Welcome back to the 204th episode of Financial Advisor Success Podcast!
My guest on today's podcast is Blair duQuesnay. Blair is a financial advisor with Ritholtz Wealth Management, an independent RIA based in the New York City area that oversees nearly 1.3 billion of assets under management for more than 1000 affluent clients.
What's unique about Blair though, is the way that she's been able to build her client base of the firm up to $90 million of client assets in barely two-and-a-half years in a role that, by design and her choice, doesn't require her to actively prospect for business and instead lets her focus on the client relationships and the investment committee work she enjoys most, and why she gave up being a partner at her prior firm for this current employee role.
In this episode, we talk in-depth about the journey that Blair has taken through different types of firms in the industry, from starting out at a major wirehouse in various operational and investment support roles to the transition she first made to the independent channel not as a proactive decision to break away from the wirehouse world, but simply out of a need for a job after the financial crisis. Why her decision to launch her own independent RIA was driven more by a family change and limited alternatives than a desire to hang her own shingle. The opportunity that led her to merge her firm into a larger local one. And why finding an advisory firm that had a strong organic growth rate of its own was ultimately such a driving factor in her decision to join Ritholtz Wealth Management.
We also talk about the steps that Blair took to reinvest in herself to advance her career. The reason she decided to pursue the CFA Charterholder as her first professional designation, the path she took to obtain her CFP marks thereafter, why Blair has no regrets for having spent several years working as a sales assistant before becoming a financial advisor, and the moment when Blair was attending a financial advisor conference that she realized she was going to have to make a change.
And be certain to listen to the end where Blair shares the real-world challenges and frustrations that came with starting her career in financial services as a young person straight out of college and as a female in a male-dominated industry. The steps she took to make sure she stayed in the industry, whatever it took until she found the right role. And why, in retrospect, she believes it's so important to be patient and taking early entry-level roles that form the foundation of a long-term career as a financial advisor.
So whether you’re interested in learning about how Blair's career path changed from aspiring professional ballet dancer to financial advisor, how she discovered real financial planning, or how making a mindset shift to optimism changed everything for her, then we hope you enjoy this episode of the Financial Advisor Success podcast.
What You’ll Learn In This Podcast Episode
- Blair’s Educational Background And How She Got Started In The Finance Industry [04:45]
- How Blair’s First Job After Graduation And How Her Role Changed After Moving To New York [16:37]
- Why Blair Decided To Pursue Her CFA Designation And Her Move To Join Wealthstream Advisors [24:32]
- Blair's Pursuit Of The CFP Certification And How She Gained Client-Facing Experience [39:10]
- Blair's Move To New Orleans And Starting Her Own Solo Firm [48:04]
- Blair's Role at ThirtyNorth And Why She Eventually Decided To Leave [55:30]
- What Made Ritholtz Unique [01:08:21]
- What Surprised Blair The Most And The Low Point On Her Journey [01:19:58]
- The Advice That Blair Would Have Given Her Younger Self, The Advice That She Has For New Advisors, And How She Defines Success For Herself [01:31:32]
Resources Featured In This Episode:
- Blair duQuesnay
- Ritholtz Wealth Management
- The Compound
- The Belle Curve
- Wealthstream Advisors
- Keir CFP Review Classes
- Blair as the Truth Seeker
- ThirtyNorth Investments
- Eckhart Tolle
- #FASuccess Ep 020: Building A Successful Business By Giving Away 99% Of What You Do For Free with Michael Kitces
- #FASuccess Ep 017: Using Social Media and Blogging to Drive Business Growth As A Reformed Broker with Josh Brown
Michael: Welcome, Blair duQuesnay, to the "Financial Advisor Success" podcast.
Blair: Hi Michael, thank you so much for having me to be here. It's an honor.
Michael: I'm really looking forward to today's discussion on the podcast and just talking about the journey you've had through the financial advisor role. I know a lot of the folks that we have on the podcast over the years have done these journeys to independence sometimes, or often journeys to launching a firm and hanging their own shingle. And you – I'll admit, I guess I have a slight bias that way – just because I'm entrepreneurially-minded, I like to hang my shingle and do my own thing. But I know a lot of people don't, or that's not necessarily their ideal journey or their ideal outcome. If you just literally look at the math of the industry, a huge and growing number of advisors are in a wide range of employee models, independent models, large firms, small firms, roll-ups, so many different ways that the industry can be configured.
And I know you've had an interesting journey because you've lived a lot of that. Like large firm environments, small firm environment, hung your own shingle for a period of time, have been an employee in a firm, have been through merging. Lots of different ways that this can get configured. And so I'm really excited to talk about your journey going through that and deciding, I guess, what I'm sure were a lot of twists and turns for your own path of why being an employee model when you've been an employee? And why be independent when you want to be independent? And why merge when you wanted to merge? And just how has all of this evolved and played out for you to find the path and decide how you want to build your career now that it seems like you've landed some place that you are pretty happy with and staying with?
Blair’s Educational Background And How She Got Started In The Finance Industry [04:45]
Blair: Yeah. And we can get into the details of how all of those moves happened. I guess if we were still living in the traditional resume world and somebody was looking to hire and my resume came across their desk, they'd probably immediately toss it and say, “Well, this person never stays anywhere very long. She's a failure.” But it took me a while to find my home. And there are a couple of twists and turns along the way that were personal life changes as well. I moved from New York to New Orleans after I met my husband.
So yeah, I think just like a lot of people who enter our industry; I started in a brokerage firm. That's who was hiring. That's who hires 21-year-olds with no experience. And so that's where I began my journey. Because – just a little backstory – I went to the University of Georgia, so I was interviewing in Atlanta. I went to interview on an institutional fixed income desk and rode down the elevator with a broker who chatted me up and said, "What are you doing here? Who are you?" And I said, "I just left an interview with the institutional fixed income team." And he said, "Oh, you went to the University of Georgia, we love to hire UGA alums. Why don't you come in and talk to us tomorrow?" And clearly, I had bombed the other interview. But I went in the next day and spoke to him, and he hired me. And that was my first job in a brokerage firm. And so that's really how it all started. And it just took a meandering path from there. But yes, I've worked in probably every business model as an advisor.
I think what a lot of people may not know about me is I did not start as an advisor. I didn't enter a broker training program; I wasn't thrown to the wolves and told to read the phonebook and start cold calling. I started as a sales assistant. That was my first job. So I had a salary. It was a small salary, but I was not immediately being told to generate business. And so that was the first five or so years of my career was working under advisors learning the business from the ground up, even on the operational side. That's where I began.
So I'll ask you what is it that you want to know about that journey and happy to share as much as I can.
Michael: So I think I'd love to just start right there. Well, I guess even like a brief step back. I mean, what were you studying at the University of Georgia that you were then interviewing firms in New York City for institutional bond trading desk jobs? And obviously, landed here in the financial advisor world. Were you in the CFP program at UGA? Were you somewhere else at the University of Georgia? What was the actual studying career path that led you to the industry in the first place?
Blair: Yeah, so maybe I should back up two more steps to start there. I entered college as a dance major. I was a classically trained ballerina, and I wanted to be a ballet dancer. And that was my major going into college. And somewhere around the end of my freshman year, I said, it might make sense to get a second degree while I'm here. Something to fall back on, so to speak.
Michael: As you say, this is like the classic parents. Like, "Blair, we are so happy that you're pursuing your dream, but like get a second major with a fallback?"
Blair: Yeah, maybe this isn't going to pay the bills because even if I am a successful ballet dancer, that career is not very long and I'm going to have to do something afterward. Anyway, and since my parents are so kind to be paying for me to go to college – not that they told me what to do because my parents kind of knew me at that point if they told me not to do something or told me to do something, I was going to do the opposite. But luckily, I had some sense and decided to pursue a business major. Did not know what specialty it would be at first. Started taking the basics. Economics, accounting. And it was in, essentially, accounting 101 where the concept of the time value of money was taught and I was hooked. I thought it was magical that the money that you invest today will earn money, that will then earn money, that will then earn money, and it will turn into something very large into the future. And I knew that finance was going to be my specialty.
Michael: Compounding is the eighth wonder of the world. It was what hooked you in the finance business.
Blair: Yes, that is the nerdiest thing ever. And that's a wonderful thing. That is what hooked me, and I just started studying markets. And as I took capital markets and learned about how to value stocks and bonds and interest rates and options and ended up even taking a futures class over in the ag school because the University of Georgia is a very large state university and there is an agriculture school there. So that's what I studied. I predate the CFP program at the University of Georgia. I'm very proud that it exists today. But it was not an option for me. So I just have your straight BBA and business finance degree.
