My guest for today’s podcast is Marina Hernandez. Marina is an Investment Advisor Representative with Dynamic Wealth Advisors dba Swiss American Wealth Advisors with offices in Philadelphia and Switzerland that specializes in working with cross-border Swiss-American expatriates.
What’s unique about Marina, though, is the way her specialized niche allows her to command sizable financial planning fees, working primarily with otherwise hard-to-work-with next-generation clients, while facing remarkably little competition at all, but focusing on not just cross-border expatriate clients, but specifically, those expatriates going just between the U.S. and Switzerland.
In this episode, we talk in-depth about what makes the niche of cross-border planning for expatriates so unique and so complex, the challenges from potential double-taxation of foreign country retirement accounts that the U.S. doesn’t recognize for favorable tax treatment, how the rising focus on preventing money laundering and foreign tax cheats has created new layers of specialized tax reporting that expatriates must handle or face $10,000 fines from the U.S. government, and why even seemingly simple publicly traded investments that hold a diversified portfolio in a foreign country can create significant additional U.S. tax challenges.
We also talk about how Marina is structuring her advisory business, why she chose to break away from the existing advisory firm to start her own practice, the reason she affiliated with a larger firm, Dynamic Wealth Advisors, to provide her own back-office RIA support and get her access to multiple RIA custodial platforms, the software tool she uses to do financial planning with her expatriate clients, and why despite the fact that her value hinges on solving the especially complex problems her clients face, Marina’s financial planning process is actually very efficient, because her specialization has allowed her to develop repeatable expertise.
Be certain to listen to the end, where Marina shares her journey in finding her cross-border expatriate niche, how her need to handle her own family’s taxes as an expatriate living in London made her aware of the unique complexities for Americans living overseas, how the combination of CFP marks and Enrolled Agent license and her experience on international tax issues meant that she had three job offers out to her within just a few months of joining the Financial Planning Association and network for career opportunities, and why Marina is taking the barbell approach to serving the marketplace with a premium financial planning fee for her most complex clients, but then also offering free financial education classes for cross-border citizens who may also need help and may not be able to afford her premium services.
So whether you’re interested in learning about how Marina became an international tax expert, how she found a career that supported her need for mobility, or why she ultimately decided to partner with another firm, then we hope you enjoy this episode of the Financial Advisor Success podcast.
What You’ll Learn In This Podcast Episode
- How Maria Developed Her Niche Working With Swiss-American Expatriates And What Makes Cross-Border Planning Unique [05:20]
- Why Maria Narrowed Her Focus Down To Two Specific Countries [15:29]
- How Marina’s Firm Partnership Is Structured, Her Firm’s Business Model, And The Fee They Charge [24:56]
- The Public Benefit Education Service That Marina’s Firm Provides [43:11]
- How Marina Became An International Tax Expert [52:07]
- How Marina Made The Switch From Tax-Planning Into More Holistic Financial Planning [01:02:20]
- What Prompted Marina To Join An Existing Firm And Then Later Decide To Go Out On Her Own [01:09:01]
- How Marina Found Dynamic Wealth Advisors And How Their Relationship Is Structured [01:24:51]
- What Surprised Marina The Most About Building Her Own Advisory Business And The Low Point In Her Journey [01:36:03]
- What Marina Would Have Told Herself When She Was Getting Started, The Advice that She Would Give New Advisors, And How She Defines Success For Herself [01:40:25]
Resources Featured In This Episode:
- Marina Hernandez
- Swiss American Wealth Advisors
- Cross Border Academy
- #FASuccess Ep 158: Leveraging Outsourcers To Go From Employee To Independent Without Building It All Yourself, with Stephanie Bruno
- Dynamic Advisor Solutions
- Temple University CFP Program
- Financial Planning Association (FPA)
- Ashley Murphy, Arete Wealth Strategists
- Global Financial Planning Master Class
- Advisor Growth Community
- #FASuccess Ep 189: Experimenting With Advisor Marketing To Find The (Digital) Formula That Works For You, with Taylor Schulte
- Scaling The Efficiency Of Comprehensive Financial Planning By Creating Repeatable Expertise
- Enrolled Agent
- Gleim Enrolled Agent Exam Prep Class
- Orion Advisor Services
- Between Now and Success with Steve Sanduski
- Salesforce CRM
Michael: Welcome, Marina Hernandez, to the “Financial Advisor Success” podcast.
