speaker 2: I mean, I remember we used to have to go back to the Zoom or like look for it, or you know, I just went by the wayside.
• 32:00
  Speaker 2: And what's that program called?
• 32:02
  Speaker 2: Again, zox, how do you spell it?
• 32:09
  Speaker 3: Z-O-C-K-S.
• 32:09
  Speaker 3: I think the website is Zoxio, but yeah, check it out.
• 32:12
  Speaker 3: They're in the early stages but I've been pretty impressed and they're also very receptive to advisor feedback.
• 32:18
  Speaker 3: So they definitely want to make this product specifically for the advisor community.
• 32:25
  Speaker 1: Yeah, Well, man, you guys are doing a great job.
• 32:27
  Speaker 1: Chris, it's always great to get the chance to chat with you.
• 32:33
  Speaker 1: For people that want to follow along, I think you have fantastic social media content.
• 32:35
  Speaker 1: I like a lot of the stuff that you put out on LinkedIn.
• 32:38
  Speaker 1: So, for people that want to follow along with what you're doing, or SecFi, where can they do that?
• 32:43
  Speaker 3: Yeah.
• 32:43
  Speaker 3: So I will say I personally post most of my content on LinkedIn.
• 32:47
  Speaker 3: Secfi we have a weekly newsletter that goes out.
• 32:51
  Speaker 3: That's really just kind of educating folks on the startup.
• 32:53
  Speaker 3: You know what's going on in the startup community.
• 32:55
  Speaker 3: We also kind of sprinkle in some personal finance topics in there so that anyone can create an account at SecFi and we send that out weekly and then you know SecFi.
• 33:05
  Speaker 3: We also, I would say, linkedin.
• 33:06
  Speaker 3: We do, you know, some monthly webinars is what we're going to be trying to ramp up.
• 33:10
  Speaker 3: So, anyways, I'd say those are the best LinkedIn's, probably the best channel.
• 33:14
  Speaker 3: You might see a little bit on Twitter and my, my coworker, brett he is.
• 33:18
  Speaker 3: He's also on LinkedIn and Twitter, so give him a follow.
• 33:21
  Speaker 3: He puts out a lot of good stuff as well.