And that first interview, by the way, was actually in Atlanta. So I started at UBS in their Atlanta office and worked there for the first year of my career. But that's how I ended up with a finance degree.
The long story was I thought I wanted to be an investment banker. That sounded really cool. They worked really hard and made a lot of money and worked on important transactions in the business world. The recruiting at the University of Georgia was about two investment banks, both of which are probably rolled into large organizations. I think it was Robinson Humphrey and some predecessor of Wachovia. They did come and interview. And being top 10% of my class, of course, I was on the list of people they wanted to talk to. But I didn't pass muster. Whatever I said or did, I did not make it to the second round of interviews and was not picked up by an investment bank. So that's why I found myself moving to Atlanta without a first job and going on that interview that I probably found on Monster.com because there were online job listings back then, but that was essentially where they were, and took that fated elevator ride where I ended up working in wealth management, and here I am today.
Michael: So just to be clear on that, you were there interviewing for another job, struck up the conversation with a broker in the elevator coming out of the other interview, and then it was the broker who chatted you up in the elevator that actually became the job path, not the thing you went to interview for from the job you found on Monster?
Blair: Exactly. I was desperately trying to do something on the institutional side of the business. That's what was cool back then. You didn't want to be in retail, that was the lessor job. And the hilarious thing about all of that is that post-financial crisis, the institutional side of the business – half of those jobs never even came back. And now it's all glamorous to be on the retail side because you actually have the opportunity to build work-life balance, and it's a very stable career. But back then, it was not cool to end up going retail, but that's what happened.
Michael: So the broker that brought you in, was that a broker that was on the retail side doing financial advising for clients as we would think of it today, or was that still a broker somewhere else in some other institutional desk in UBS?
Blair: The really cool part about it is that this was a wealth management team in the Atlanta Office at UBS. They had just dropped the PaineWebber part. It was UBS PaineWebber. I still saw some of the old stationery around the office. And they had a split business. Half of it was financial planning, believe it or not, and building long-term asset allocation portfolios for high-net-worth individuals, and the other half was 401(k), pension consulting-type business.
So, right from the get-go, even though my job was sales assistant, answer the phone, schedule the meetings, send out the wires and the checks bind to the presentations, I actually was given experience in entering financial planning data into the software and into doing manager searches for the 401(k) clients. So I really got a nice education on the side of my, basically, secretarial job.
Michael: So I am curious that you've come through with your business degree, scoring incredibly well in the top 10% of your class, looking at finance jobs, and ended out in a sales assistant role that I think, as you characterize it, had a lot of secretarial duties. I feel like for some advisor or for some people even, or perhaps especially, coming out of school wouldn't take that job. Like, I got my degree; I was a good student in college. I have to enter somewhere different for the business. I guess I'm just wondering, how did you look at that first job? Were you happy to land there and thankful for getting a job? Looking at it as a stepping stone? How did you think about that first role coming out of school and saying, I want to be in this business and this is the job I've landed with?
How Blair’s First Job After Graduation And How Her Role Changed After Moving To New York [13:47]
Blair: Yeah, I had a huge chip on my shoulder. I was not happy about it. And I often wonder – I'm thinking back to when I was interviewing for different jobs – why all of those didn't work out. I even went on what you call an informational interview. I don't have any family members in this business. My dad has a family-run, ready mix concrete business, and my mom is a kindergarten teacher. But my dad did set me up with an interview in my hometown of Montgomery, Alabama, with a bank president who was a friend of his. And I remember walking into that office. Here I am on top of my class at the University of Georgia, magna cum laude with honors. And I sit down to talk to this bank president for an informational interview. And after the interview, he says, "You should put in for a teller position."And I remember being so angry about that at the time. And now that I think back about it, I'm even angrier because I have a feeling that if I had been a man, he would have never said that to me. Obviously, I can't prove that, but if you look at my credentials on paper, it doesn't make any sense.
So yeah, I was not happy about it. I didn't understand why this has happened to me. I didn't understand why I was passed over by the investment banks. The truth of the matter is the strength of the University of Georgia Terry School of Business was their risk management program, putting people into the insurance industry as underwriters, and their accounting program. Finance has some distinguished professors, but not great recruiting. And so that's probably part of the story. Another thing is, I think a big mistake that I made is I graduated a semester early. So I finished college in three and a half years. And that December interview cycle is not the cycle where all the jobs are. So it wasn't the school at the time to go to where the Wall Street firms were coming down and looking for hires. And I didn't have an inroad from family connections.
So, yeah, I started behind where I wanted to be. And I was pretty much looking at my friends who went to be underwriters and made significantly more money than me. But that was the only job I could find. And so I took it. And I learned a lot. But I was pretty much a pessimist that whole time, I was not happy that I had gone and earned this degree to basically be a secretary.
Michael: So then, how did that role progress and evolve? What happened? Because I think you were you were there for a number of years. So, what did the role look like or how did it shape up over time as you went from newbie and no experience to not so newbie and having a few years of experience?
Blair: Yeah. Well, the first change happened after a year. I was in Atlanta, and I wanted to move to New York. Luckily, the branch manager in the Atlanta Office was from New York. And I went to him and told him that I was interested in moving and he helped me. He helped me find a position with UBS in their Manhattan office. And so I transferred up there after my first year. I briefly spent a little bit of time – it was part of the wealth management group there. But there was this middle markets institutional team that spoke to small hedge funds. And so I spent a few months there. That ended up actually being not a good fit for me. And so I came back down to the branch on a different floor. And at that time, there was a husband and wife team that had just been recruited over from Wachovia and they did not have a sales assistant, and I helped them with their transition, and I ended up becoming their sales assistant.
So my second year in the business, I was a sales assistant for another team in Manhattan. Coincidentally, this is the team where a friend of theirs who had an account with them who would call in to place trades was a man by the name of Barry Ritholtz.
Michael: Small world. Small world.
Blair: Yeah. And I remember being told by the broker, "Look, this guy, he's on television, he's a big deal. Make sure you treat him really well when he calls in. He's famous and everything." And I treated him exactly as I would treat all of all clients, which was very well. But I do remember talking to Barry back in those days and knowing who he was. It's funny how life is circular in that way.
Michael: And so what led to the move up to New York City? Was this just, I want to live the life of New York City? Was this a career-oriented move? Hey, I think I'll have more Wall Street job opportunities if I can literally get up to Manhattan and be closer to Wall Street? What led to the decision to make the move?
Blair: Yeah, a couple of things. So New York is the center of ballet. So I'd always been interested in New York as a ballet dancer. And although I had been accepted into some summer programs to study ballet in New York, at the time, my parents would not allow me. I was allowed to go outside of Boston for one summer, Houston for another summer, Charleston for another, but I was never allowed to go to the summer programs in New York City. So I'd always loved the city and never even visited it until my junior year of college. And then it was also the center of finance. So it had always called to me. I knew I wanted to live in New York. And, lo and behold, I started dating a guy who lived in New York. And so all the pieces came together. And I was able to make, basically, a lateral transfer with UBS up to the office there.
Interestingly enough, at first, UBS wanted to tell me that they could not give me a raise because it was a lateral transfer. And they wanted me to move up there on my tiny...
Michael: You went to Manhattan on an Atlanta sales assistant's income?
Blair: Yeah. So luckily, I was able to get bumped up to whatever the starting pay would be for a sales assistant in Manhattan, but there was a little hiccup there. So it was basically a lateral transfer for personal reasons. And here I am 23 years old, getting on a plane with bags that weighed a little too much. And I remember my mom dropping me off at the airport and having to take some shoes out and telling her to mail them to me. And I moved to New York with a really heavy suitcase. And that was the start of a wonderful six years that I spent in New York.
Michael: So what happened? What happened next on the journey? You're now living a sales assistant job with this new team, with this husband-wife team that's come over. So what was your role there in practice? What were you doing at this point?
Blair: Yeah, what was really cool about working for them is they had a very traditional buy-and-sell-individual-stocks-and-municipal-bond-type business. And the focus at the time at UBS was to take smaller accounts and put them into mutual fund wrap fee programs. And they really allowed me to do that for them. To research what should be in the models. What should our asset allocation be for these smaller accounts? And pick the funds and build them. So in addition to holding down the fort if they were out meeting with clients or had not come into the office yet that day, I was answering the phones and handling the client relationships. But I also got to flex my muscles a little bit on the investment side, and for the first time actually make investment decisions. And at the time, I was studying for or had passed maybe CFA level one, and was studying for level two. So I was really getting into it on the investment side.
And those were some really fun days. But I started to realize that I needed to move up to something else, that I wasn't going to just stay with their team and grow with it and do what a lot of people try to do, which is maybe one day these people will retire and I can take their business. That was never really something I was looking to do.