Marina: Thank you, Michael. It’s great to be here. Thank you for having me.
Michael: I’m really excited about today’s discussion, and what I think is a really interesting niche and focus specialization that you have, working with cross-border clients and, in particular, cross-border clients like Swiss citizens who are living in the U.S. and U.S. citizens who are living in Switzerland, which I think is like, we measure that in the tens of thousands of people, but only the tens of thousands of people out of tens of millions of immigrants and hundreds of millions of people in the country.
And so in this world, I feel like so many of us as financial advisors have this compulsion to make sure that we cast the net wide enough, that we pick a group we’re going after that has big enough base of clients that we can be certain to grow and have a successful practice, and I’m fascinated with firms like yours that specialize down to this realm of, “We work with – not even just cross-border clients and expatriates – but expats just with this one particular country that goes back and forth with the U.S.”, and that you can build an entire practice – an entire specialization – by just getting down to that level of focused specificity and then finding all the opportunity that comes with getting down to that level of specificity.
So, in a world where I feel like there’s so much challenge these days for advisors saying sometimes like, “Okay, I’ve heard I should go after a niche, but I don’t know what niche to go after that’s big enough that I’ll have enough opportunities to be successful,” I’m really excited to hear the journey for you into yours of, “Let’s make a business where we only work with people who are going back and forth between the U.S. and Switzerland.” Yeah, you didn’t even pick a bigger European country! You went after Switzerland.
How Maria Developed Her Niche Working With Swiss-American Expatriates And What Makes Cross-Border Planning Unique [05:20]
Marina: Well, it came about accidentally. I think that’s probably how it works for most people. I jumped into the industry after owning a tax firm for about six years, where I was providing services. I’m an immigrant in the United States, I wasn’t born or raised here. I understood the challenges of living outside your country and how complex our tax system was, so I developed a special fixation on international tax.
When I was in my practice as a tax advisor, I would see really bad things that I had to report on the tax returns – they were recommendations from their financial advisors that made me curious about what financial advisors do. So, I eventually became aware of the CFP program, and I became a Certified Financial Planner. I wanted to start in the industry, and because I had zero experience in it – because I didn’t grow up here – I didn’t really know the industry. I felt that what was being taught in the curriculum in the Certified Financial Planner, that’s the way it was. It sounds a lot like an independent advisor, so I imagined everybody was an independent advisor. So, that’s how I felt it was, and because I was in international tax, it felt natural to do something that had to do with the U.S. cross-border.
So, cross-border was – one of the borders was the U.S. and another one was a different country. But initially, I felt that it didn’t have to be a specific other country. So, it started with any other country. I was born and raised in Argentina, so a natural area was U.S./Argentina cross-border, but there’s very few Argentinians in the United States, so it’s not a very big market there. I am of Spanish descent. My father is Spanish, so U.S./Spain was another one. There are more Americans who go to Spain to retire.
The U.S./Switzerland came about because I became a member of FPA, the Financial Planning Association as I was studying. It was a recommendation of one of my professors when I was doing the CFP certification. He recommended that we join the Financial Planning Association and start reading the listserv with all the questions so that it will make us aware of what the issues were.
What I noticed is that Certified Financial Planners were not very good at tax, in general. People were trying to be helpful when others had questions, especially in cross-border international tax, and they would give answers that maybe didn’t really contemplate everything. Eventually, what happened is that a few Certified Financial Planners would read my answers and say, “Oh, she really knows her stuff. I am in the cross-border niche, and I need somebody on my team with that set of skills.”
So, I started receiving calls from different financial advisory firms that were in the cross-border niche, and I ended up joining a firm that specialized in U.S./Switzerland. So, that’s why it’s U.S./Switzerland. I have no natural connection otherwise to that niche. It’s just that my first job after doing freelance work for a few other cross-border firms was at this firm, and for almost six years I was working exclusively with Americans living in Switzerland, and with Swiss nationals living in the U.S.