So I interviewed for a role internally. It was called a branch analyst. And it's essentially a resource that sits in the office and puts together investment presentations for all the brokers in an office. And I got it. And it was two blocks down on Sixth Avenue in another UBS branch, and I moved to that. And I remember it was almost like – I call it my Tess McGill moment – from the movie, "Working Girl," where she gets her own office and she sits back. And there was no window. But I remember just sitting down and I had...
Michael: But there was a door. It's not about the window, it's about the door. Yeah. I have a door, I can close the door, and then it's my own private space. Yeah.
Blair: I had that. And so I worked for a few years. It was another huge UBS office in Manhattan, something like it took up a whole floor – a whole city block. We backed up to the Lehman Brothers building. And that is where I witnessed the financial crisis. It was from that role in that job. I remember the auction-rate certificate market seizing up and clients that thought they had high-yielding cash not being able to get their money out. I remember the structure notes that were backed by Lehman becoming worthless. I was there for the whole shebang in that office.
And that's where I witnessed the carnage of the great financial crisis. And that was a fun time because essentially, as a branch analyst, not only are you a resource for all the advisors in the office, all of the mutual fund wholesalers come to you. And so part of my job was putting together lunches and dinners and events for the mutual funds where the manager, wholesalers, could get access to advisors to pitch their products. So I always like to laugh that I was probably paid more in steak dinners than I was in salary for that job. But it was a whole lot of fun. And it was something that there are not a whole lot of better ways to spend your mid-20s than doing that.
Michael: So you mentioned there that you had also started working on the CFA on the side or in parallel while you were doing this. So can you talk a little bit more about the CFA? What led you there? What were you trying to do or pursue? How did you end out adding in the CFA? Because if I just think generically of a person in their 20s who enters a sales assistant job, usually I don't hear a lot of like, yeah, I'm a sales assistant and I'm already halfway through my CFA. Doesn't come up a lot. So talk to us about, where did the CFA come from in the midst of this stage of the career journey?
Why Blair Decided To Pursue Her CFA Designation And Her Move To Join Wealthstream Advisors [24:32]
Blair: I was trying to punch through my glass ceiling. I was dating a guy who worked at Goldman Sachs. He had taken level one in the CFA. He had some fancy job making twice what I did, but he wasn't twice as smart. And I was like, well, maybe this is a way out. And there were a lot of young 20-somethings in Manhattan who were taking their CFA who worked in finance. So I said, "Well, I can take tests." So I started studying for level one with his books from the prior year. I didn't even buy new books. And took level one – I guess maybe at the end of my first year living in New York and passed.
I remember I took it at the Javits Center. And it's just rows and rows and rows of people for hours. But the problem of the Javits Center is they let you out for a two-hour lunch break, but it's like a food desert. This is before you had Google Maps on your phone. And I remember stumbling out of there because when I found out I had 30 minutes left and I had way more questions left than I needed to and my heart basically almost jumped out of my chest. And I walk around, and I can't find anything to eat, and I know nowhere to get something to eat. And I went into a 7-Eleven and I basically got a Snickers bar and a diet coke. And that was like what I lived on for the rest of the day. So at the end, when I walked out of that test and they were handing out t-shirts that said: "I survived the CFA exam". I was like, "Yes, I need that," because I did just survive the gauntlet.
But yeah, I was trying to find a way, like, how can I break out of basically entering the business in a role that you don't really move from sales assistant to advisor? That's not a career path. So I was just searching for ways to prove my capabilities. And I took it, and I passed it.
Michael: And so, what age or stage are you at, at this point in the journey?
Blair: It was August of 2007 that I started as the branch analyst. I was probably 26 years old. And I was in that role all the way through April of 2009, where on the 10th round of layoffs I was finally the one to go. Because if you think about it...
Michael: So close. You survived the first nine.
Blair: Yeah, well, it's like they were cutting, cutting, cutting. And at what point do you say, "Okay, here's like this added resource that we can do without in the branch"? It has nothing to do with the person. But at this point, I still had a chip on my shoulder. I still didn't understand why I couldn't get ahead in this business. So they knew I was unhappy. But they also probably knew I would land on my feet. I remember most of the layoffs, you'd get called in, and like, the HR or the director of the office would read you the script and you'd be out of there. But when I walked in for mine, the actual branch manager showed up for it, and I never saw him show up for a layoff before. So I felt like that was like a little bit of respect in a way.
Michael: I would say you got fired with respect. You got to appreciate that a little.
Blair: Yeah, I do to this day. And I remember he told me to go to Europe with the check – like the severance check. And I was like, "No, no, I'm taking CFA level three in six weeks, I'm going to be studying." So.
Michael: Sweet. So you get the bad news in early 2009. So by this point, you're essentially getting fired at the market bottom now.
Blair: Yeah, I guess March was officially the bottom. Yeah.
Michael: So then what comes next? Like you are now laid off from a Wall Street firm in the middle of what, essentially, is a depression for the financial service industry. It was a recession for the country. It was really a depression for the financial services industry, and particularly for the ground zero of it, literally being in the Manhattan finance world. So what comes next? You're not even done with the CFA. So you got to use those letters, which may have helped for getting the next job, but you got to find something. So what comes next?
Blair: Yeah. So I was given a few months' pay and went home to study for the CFA level three. I was a little nervous. But honestly, everybody in their 20s who worked in finance was out of a job that summer. It was fun. We went to the beach. We partied. I remember watching the entire French Open tennis tournament because I'd just wake up every day at 7:00 and watch tennis.
And then a mutual fund wholesaler with Thornburg – thank goodness Thornburg did not split their wholesalers between broker-dealers and RIAs, because he worked with both channels. And he knew of an RIA firm that was looking to hire somebody, and he thought I was a good fit. And so he told me about it. And I literally was like, I'm studying for the CFA, but I need to keep my interview skills up. So I'm just going to go on this interview. I'm not really interested in getting a job yet, but I'm going to go and make sure that I maintain those skills. And so I went for an interview at a firm called Wealthstream Advisors, a registered investment advisory firm in Manhattan. Michael Goodman is the founder. And it turns out it was an excellent fit for me and I joined them as a wealth management analyst, I think, in July of 2009. So after the exam was over, I came on board there and that's how I ended up on the RIA side of the business. A connection that I knew as a mutual fund wholesaler made the introduction – thank you, Rob McInerney with Thornburg. You really changed the whole trajectory of my career. I've never looked back.
I remember when I was meeting with members of the team at Wealthstream, somebody told me, "Well, you do know you're going to have to give up your Series 7." And I had never heard of that. I thought that was the only way that you could work with clients was if you had your Series 7. So I really knew nothing about RIAs at that point, but luckily was introduced to one of the best firms, I think, out there to this day, and was hired very quickly before my severance ever ran out.
Michael: I was going to ask, making this shift – or even call it leap – from mega UBS Wall Street firm to a small independent RIA. Did you know what RIAs were? Did you know what you were getting into? How did you come at this at the time?
Blair: I really had no idea. I remember as a branch analyst at UBS when there was – I forget the law that was passed – where broker-dealers could no longer offer fee-based accounts with no advice. Groundbreaking decision.
Michael: Yes, that was 2007. That was FPA versus SEC 2007. The FPA got that rule struck down that was allowing broker-dealers to do fee-based accounts without advice, without fiduciary. And then after that happened, within a year, heading into 2008, the whole BD world had to start shifting to roll their fee-based accounts under the RIA side, and everybody suddenly was becoming a hybrid.
Blair: Yes. So around that time, as the branch analyst, my role was to increase assets in what we called managed money, right? Not commission-based business. And so because all of those accounts were now in jeopardy of being kicked out of the program, I remember my job was to go around and make all the advisors go through this process that showed they had done an annual review for those accounts. And that for the next year, they would be able to keep their non-commission based trading accounts, as long as the advisor was saying, "Well, I'm doing an annual review with them." They were basically just putting lipstick on it.
So I was aware very vaguely that this existed, but I did not know what an RIA was.
Michael: I say, but like this wasn't exactly, let's do proactive fiduciary financial advice. This was the, "Hey, Blair, do you think you can give me a piece of paper in the file that shows we did the due diligence of an 'annual review' so I don't get sued for this?"
Blair: That's exactly what it was. That is 100% – fill out these 7 questions that you had with your client this year to show that you did your annual review.
Michael: So, did you know you were interviewing with an RIA? Did you make that distinction? Or was it just you were in wealth management, you were interviewing with a firm that was wealth management. And after you got there, someone said like, "Well, you realize your Series 7 is going to go away," and you did, "Wait, what?"
Blair: Yeah. I knew they were obviously employee-owned, not affiliated with a broker-dealer, but I didn't know how it all worked. And it was in the interview process that they told me, "We don't house your Series 7 here. We have no way of doing it. It actually won't expire for two years. So if you do need it again, and change your mind, it's not like you're making the decision today to give it up. But just know that that's what's going to happen."
And that really made me nervous. But then as soon as I get in there – and basically, I'm taught the practice of real financial planning, and I see how you can work with clients on what I call the same side of the table as them, without the pressure of compensation structure changing every year and figuring out how you're going to make the same dollars by offering your clients different services and without the branch manager walking around the office saying, "Hey, have you done any of that structure? No, we need to hit our numbers." I very quickly learned, "Oh, this is amazing. I'm so happy that this happened to me." Getting laid off in hindsight was actually the best thing that could have ever happened to my career because I'm not the person who would quit.
So yeah, I didn't know what an RIA was, but I very quickly learned, and I'm very glad, like I said, that Thornburg did not split their coverage of the two channels because I never would have been given this introduction.
Michael: So what was the appeal of going to the firm at the time? What sold you on going to this little non-Wall Street, employee-owned wealth management firm thing? For a lot of advisors who have only lived their careers in a large-firm environment, this is a sort of a strange alien world of like, so basically, it has very little size or resources, and no one really knows what the career path is. Like, wait, why are you going there?
Blair: Yeah, they told me what they did with their clients. They said, "Here's how we do financial planning. Here's how we handle investment recommendations." And I said, "This sounds good. I like what I'm hearing here. I'd like to work with clients in this manner." My role was going to be doing all the trades because I had experience placing trades as a sales assistant. It was going to be sitting in on client meetings for about half the clients of the firm. I'd be the secondary "advisor" at the time, fixing and preparing the quarterly performance reports and then building the financial plans. And the work sounded interesting to me and I liked the people. And like I said, I didn't expect when I went on the interview that this was a job that I was going to take, but what I heard when I went in sold me. And so I started with them.
And I had already passed the CFA exam, but I didn't know until a couple of months later. And then they encouraged me to pursue the CFP. And so the following March, I sat for the CFP exam, and they really taught me how to become a financial planner. And that's really where... And the longer story is, I'd probably still be there. Except I met my husband, who lives in New Orleans. And so love took me on a different path. I'm still in touch with the guys at Wealthstream and have followed them all along the way. And we're very good friends to this day. In fact, when I told Michael that I was leaving to move to New Orleans, I actually started crying at the table because I didn't want to really leave them. Because it was a wonderful, very formative time in my career where I really learned how to do what I do with clients today.
Michael: I think it's fascinating just the way sometimes these journeys flow, particularly stumbling over to the RIA channel. I remember a similar dynamic when I first made the shift in my career from the broker-dealer side to the RIA side, and I think very similar to you like, I didn't know what the difference was. I didn't even really know there was a difference. I don't think I had any discussion that I was going to an RIA and it was going to be different. At some point, the discussion came up of like, "You realize your Series 7 is going to go away, and we don't have a way to house your license here." And similarly, all I remember was like, "Okay, well, it sticks around for 2 years after you let it go, so I have 730 days to figure out whether these people are any good."
In my head, I was like, okay, at least there's a two-year window before I can fall back out of this crazy, whatever strange land that I found myself in and keep that Series 7 license. And obviously, I never went back to it. I ended up staying at that firm for 17 years. But I had no idea what the difference was at the time. I think to me, it was just – it was very similar. Like, I had lived in firms where it was still very much about sales and production and volume. And there was this firm where it's like, “No, we really just want to make sure our clients are getting good financial plans. And your job is just to help create the plans and deliver the plans in front of the clients to make sure that they're getting all the good planning advice and we're going to go find more clients. How does that sound?” It's like, all right. That sounds really good. I kind of like that. And these are good people. And we seem to be doing good things for clients. Let's go. I had no idea what the difference was between the channels at the time, though.
Blair: Yeah, very similar. For me, I remember thinking, well, if it doesn't work out I have two years and I can still have my Series 7. But it did not take me long to realize that I was never going to go back.
Michael: And so you just sort of mentioned in there as well, like, late summer into the fall of 2009, you're just getting going in this new role with Wealthstream, you're just finding out you're passing your CFA exam, but the firm says, "Hey, you should check out the CFP marks as well." And then boom, you're sitting for the exam six months later or so. Like, you plowed through CFP coursework fast.
Blair's Pursuit Of The CFP Certification And How She Gained Client-Facing Experience [39:10]
Blair: Yeah, so I was able to challenge the coursework. I didn't have to take it because of my CFA.
Michael: Oh, because you had just gotten your CFA marks?
Blair: Yeah. So I just studied and took the exam. Now, that's no small task in six months, but yeah.
Michael: Particularly when you haven't been through the structure of the other classes. Like obviously, the investment part was going to be pretty straightforward because you go way deeper on the CFA exam, but estate and insurance and taxes I would imagine are things you had not dealt with much at all at that point.
Blair: Tangentially. In my very first role, I was entering data into the financial planning software, so I knew some of these concepts. But yeah, it was a beast to study for. And the hilarious thing is another example of I didn't even buy the books. I borrowed the books from a colleague who had taken it two years earlier and just went to town on self-study, and somehow in March of 2010, I took the exam. It was still a one-and-a-half-day process of sitting for that exam, somewhere in downtown Manhattan. And luckily I passed it. And along the way, I'm actually learning how to become a financial planner from the folks at Wealthstream. So that was the really cool part of the process.
Michael: And so did you do an exam prep class or any of those or just you were good with, I'm just going to take these books and just start reading and cramming for it?
Blair: No course. The same with CFA. I was all self-study and then you get whatever question bank you can get access to take practice tests to make sure that I was on course. But yeah, all self-study.
Michael: Interesting. Do you remember what were the question banks back then? CFP board provides some materials for that now, but I don't think they had those 10 years ago.
Blair: Yeah. So I actually use the books from a company called Keir. I don't know what happened to them.
Michael: I think Keir got merged into Dalton at some point.
Blair: Okay. And I also bought some questions from them. I must have. Somehow I was taking questions. So I know it was from one of the providers of content because I know every time I got a question wrong I made a notecard. And on the very last morning before the exam, before I went in, I'm flipping through my note cards, and I finally get the concept of, if your employer pays your disability insurance, your disability income is taxable and if you pay, it's not taxable. And that came up three times on the exam. And I literally got it the moment before I walked in. So that's my most vivid CFP exam memory, really. A lot of it might also be a little hazy in hindsight. It has been a decade. So.
Michael: So then talk to us a little bit more about the work and the role at Wealthstream and how it evolved. So you said you started out – like you'd be doing the trades, preparing quarterly reports, starting to sit in on client meetings. First, I'm wondering just how much time had you gotten in actually being able to sit in front of client meetings in the past? Were there prior roles where you did that or was branch analyst and sales assistant pushing you mostly to the background work and not necessarily the client-facing meetings?
Blair: So as a branch analyst, I would sometimes present the investment presentations to clients. And as a sales assistant, I had the client relationships because I was on the phone with them. And so, I did sometimes sit in on the physical meetings as well. But this was really the first time I was sitting in a meeting for the purpose of being the second advisor, taking the notes, making sure, you know, that all the prep work was done prior to the meeting. So yeah, this is where I really learned to become an advisor as well was sitting in on those meetings and becoming the second eyes and ears on that client relationship.
Michael: And so what was that like for you, seeing this different kind of financial planning and financial advice relationships? How did you view it? Or what did you feel like you were learning or taking away from it?
Blair: Yeah, this is where you get your reps. Becoming an advisor, it's not something they teach in business school. The skillset of listening and reading the client's emotions and helping drive them towards making the right decisions with their investments and their financial plan. You can do financial plans for people all day long, but they may not actually implement them. So if they're going to hire you to be your real advisor or a fiduciary advisor, that's a skill set that I only learned through doing. And so, like I said, this was a very formative part of my career. It really set me up to do what I was going to do in all the years following it. And I loved it. But I was so green. I just sat there and took notes most of the time until maybe the second or third meeting with the same client where they started to build a rapport and feel more comfortable. But yeah, they taught me how to be an advisor. I give them full credit for that.
Michael: So how do you distinguish what you were learning to be an advisor there versus what you were learning about being an advisor where you've been previously? I'm sure the firm you were at UBS, they put financial advisor or consultant or something similar on their business cards as well. What was the difference?
Blair: Yeah, I think at UBS, it was more about their producers. What was our production last year? What's it going to be this year? I had a branch manager who would literally rearrange the offices that the brokers sat in based on the production, so if your production fell, you'd get moved. In fact, I had a scheduling problem one time. I was going to fly home to Alabama for Christmas and it didn't get on the calendar correctly. And so my punishment when I came back was that my office had been moved to a lesser desirable place in the office.