It was very clear that I had a cultural affinity with the people that make the choice, that I really enjoy what I was doing, and that’s why I started studying the Swiss side of things and then becoming really, really good and going really, really deep in the more common issues that appear in that niche. That’s why when I decided to leave and start my own firm, I decided that the way I could contribute the most value to client was to continue to work in that specific niche where I had developed that expertise that allowed me to solve problems at a level that other advisors who were more general couldn’t do.
Michael: So, can you talk about that a little bit further? What does it mean to have this cross-border expertise or cross-border expertise down to a particular country? Not that we’re necessarily trying to do a continuing education cross-section on international tax law or anything, but just… All right, I think the challenge for some of us advisors, if we don’t work in this realm already – I’m not even sure a lot of us know all the things that you deal with on a regular basis that makes your practice so different and unique, because it’s so different from what we do that these may not even be issues on our radar screen in the first place.
So, can you maybe share a little of what it is that makes cross-border planning or cross-border tax planning – I don’t even know if it’s tax-centric or just planning in general. What is it that makes your work so different and unique?
Marina: So, what it is, is what’s very unique about the United States. I became aware that, not as a U.S. immigrant; I married an American, and then I became a U.S. person. When I was married to this American, and I was a U.S. person, we moved to London to work for two years as a family, and so I was a U.S. expat under that situation.
What I found out that I wasn’t aware of at the time – this was 2002 and 2003 when this happened – was that the United States continued to tax its citizens and other green card holders as if they were still living in the U.S. No other country does that. No other country taxes its citizens based on citizenship. They tax – there’s the residence – based on the residency. There are some exceptions.
So, what’s unique as an advisor, when you are helping clients in this situation, is that you need to understand what is the base, because generally speaking, the foreign country will have the first right of taxation, that anything that is sourced to this country. So, if they’re working there, their compensation, their wages, would be sourced to the country where the American lives. And then the United States comes and imposes a second layer of tax, so you have a risk of double taxation, you have all kinds of issues of countries taxing people differently.
When we lived in England, for example, a challenge was that England has a fiscal year for taxes. It goes from April, 6th, to April, 5th, of every year, and the U.S. has a calendar year for taxes. So your taxation years even overlap.
Michael: So, yeah, they don’t even line up. It’s not just like, “Okay, I paid this in the UK in 2019, and I paid this in the U.S. in 2019, and then maybe I get a foreign tax credit from the UK to the U.S.” You can’t even line them up because the 2019 U.S. tax year actually spans eight months of the FY 2019 UK tax year and four months of the 2018 UK tax year that spilled over.
Marina: Exactly, and so the things don’t even match. You’re looking at different things on the return, different income, tax on different income from different periods. It creates all sorts of challenges. At the time, we had three very young children. This career is my fourth career, so I am a career changer. I was working in corporate finance at the time, Coca-Cola was my employer. I have three very young children, and I was absolutely miserable, so I ended up quitting my job and becoming a full-time mom for seven years.
But my entire life I had worked. I didn’t know what it was like to be a stay-at-home parent, so I had to do other things such as being with little kids. My kids were three, one-and-a-half, and two months old when that happened, so it was a bit of a challenge. I also needed something more adult to look into, and that’s when I started looking into our taxes because my husband was so frustrated and didn’t understand what this is.
By the way, my husband is an international tax attorney. It’s just that he does corporate tax. He doesn’t do individual taxes. So, he says, “I don’t even understand what this is. This is super complicated, so frustrating.” So, for me, it started as a hobby back in the early 2000s. Once I learned, and I understood some of the issues, that’s also when internet groups for experts were starting. It was dial-up, back in 2002, in England, so it wasn’t very dynamic. But I started to be able to answer questions of other people, and so that’s when I understood that I wasn’t alone in having these problems, and how valuable to have somebody who can help you would be.