What I saw was at the brokerage firm was clients were sources of revenue. The way you maximized that revenue was to sell them more products and services, do the lending, do different types of business lines. I didn't see a whole lot of the financial planning relationship, the sitting on the same side of the table. It was always just explaining why performance was what it was for the last quarter, dealing with the requests that come in because most advisors probably have way too many clients than they could possibly even service. So it's a very reactionary service model. And I couldn't really put my finger on why I didn't like any of that until I got to the other side of the business. And I was like, wait a minute, this is so much better. This is what I've been looking for. How did I not know that this existed all along?
Michael: What do you attribute that made it so different at Wealthstream than UBS?
Blair: Just that there were no outside influences trying to tell you what you should recommend to a client. Even if it's not explicit, the compensation grid drives everything at the brokerage firm. That there were mutual funds share classes that didn't even have any extra fees in them, and that you could offer them to your clients, that you could offer Vanguard funds to your clients. And it didn't matter, because there was just no overlord telling you what's approved on the system. And I didn't really understand the mechanism for what was going on in the broker-dealer that... And I know things have changed a lot. I've been gone since 2009. But everything was driven by how's the firm going to make money off of this?
Versus, at Wealthstream, which is – yes, we need to get more clients and become a larger firm, but we do that by helping our clients come to the right decisions and giving them the advice so that they will then refer us to other potential clients. And then just the collaboration, working with the client’s CPA or estate planning attorney. Actually going and sitting in those meetings and getting really deep into the details of their financial plan. The things that matter. We can't control what happens in the market this year, but we do know what the tax laws are and how you should probably strategize around accelerating expenses in certain years and deferring them in others or thinking about your charitable gifts. These are things that you didn't even talk about at the brokerage firm.
So yeah, it's totally different. It's being in a factory that's supposed to produce revenue from your clients versus giving your clients advice. And I know that it feels like that to a lot of people in the brokerage firm. It didn't ever feel like that to me.
Michael: So then what came next? You're obviously not still at Wealthstream.
Blair's Move To New Orleans And Starting Her Own Solo Firm [48:04]
Blair: Yeah. So I met my husband. He's from New Orleans. I decided to move down here. And I looked for jobs. And essentially, the job market and finance in New Orleans is very small and very difficult to break into. And there were not many RIA firms to begin with. And in most of them, everybody had the same last name because it was a family business. And so there were really no jobs for me. So I decided to hang my own shingle. I said you know what, I've got my CFP. I've got my CFA. I know how to be an advisor. I'm going to do financial planning and investments for people, and I'm going to build that from scratch.
So in 2011, I moved down. And I started trying to do financial planning by the hour and investments on my own. And that was a really, really hard stretch. The first year – I can see it on my social security statement. It's a big fat zero. Every dollar that came from any client went right back into trying to build a firm from scratch. So I was a reluctant entrepreneur. This was my only option if I didn't want to go back and work for a bank or a brokerage firm and be in New Orleans. There wasn't remote working back then.
So yeah, I ended up inadvertently hanging my own shingle and trying to figure out how I was going to build essentially, a Wealthstream, which is hilarious that I thought I was going to do that from scratch.
Michael: So, tell us more of what was the vision of the firm as you were getting launched? What were you aiming for or envisioning to do? What was the original model of what you were going to do and who were you going to go after and what were you going to charge?
Blair: Yeah, well, originally I was going to work with high-net-worth clients. And I started by calling all of the estate attorneys in town. And I went into their offices and met with them and told them I'm going to do comprehensive financial planning and investment management for high-net-worth individuals. And in the south, everybody is polite, everyone will talk to you. But that doesn't necessarily mean that they're going to start referring you business just because your 29-year-old self walked yourself up into their office and told them how amazing you were at financial planning. So I started to realize, you know what, older people still see me... I still would get asked where I was in school. Older people saw me as their child.
And so I decided that you know what, maybe I should start marketing to people my age, Gen X and Gen Y. They don't have a lot of AUM but maybe I can do financial planning by the hour, lower my minimum, still charge an AUM fee on anything I'm managing but also do financial planning on an hourly basis.
And so I ended up calling my firm Ignite Investments and Planning. And the focus was on younger clients, Gen X and Gen Y. And that's where I had a website, and I was blogging and trying to promote myself. And I started my Twitter account. And basically, was just throwing as much stuff up against the wall as I could, but I did realize that I needed to work with younger clients because those were the people that were most likely to actually give me some business. And so that's what I was doing for a couple of years. Making very little money, working side jobs to pay the bills. I was a waitress at a restaurant bar down the street for me where two-lane kids hang out late into the night. And then I ended up through Craigslist meeting a guy who was looking for an assistant-type role. Coincidentally, he ended up investing in Ignite Investments and Planning to try to get me off the ground. And we're still friends to this day. We bounce ideas off of each other. But yeah, I was working multiple jobs and trying to do financial planning by the hour with an AUM investment management business on the side. The only custodian that would take me at the time was Scottrade. No. Yeah, Etrade, Scottrade. I can't even remember.
Michael: Yeah, Scottrade at the time had a small advisor services division.
Blair: Yeah. So I with Scottrade, renting space in like one of these entrepreneurial incubator startup places, $450 a month for a desk, and basically being a starving entrepreneur for a couple of years.
Michael: And so, how did it go? Obviously, the first year was not pretty. It's pretty much sucky for everyone in the first year. Were you finding any momentum as a year or two went by? How did it evolve and play out?
Blair: Yeah, so I don't know if I would have made it or not. It wasn't going well. I was having success doing hourly financial planning. I think my blogging generated some success. And I worked with young professionals that weren't even in New Orleans, which was great. But that business model was working. But the AUM model was very slow, and I just wasn't getting a lot of traction there. I am not a great prospector. I am really great at talking to somebody who already wants financial planning and is interested in it. But what I found is prospecting is going through however many people you need to find the person who actually wants financial planning at that moment that you happen to meet them.
So I did everything. I went to like chamber after-dark events, all the networking events, joined every organization I could think of from the University of Georgia alumni group in New Orleans to the Junior League, which is a women's volunteer organization, even drove up to suburbs to go to professional women's groups in other towns near New Orleans tried to drum up business.
And so it really wasn't going very well. I mean, every extra dollar I made had to go back into some piece of technology or some investment to try to keep up the services I was providing. And coincidentally, I applied for a scholarship to attend a NAPFA conference because I just couldn't justify the business expense of going to a conference. And it was out in Las Vegas at a NAPFA conference when a local RIA, ThirtyNorth Investments called me and said that their CIO, one of the founders of the firm was leaving and they needed a replacement. And it was an offer I couldn't refuse.
Michael: Like you met them through – not for going to this conference – or just coincidentally while you were out at the NAPFA conference they called you back locally?
Blair: Yeah, I had met them probably when I moved to town and I was trying to find a job. And they were hiring for a position that just wasn't an advisor. It didn't make sense for me to take that job, and we agreed this is not a good fit for either of us. So they knew who I was. And when they needed a new chief investment officer, they called me. And so I ended up joining them.
So I probably would have failed to be honest, if I'm being honest with myself. I don't think I was going to do that well. But I didn't give myself enough runway because an opportunity came along that I couldn't turn down.
Michael: So then what was that role? What happened to Ignite? And then what was the role? And what did you go into at ThirtyNorth?
Blair's Role at ThirtyNorth And Why She Eventually Decided To Leave [55:30]
Blair: So Ignite pretty much dissolved. I gave my investor back his investment, and we hashed that out. I brought a few clients with me to ThirtyNorth. And I started out basically doing triage on their portfolios. The prior chief investment officer had some pretty far-out-there views and was significantly overweight in emerging markets, was very pessimistic on the U.S. dollar. If you remember, this was around the time that you had the debt ceiling debate and the downgrade. And so I actually went to work immediately on the asset allocation and the portfolios and shifting them and immediately meeting with their clients to try to save some clients who were thinking about leaving, because the CIO and founder was exiting the business. So it was an emergency situation. I jumped in feet first and went to work. Rolled up my sleeves and was willing to do everything I could to help them.
Ironically, the woman who was doing their trading also left the firm at the same time. So immediately after I get there, I have to also do the trades. So...
Michael: So, determine the allocation and implement it.
Blair: Yeah, so that was a bummer. Because I thought for the first time in my life, I won't actually have to enter the trades, but it turned out that we never actually got to the point of hiring back a person at that firm that would do the trading. It was always me. So I was helping with the portfolios, running the investment committee, meeting with clients. I recommended that we start doing financial planning. So I was doing the financial plans as well.
Michael: Because they had been sort of pure investment only up until that point and just were focused on managing portfolios?
Blair: Exactly. Yeah.
So we were doing that. And then I was also the chief compliance officer. And the SEC did come in. And I was able to give them everything they asked for. I think it was a summary audit. So it wasn't that long. But it's hilarious because they told us that we want to talk to multiple people in the firm. And they came in and interviewed me for a morning, and they never talked to anybody else at the firm. So we passed. But yeah, everybody there was doing a lot of stuff. This is a small firm. Everybody was doing whatever we could to try to grow that business. And if you've ever been in an RIA that's trying to make it from 100 million in assets under management to 200, I think that's probably the hardest part of growing an RIA. It is a slog.
So we were working very hard for the five years that I was at ThirtyNorth to build that practice. They had a focus on 401(k) consulting, as well. And were doing a great job being fiduciary advisors on the 401(k) side, and that's a long lead time. So I was holding the fort down on the individual side and wearing a lot of hats there.
Michael: And so that was the size of the firm over 100 million trying to get to 200 million?
Michael: And how many people were there? Like, just how many others were there as you're wearing so many different hats yourself as well?
Blair: Yeah, so there were three professionals and one support staff. And I ended up becoming a minority partner. So you could say there was a major owner, and then two of us had a minority interest in the business. And so that's a lot of professionals trying to live in a business that's not generating the revenue for three professionals. And every extra dollar we made really needed to go back into the business. We needed to hire somebody to do the trades that wasn't me.
So while I was really happy with the quality of the work that I was doing there, I loved the team; I thought it was my forever job. But it turns out that my son was born. And I looked up and said, this is not going to grow fast enough to allow me to achieve my own financial goals. And actually, on a drive up to visit my parents in Alabama, I listened to your podcast the first time – that you were a guest – and I listened to your story and something clicked because I realized that when you joined an RIA firm, you joined one that grew to over a billion. And I was like, I probably need to do something like that.
So that's when I started considering leaving what I really thought was my last job, that I was going to stay at ThirtyNorth. I was the youngest partner there. Maybe one day I would become a larger owner of that firm and I would grow it over time. And I'd be working in one of the premier advisory firms in the city that I live in, and that was going to be my job. But I realized that I wasn't going to get to where I needed to go with that trajectory of growth.
And so actually, that year, before I decided to make the change, I moderated the wealth management conference. That's a funny story. Whoever was moderating it at the last minute was unable to go. And they called me up and asked me to do it two weeks before. And I had no idea what I was getting into. It turns out, the moderator of that conference introduces every single speaker for one and a half days. So I jumped into that role. And I ended up moderating a panel towards the end of the conference where a woman reminds me of George Kinder's Three Questions. And just to review what those are. It's a financial planning technique to try to help clients figure out what's really important in their life. If you had all the money in the world, how would you spend your time? How would you spend it differently? And then, if you found out from your doctor that you've got a medical issue and your lifespan is limited to maybe the next five years or so, how would you spend your time if that happened to you? And then lastly, you find out from your doctor that this is your last day, what did you miss?
And so it's a really deep introspective practice of what matters to you. And I revisited those questions again and found that the answer was I needed to make a job change to accomplish the things that I wanted in life. And that's why I left that really wonderful job and joined Ritholtz in June of 2018.
Michael: And so the constraint for you for where you were was the growth? It sounds like you were happy with the work you were doing and the people and what was being delivered to clients. Like, the growth was the limiting factor here?
Blair: Yeah, and I wasn't able to focus any of my time on business development because I was the chief investment officer, the chief compliance officer, the person doing the financial plans, and the person placing all the trades. So I wasn't even able to move the needle. And so the business, it was coming in, but it's just really, really hard to get from 100 to 200. And that's not a place really where a firm should have three full-time advisors. That amount of revenue doesn't support the lives of three professionals.
So I just decided that I should just go somewhere where I can be more effective and somewhere that's growing faster. And it was really a tough spring for me because I didn't want to give up on something that I'd worked so hard in for five years. But around that time, Josh Brown, who I had known because we were on the same 40 under 40 list for Investment News, we would speak at the same conferences. So we knew each other. He wrote his blog that he had failed to hire women advisors at Ritholtz Wealth Management, and we started talking that day. And I moved a couple of months later over here where I am today.
Michael: And so I'm wondering, how do you get comfortable with, as you said, making a transition from something that you'd worked so hard on for five years trying to build the firm where you were?
Blair: It wasn't easy, but it's like ripping off a band-aid. Like, once I had made the decision, it was okay. But allowing myself to think that I was going to leave, just getting myself to a point mentally where, okay, I'm going to make this change, was really tough. I had built relationships with those clients. But they're fine. They're being handled by some great advisors, and they're going to be okay. So, yeah, it was tough. There was also a little bit of crying when I left on the last day, and we're still friends. And I miss working with them on a daily basis, but I needed to do something else. And once I had mentally made that decision in my head, it became very easy.
And it turns out that I finally found my home. One of my blog posts early on was that I'm one of the misfits. This is where I really belong. I already had a social media presence. I was already pushing the envelope on what I would say on social media. I had been doing media appearances, speaking, blogging, writing – oh, and by the way, being a financial planner and advisor. It's kind of funny. On my last day at ThirtyNorth, I shot a photograph of my office and said. "It's bittersweet leaving, I'll let you guys know what I'm doing on Monday." And like the immediate replies were, "She's going to Ritholtz Wealth Management." So it was like everybody else in the industry even saw that it was the perfect fit for me.
Michael: And so, how does that transition work exactly? Did you have your own client base, or the idea was you were being recruited for your clients? Was the idea just Ritholtz just wanted to hire you to be an advisor with the firm because they've got their own growth engine with all the blogging and the social media, and the rest that they do and any clients you happen to have or get are just a bonus at that point? What was the idea of it? Because I think for a lot of advisors, changing firms is sort of contingent on bringing all your own clients, but that's awkward when you were at a firm where these were shared clients and not necessarily easily separable in that way.
Blair: Yeah, I think they a little bit took a chance on me, but I had some clients from my original Ignite Investments and Planning. So there was something there because Ritholtz was really hiring at the time advisors who could bring clients. But when Josh said to me, "Look, we have people going on to our websites who know that our minimum is $1 million, they know we do financial planning, they just want to talk to a good advisor, and all you have to do is call them up." I said, "I know I can do that." And then when they walked me through how an advisor is compensated for doing that, I said, for the first time in my career, "I can see how I'm going to make," it because I knew I can do that.
And so, while I wasn't bringing a huge client base, it was so obvious to me that as soon as I was over there and settled and able to get on the phone and call these people and do financial plans for them and show them what we could do, that it was going to work out. And fast forward a year later, when it came time to review the work that I had done, I'd basically justified coming over and the compensation structure and everything.
So I just had total confidence, because I knew this is the missing piece for me. It's the prospect. Getting the qualified prospects in front of me, that was the missing piece, I could do the rest. And that's basically been my experience from day one. Probably about 1 out of 10 people I talk to who are interested in learning more about our firm become a client. So it's been a phenomenal two-and-a-half years of doing that. Because I've always been on a team or the support person, or on my own all by myself, literally. And now I'm an advisor to so many clients knocking on the door of 90 million in assets under management, almost from scratch in two-and-a-half years.
Michael: And so I am curious. You sort of alluded to a difference in the compensation structure of how it works there. Can you share at all how does it work? Or what was unique about the arrangement at Ritholtz as an advisor versus where you didn't previously?
What Made Ritholtz Unique [01:08:21]
Blair: Yeah, the difference is the ability to grow. But what I love at Ritholtz is it's very clear. It's a salary. It's not like being at a brokerage firm or a warehouse where everything you bring in, you get a percentage of it, and it's yours to keep, and you're in control of your destiny. We're a team. So we're a salary with bonus. And the bonus is actually more frequent. It's like every quarter. But it's just a very clear calculation of, if this much in revenue comes in from what you bring in from the people you talk to, you're going to get this much of it in your raise, and then every quarter if the revenue of the firm goes up, you're going to get more bonus from that. And I said, "Well, I know I can bring in this many clients," and it's worked out exactly how I expected. And rather than being at a slow-growing business where, at the end of the year, if there were any profits leftover, we had to reinvest them in the business. And there was no more blood to squeeze from that stone. We were paying ourselves as much salary as we could. So that was the difference – the growth.
Michael: So compensation is salary-based, but salary still at least partially ties to the amount of clients or assets or revenue that you're responsible for. So it does still grow as your client base grows, but it's not, you know, here's your percentage off the grid?
Blair: Yeah, it's like, here's how much the revenue from the clients that you service was last year versus this year. And you get a very clear amount of that as a raise. So there's a certain amount that will be your raise this year, and then you will get a quarterly bonus. And you can participate in the fact that if a firm has a great quarter – which most of our quarters are up – that's like being on a rocket ship. We're just going straight up except for having 35% market correction in March. That's pretty much what we're looking at. So.