So, that’s really what’s unique. And then when you expand it to financial planning, you not only have the issue of the two tax systems, you also have the issue of the two financial systems. So, you have different securities laws; you have different compliance rules; you have different investment products that are offered in each country that the other country may or may not recognize. So, you have all kinds of conflicts that make the job exponentially more complicated than it is for somebody that’s only dealing with purely domestic U.S. issues.
Michael: I guess that’s part of the reason as well, that you end out picking a particular country to do cross border work with because each possible pairing of going from Country A to Country B creates its own issues where if you’re a U.S./UK expat you’ve got this, the years don’t line up thing, but you may not have that issue in other countries that still use a calendar year as their tax year, but they’ll have whatever their other peculiar issues are that are specific to that country.
So you just get so much specific stuff between particular Country A and particular Country B, that that’s part of what leads you to, “I’m just going to specifically focus on this particular cross-border combination, and not even just expatriate clients in general.”
Why Maria Narrowed Her Focus Down To Two Specific Countries [15:29]
Marina: Absolutely. Yes, it’s exactly what you said. For example, if we stay with the UK, not only do you need to understand the legal and tax system and financial system of the country, you also need to understand the tax treaties. So, with the UK, you have the non-matching tax years, but you do have very comprehensive tax treaties between the UK and the U.S. that mitigate a lot of the issues that you do not have when you’re dealing with countries that do not have tax treaties with the U.S., or that have treaties that are not as comprehensive as the UK/U.S. treaty.
Let me give you an example that is typical. When you go and work in a foreign country, you have a foreign employer. That country is going to have its own retirement plans, its own retirement system that is written under the tax laws in the same manner that we have 401(k)s, for example, and IRAs in the U.S., 403(b)s. All those are sections of the code of our tax code. Well, the equivalent of that exists in every country, and so the foreign employer will set up a retirement account for the American working in the country following their own rules. The U.S. gives special privileges to U.S. retirement accounts like 401(k)s that they’re tax-deferred, for example, and you get a deduction for the contributions, but they have to meet the requirements of our own tax laws.
Obviously, foreign retirement plans are not going to care one bit about the U.S. tax law requirements, so they don’t meet them. Therefore, the default is that your contributions to their foreign pension are not going to be deductible on your U.S. tax return, that the earnings in the foreign pension are not going to be deferred on your U.S. tax return. That creates all kinds of issues.
If you have a tax treaty, some of those issues may be mitigated. If you really understand the tax laws and see how you can apply them in a way to minimize the negative impact, you can do a good job to help your clients. But the absence of a tax treaty – and many times with the tax treaties have very poor provisions for retirement accounts – you can have really serious issues with clients, that they feel that there’s no tax-advantaged way for them to save for retirement because the U.S. denies them that by not recognizing the foreign retirement accounts as qualified – what’s equivalent to U.S. qualified plans.
Michael: Interesting. So, you really still get into a lot of, I guess, what I would call classic financial planning issues, right? Retirement planning, insurance, investments, tax. It’s a lot of the same things, it’s just all the additional layers of complexity of Country B may not have the same structures and rules and products and offerings that the U.S. has. And you get, literally, the complications of being a citizen in A that owns things in Country B when A may not recognize the stuff that’s going on in Country B, and so now we get into, is there a tax treaty? How does that tax treaty work?
If there’s not a tax treaty, what the heck is the consequence when my foreign country employer adds money to their equivalent of a tax-deferred profit-sharing plan but the U.S. doesn’t recognize it, and so now my money is tied up in the foreign country’s retirement plan but I still have to pay taxes on it in U.S. dollars, which I may not have the cash for, because they put the money in the foreign retirement plan? Now I’ve got this snowball effect of problems that are coming up of, “Okay, I really think I need to find a financial advisor who knows how this stuff works.”
Marina: Imagine trying to help clients in the combinations with that type of problems with every country. You can see how it can get enormous, the amount of knowledge that you have to have very quickly. But if you do not choose a country to work with and specialize in – and I saw this mostly from the tax world, because I was an international tax first – so I had tax preparation clients that were Americans living in any country in the world and they would say, “I have a…” and describe some foreign thing, so wrong foreign word that sometimes was impossible to pronounce. “How do I record that in the U.S.?” I’m like, “I don’t even know what that is. Let me research this.”
So, is it an insurance policy? Is it a pension? Is it a brokerage account? Is it a type of entity? What is it? And you have to spend maybe tens of hours just researching, trying to figure out what the thing is. And many times it doesn’t fit exactly with anything in the U.S., so you’re not even sure after doing a lot of research, what would be the most similar U.S. equivalent classification for that particular item. If you have to be doing that with every possible type of product that is sold anywhere in the world, you can see how difficult it would be to have that type of knowledge.
So, if you don’t have it and you’re working with clients everywhere, then you spend a ton of time doing research just to be able to answer a basic question. Whether somebody comes to me now with a Swiss product, I know immediately what it is. I don’t have to go and do the research to find out what it is. I also know immediately what the issues are that an American with that product will have.
Michael: Which makes an interesting point to me, around the powerful efficiency you start getting when you’ve got particularly this niche specialization where I feel like there is a finite body of knowledge to learn, right? At some point, you’ve pretty much seen almost all the usual things that come up for U.S./Swiss cross-border expatriates. Pretty much anything that comes in is old hat and you’ve learned it and know how to deal with it, so at some point, you just get to a level of, okay, almost any advisor, “could” deal with this client, but it’ll take them 10 or 20 or 30 hours to figure out what you can literally just answer in five minutes, because this is the 17th client you’ve seen that has this problem, and you already know exactly what to do and how it works.
So, you can just literally serve them cheaper and more effectively. Not that you charge less, you can charge a lot more, but it’s going to be two hours at your high billable rate instead of someone else’s 20 hours at some other rate, which I would think means eventually, you just end up with the sheer cost advantage in being able to serve the clients in your niche as well as just the depth of expertise and the rightness of answers, because you’ve done it enough times so you’ve probably really, really researched it.
Marina: What you can do is you can build a more efficient practice. If you build a more efficient practice, then you can have more clients, you can serve more clients, and not only can you serve more clients, you can serve them better, so you can generate more value for the clients. So, for the clients, then it becomes obvious that you are the advisor that they need to go to if there’s a problem between the U.S. and Switzerland. That’s where my aspiration is. If somebody has a U.S./Swiss cross-border issue, they’re going to say the person I need to talk to, the one who can help me, is Marina. So, I spend all my time developing that expertise.
Another challenge, Michael, when you’re researching foreign products is that many times the information is in a foreign language. If you don’t speak the language, you cannot even find information about it. It’s very difficult. So, in Switzerland, they speak three languages, they’re supposed to be four, but I haven’t met a single person that speaks the fourth language. But most of it is German, so the written is German-German, but they speak Swiss-German orally. I don’t speak a word of Swiss-German. They also speak French and they speak Italian.
I can read and understand documents in French and Italian, because I studied French for five years when I was young, and it’s very similar to Spanish, which is my native language, and Italian because everybody in Argentina is of Italian descent, so you end up picking up on it. Once you know French and Spanish, you can pick up a lot of things and make sense if they’re written, right? In the passive sense, not in the active sense. I will never pretend that I can speak Italian, no way.
But if you don’t speak any foreign language, you cannot do it. That brings me to another point. In my business, I have a partner who’s Swiss, and he is a native Swiss-German speaker. He is the person that now can go and do the research on anything that goes on that is on the Swiss side. Also, when you’re Swiss, you learn to speak at least one other of the official languages in Switzerland. So, he can also do research in French. That also gives us another advantage.
So, when you are only speaking English, it’s going to be limited to how much you can really learn about the other side because it’s not going to be translated into English for your convenience.
Michael: So, how does this work, having our compatriot on the other side who is Swiss? Is that literally like, there is joint ownership of the firm where you own part of it and your Swiss compatriot owns part of it? Or is this just you’ve got a U.S. firm, the other person has a Swiss firm, and you just cross-refer clients and collaborate with each other, but you’ve got your firm and they’ve got their firm?
How Marina’s Firm Partnership Is Structured, Her Firm’s Business Model, And The Fees They Charge [24:56]
Marina: This is part of what I do as my job, so when I had to do it for myself, I said, “Oh, this is good. Now I can apply my own knowledge!”