Michael: Minor details.
Michael: At least we billed on March 31st and not on March 21st because that would have been a lot worse for most of us. So, how does the role work overall? Because as you said, at ThirtyNorth you wore a lot of different hats in a small firm environment. Ritholtz, well, it's still a very small firm compared to like a UBS, even. And anybody in the RA space is minuscule compared to Wall Street wirehouse firms, but I know Ritholtz is significantly larger than most RIAs. And so, what's the size of the firm? And what is your role within the firm now compared to what you were doing previously?
Blair: Yeah, so this is the best part, really, of the switch that I made, which is that I now only spend my time on the things that I am most productive doing. I'm no longer the chief compliance officer. I'm no longer entering trades. I am a client-facing advisor. So I do financial plans. I call my clients. I review their financial plans. I manage that entire relationship. I recommend which strategy they should be in and manage all the things that happen throughout the year, and the changes that happen in their lives. And just owning that relationship. And I write my blog. And I'm on the investment committee. And I do some media relations. So I'm actually a little bit less singularly focused than most people are at my firm. I have my hands, probably in too many pots, but I like them. But I don't have to spend any time doing the things that were holding me back from being the most productive professional that I could be. That's very freeing, to not have all that.
You've given the analogy of the big rocks and the pebbles in the sand. I felt like every day prior I was just in the sand and never really getting to the pebbles, or much less the big rocks. And now I'm just doing the big stuff. And that's amazing. And I enjoy it so much because I'm talking to really cool people all over the country who need help with their financial plans and figuring out what they should do with this mass of money that they've accumulated. It's a little bit of an ivory tower to be sitting in. I'm not helping people that are having trouble paying their bills. But these are real problems. And I'm helping people solve. So I love that. And I love that for the first time in my career. I don't have to enter the trades. Thank you, Patrick Haley, who is the head of our trading department. There are people that are just focused on doing that.
So yeah, we've got just over 30 employees at the firm. I'm the only one in New Orleans, but that's not uncommon. That's not something that we did... We were remote already before the pandemic happened. So people would say, "Well, why did they want to open an office in New Orleans?" And I say, "No, no, that's not how it works." It's not that Ritholtz says we want to open an office in a city and then they go find the adviser. They find the advisor, and then they have a presence in that city because the advisor is a good fit. So I've been working remotely, but prior to the pandemic, it's really easy to just fly up to New York or see each other at conferences. So I feel very connected to the team.
I think the firm has doubled in AUM since I've been here in two-and-a-half years. That's pretty crazy.
Michael: So what's the size of the firm now?
Blair: Yeah, our last ADV was about $1.3 billion. And that was in May. I think it was around $800 million – is what I read recently on RIA Biz when I joined – the article about me joining the firm. So that's pretty cool. I think there's been 10 employees joining behind me. So we were around 20 employees when I joined, now we're over 30. So that's been cool to see. Basically, everybody that works at Ritholtz Wealth Management is a rockstar at what they do. It's unlike anything that I think exists hardly anywhere. And I feel really just lucky to be a part of it where I know that if I have a question about a specific topic, there's somebody at my firm who's an expert in that or has really done a deep dive into it. That's the other thing is going from being the only person doing the financial plans at a firm to being amongst a huge team of financial planners.
And with the volume that we're doing, we're seeing some – such a wider swath of financial planning issues – that if you throw up a question on our advisor channel on Slack, there's somebody who's already encountered that at the firm and can help you out. That's really fun too, being a part of a team of financial planners who are really operating at the top of our games.
Michael: Yeah, yeah. And so, I think you said as well just your client base has gone from basically, zero when you got started – a little bit from former Ignite's clients that that may have followed – up to $90 million in two-and-a-half years. So just where are all these clients coming from for Blair, the one who said she doesn't like prospecting?
Blair: Well, I don't have to do the prospecting because they're reading our blogs. We have seven blogs. The big ones are obviously Barry Ritholtz, "The Big Picture," and Josh Brown of "The Reformed Broker." But so many people read Ben Carlson and Michael Badnarik. And I even blog. So they're reading our blogs, they're seeing Josh on CNBC and googling us and going to our website. They're hearing Barry on Masters in Business on "Bloomberg Radio," and googling him. Now we have a YouTube channel, "The Compound," that just crossed 50,000 subscribers. So they go into one of these sites and they say, "I want to talk to an advisor," and they fill out a little form with their name and a little bit about themselves and how they heard about us. And we get, I think it's over 200 of those a month now. And there are 9 or 10 of us who those names are divvied up amongst, and we reach out to these people. And many of them become clients. And that's how it's happened. It's like an advisor's dream. You don't have to get the client.
Michael: That whole blogging, CNBC, television, and podcasting, YouTube media machine is driving a regular lead flow that just gives opportunities for all the advisors at the firm in essence.
Blair: Yes. And that's the genesis of the firm. The story is that Barry met Josh at a bloggers conference. Barry knew people were already asking him, "What should I do with my money?" but he wasn't an advisor, Josh was an advisor. And they started working together, and their two audiences drove the growth of the firm since day one. And now that there are more and more of us doing more and more content, it's almost like it's just gaining momentum.
Michael: Well, it's funny, just even as you're talking about numbers. For folks who want to go back and listen, we had Josh Brown on the podcast, back in the early days of the podcast in early 2017. Actually, episode 17. So if you go to kitces.com/17, you can hear Josh talk about the story of the firm. But I think back then when they had come on, it was 13 people at the firm and $500 million under management. And that's where they were in early 2017. So just sort of reflecting on that overall, that's now almost 4 full years from $500 million to $1.3 billion. And from, I think they were 12 or 13 people on the team then to 30 today.
As you had said earlier, just the power and opportunities that come when you're at a firm that's growing, all the dynamics are different when you're at a firm that's growing than one where it's not growing much and everybody is struggling to divvy up a very limited pie trying to figure out how to get the growth machine going that is really difficult to get going because there's not enough time and dollars to reinvest to make that happen.
Blair: Yeah, yeah. And it's pretty crazy to hear those numbers in hindsight because I remember listening to your interview with Josh, probably around the same time I listened to the interview of yourself when Alan interviewed you that time.
Michael: Yeah, right around the same time. Josh was Episode 17 and mine was Episode 20. So just literally, less than a month apart.
Blair: Yeah. I listened to both of those around the same time that I was contemplating, what am I going to do with my career? So I guess things just have a way of working out if you just keep trying at the same career path for long enough. It's crazy always knowing that I had the talent, but never quite getting there was frustrating. But if I hadn't made all the strange moves that I had made, I probably wouldn't have ended up where I ended up, which is exactly where I'm supposed to be. So I guess it's serendipitous in a way that I finally came home to the band of misfits where I am today.
Michael: So then, so what surprised you the most about just this journey of trying to find your own career path and the right place to be in and build?
What Surprised Blair The Most And The Low Point On Her Journey [01:19:58]
Blair: Yeah, a couple of things. Being a top student in school always – the biggest shocker to me coming out of school was that your straight A's don't mean you're going to be successful. That was like a real reality moment for me. It doesn't mean that you're going to have a successful career if you're a good student. It's going to take a lot of other skills and grit. And I always think about my career, I always say I was clawing my way out of a hole, essentially.
However, the process of doing that made me into the person I was supposed to become. I actually was attending a virtual women's summit earlier this month, or maybe last month, and Oprah was one of the speakers and she spoke about Eckhart Tolle, his philosophy that the experience you receive is the experience that you need to become who you're supposed to become. So whatever I obviously needed to run the gauntlet or get a few bumps and bruises along the way to make me into the advisor and the professional that I needed to be. I guess I was a pretty rough diamond in the beginning and I needed some polishing.
The other thing that was a major shifting point in my career is not only that layoff to getting picked up by the RIA position, but that is the time in my life that I shifted from pessimism to optimism. And it was really – I credit Michael Goodman, with teaching me the power of optimism. Having that mindset, the moment in my life where I decided to stop being a pessimist about things is really where my career – it did start to take off, even though there were some little bumps along the road from there, just because on a personal level, I moved cities and I had to reestablish myself in a new town. That moment that I became an optimist is really where everything started turning around for me.
Michael: So what changed? Like you just woke up one morning and said, "I'm just going to be more optimistic now?" How does that work?
Blair: Yeah, it's really hard to describe. I let go of all of the – I've said it a couple of times – the chips on my shoulder, the attitude I had about my career not getting off to the start that I wanted it to be, and settling down and realizing that yes, I'm in a hurry to get somewhere but there's learning to be done along the way. And that this has been official. And I just became at peace with that for the first time, instead of saying, why am I not already the CEO of a Fortune 500 company? Settling down and saying, “Wait a minute, it's a journey...”
Michael: Don't they know my grades?
Blair: Yeah, exactly. It's like, I don't understand why I'm not going straight to the top here. And I stopped comparing myself to others. Like I mentioned the Goldman Sachs boyfriend who was making double than me. And that bothered me. And I finally just let go of all that and said, no, this is me. This is who I am. This is where I'm supposed to be. And somehow this is all going to work out. And my shift in attitude and mindset changed from that moment. And I still had lots of adversity to go through from there. But I did it with the optimistic mindset. It's not an easy shift. I can't really tell you how I did it. But I guess maybe just having the knowledge that optimism was the better path helped me click over onto the other side of my brain.
Michael: And do you relapse occasionally? Or was it just like once the mindset changed that was that and now you're on a different path?
Blair: I have not had a relapse in that. I started going in the other direction in life, and I haven't stopped.
Michael: So what was the low point for you on the journey?
Blair: You would think it would be starting my own RIA from scratch and working at a restaurant as a cocktail waitress until midnight. And the other part of that story, by the way, is that there was a group of us, and Alan Moore was part of it, and he was the ringleader, where we were paid to sit and be experts for the website ehow.com...
Michael: Yes, I remember that. Yes.
Blair: We would sit at our computers and wait for the ding and answer a question if somebody paid to ask an expert. And so I would go on these like three-hour shifts where I literally could not leave my computer, but nothing might happen, and that's when I blogged a lot. But nothing might happen for three hours. But if it did...
Michael: It was sort of like freelance on-demand financial advice. So if a consumer went to eHow and said I have a question, I want to talk to an advisor right now, you got paid, but as memory serves, like actually pretty decent money to answer their financial questions over the internet.
Blair: Yeah, we did that for a little while, and then I left before it ended. I don't know how it ended. I don't think it was very successful for eHow. But you would think that working multiple jobs, not having any AUM be the low point.
And I would also like to say, the beginning, starting out as a sales assistant, or being that branch analyst where I thought I'd finally moved up, but then the financial crisis hit and I didn't get more than 10% of the bonus that my predecessor had gotten in the year prior, and all those things. But now that I'm looking back on those times, mid-20s, Manhattan, going out and having wholesalers buy me sushi at Nobu and steak at Del Frisco's. There was a time, my friend always reminds me, that I looked at her and I said, with a pouty face like, "Del Frisco's again?"
But those were some of the best times of my life. And I'm so happy I have them. So there were a lot of low points. And there were times when I just would become despondent. I don't want to sound so full of myself. But like, why am I so talented and I can't make it right? Why am I not having the success that I should have when I know I should have it?
But every point that I would say was a low point, when I look back at it now, I can see the joy and all of those moments as well. So that's a non-answer for you. But that's really how I feel about it.
Michael: And so, I was wondering like, as you look back, and sort of this question that you struggled with, like, I'm very smart, I'm very talented, I don't feel like I'm making it the way that I wanted to be or expected to be or I’m not having the success. How do you answer that question now, looking back?
Blair: The question of why wasn't I having success?
Michael: Yeah, or like, why wasn't it going as you wanted or expected or hoped?
Blair: I think it's just a series of a cascade of luck. It's like the movie, "Sliding Doors." Or the books where you could choose one way and not the other. Right?
Michael: Yes, "Choose Your Own Adventure" books.
Blair: Yeah, it's like I had to go on this path to get where I am. But somewhere along the way, like the decision to hurry up and graduate in December meant that I wasn't really at college in the prime recruiting phases. Majoring in finance at the University of Georgia, which is a fabulous southern state University, but really the strings for getting a job were different majors. To wanting to be an investment banker, but probably the people interviewing me realized that I was not going to be a good person to sit in the office 100 hours a week and do spreadsheets. And luckily, they saw the wisdom in that, but I didn't. I didn't have a connection into the business. I'm from the south, I'm not from the Wall Street area.
It's just a whole conglomeration of all of those things. And I do come back to the president of the bank telling me to apply for a teller position. And I really do think that he wouldn't have told a young man that. I do think that gender played a role. The world has changed a lot in 20 years. When I was starting my career, people who were nearing retirement are people that worked in a very different world before women really entered the workforce.
So I think that I started three or four steps back from where I should have been for all of those reasons combined. But there was sort of a higher purpose to all of it because if I hadn't learned how to open all the paperwork required to open a trust account I could never have started my own business when I moved to New Orleans. I probably would have had to go back and work at a bank. So everything that happened, happened for a reason. It was just hard to see at the time. And I guess that's just what I had to do to get where I am.
Michael: You said it well. Like the roles and the jobs we have that turn out after the fact to have been really beneficial, even if we didn't necessarily appreciate them at the time. I spent a piece of my career, and I guess what I would probably in retrospect call half-paraplanner, half-client service administrator, like doing all that same paperwork and insurance annuity applications and account opening forms and account transfers and non-account transfers and just living with all the guts of what happens behind the scenes in advisory firms. And while that wasn't what I wanted to do for the long run, I'm very thankful I had that job and spent a period of time doing that because that just anchored me in the reality of how all this stuff works behind the scenes and in how advisory firms get executed that I don't know if I could have otherwise done.
Blair: Yeah. I mentioned that my dad works in a family business, ready mix concrete. And he told me one time when I was younger, "I can't run this business unless I can actually do every job of every employee that I have." And that is true to a certain extent, if you really want to be influential in a business, you have to understand the role that everybody plays and the mechanics of what they do. And I think it's hard to be successful if you don't know that at a certain level.
Michael: So so given all that, and the journey we traveled sometimes is the one that we needed to, even if we didn't realize at the time. As you said, the experience you received is the experience you needed to become who you're supposed to become. So, if you could go back and whisper something in the ear of you 15-plus years ago just getting going at UBS, is there something you wish you could go back and tell yourself then that you know now?
The Advice That Blair Would Have Given Her Younger Self, The Advice That She Has For New Advisors, And How She Defines Success For Herself [01:31:32]
Blair: Yeah. And people tell me anyway, and I didn't want to listen, which is to be patient. I remember an advisor in the UBS office saying, "What are you in such a hurry for? You are on track to have a CFA charter at 27 years old. You are already well on your way." I didn't see it that way. I remember celebrating turning 30 because I finally wasn't that little kid anymore. I've always been in a hurry. I used to get mad when I was a little kid and they would give me the children's menu at the restaurant. So I would say "be patient" because there was a lot of fun to be had. And I did have a lot of fun. But I could have savored it a little bit more, the experience that I was getting at the time and the things I was learning that I didn't realize were going to be beneficial later down the road. So just to settle back and be patient.
Michael: So, any other advice that you would give other young advisors just getting started and coming into the industry today and trying to figure out their path and where they should go, or at least where they should go start and what the first step is, and for all those December grads who might be listening to this shortly before they graduate in the next month?
Blair: Yeah, take some electives next semester.
Michael: And push your graduation to the spring semester.
Blair: Yeah. Don't do that. And just understand that careers are long. And look for a person who can hire you, who you can learn from. And soak it all in. Go with the firm or the people that you think can teach you the most. And just be willing to do whatever task or role is given to you with a smile on your face. What you learn in school – now they have the financial planning degrees, which I think is amazing. I'm just so glad that that exists now. But the things you learn on the books are totally different than the application of becoming a professional. And that's an experience that you learn physically by doing. And so just soak it all in. And if you're passionate about it, it should work out.
Michael: So as we wrap up, this is a podcast about success. And one of the themes that always comes up is just the word success means very different things to different people. And so, as you've noted, you said, I feel like I finally found my home with the band of misfits. How do you define success for yourself at this point?
Blair: Yeah, it's so funny. I used to say; I know I've made it if I can bring my dog to work. And now we all work at home with our dogs who...
Blair: Yeah. By the way, my dog is locked up in the room so that he won't bark if the mailman comes, but for me now, the ability to practice, basically, my vocation. It's not just a job for me. There's no time where I am not a Blair duQuesnay, a financial advisor. Like even on the weekends. Even when I'm sleeping. That can never be divorced from who I am. So my ability to live out my vocation every single day for as long as I want to keep doing it. And then, I now have two kids, to provide them with the education and the experiences that I want them to have growing up. If I can do those two things, that's success for me.
Michael: I love it. I love it. And how fortunate the pandemic helped in making it easier to bring your dog to work?
Blair: Right. I've made it.
Michael: You made it.
Well, thank you so much Blair for joining us on the "Financial Advisor Success" podcast.
Blair: Thank you Michael for having me. I really enjoyed it.
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