Michael: Because there is probably a good multinational corporation tax research question, here.
Marina: Exactly. So, the way we do this is, he has his own entity in Switzerland, and I have my own in the U.S., and then we have an operating agreement between the two of us. But our clients – we use the same DBA, which is Swiss American Wealth Advisors – and every client of Swiss American Wealth Advisors is a client of our business. So, we don’t have his clients and my clients, they’re all our clients.
One of the things that we wanted to make sure to do is that I had to provide a firm that works for the clients, and not a specific individual being the advisor for the client. Because the reason I partner with my business partner – his name is Jeff, by the way, Jeff Haindl – is because he has a set of skills that are very different from mine, completely complementary. So, I come from the tax world and he comes from the investment world. So, I’m an Enrolled Agent and a Certified Financial Planner, and I have an accounting degree, and I have an MBA in corporate finance.
So, my knowledge is very business- and tax-based. He is a CFA, so he is the person that really can understand and analyze securities, and help build the portfolios, understand how to construct portfolios, how the different asset classes in the portfolio will interact, how can we best achieve the goals for the clients. That is something that I cannot do anywhere near as well as him. He has decades of experience doing that.
So, us working together made a lot of sense because he has a superpower, which is he could speak Swiss-German, which is really convenient when you have to solve Swiss issues with clients, that I will never have. No matter how hard I work, I will never be a Swiss-German speaker. It’s an impossible language. But also the fact that he’s on the ground in Switzerland, and he can develop a network there, and that he has skills that are very complementary, it allows us to serve the clients so much better than even if I try to, even in my own niche, if I try to do it completely on my own.
Michael: Interesting. So functionally, I realize it’s technically two entities with a crossover operating agreement, but it sounds like you treat clients as clients of the firm. Does that mean you effectively run like an ensemble style practice, where the dollars go into one pool, and you both get paid your salaries and profits out of the pool? Or is it still sort of Marina has got Marina’s clients on this side, and Jeff’s got Jeff’s clients on that side?
Marina: So no, the clients are the clients of the firm, and we have a – it’s like an ensemble. So, the way you’re describing is like an ensemble. We just started because we started in July, so we’re in November, so this is very recent. So far, we’re paying all the startup expenses that we haven’t had to deal with in practice, how we’re going to be making the distributions because that hasn’t happened yet. But the clients are all of our clients. We pay all of the expenses. Everything is U.S.-based for the most part, so all the fees come from the U.S. This is something that we’ll probably want to touch on later on, but we are affiliated with Dynamic Wealth Advisors, and that’s a really interesting story that might be worth talking about. It’s a U.S. SEC-registered RIA from Phoenix, Arizona.
So, we’re investment advisor representatives in that firm, and the clients, when they sign the agreements, they sign it with me as the investment advisor representative and Dynamic Wealth Advisors as the RIA. So everything flows, first to Dynamic Wealth Advisors, then to my entity in the U.S., and then all the expenses come from the U.S., and then we split it on the other end with the Swiss entity.
Michael: And so that – the operating agreement piece – is what pulls U.S.-based dollars and income over to the Swiss side for Jeff?
Michael: Exactly, yes. So, Jeff really has to trust me that I’m going to honor the operating agreement. It requires a lot of trust also to operate in the cross-border world.
Michael: I do want to come back to the setup structure and more about Dynamic Wealth Advisors. But help me understand how the business model works. Just how do you charge clients? Is this still an assets under management style structure where you’re charging anyone fees for clients with a certain level of affluence, and just you happen to work with cross-border clients and give them a whole bunch of additional cross-border tax and other advice as part of the holistic relationship?
Or is this more of a pay-for-time, hourly style structure where you’ve got this deep expertise around taxes and other cross-border issues, and they come in by however many hours of your time it takes to get to the answer to whatever challenges they’re facing? How does the business model work in this structure, particularly when dollars may be in multiple different countries?
Marina: So, we do not do hourly financial planning. It’s just too much complexity on the admin side for that to make it work financially for us. So, for people who need help and have maybe a limited problem, there’s a public benefit arm that we do where we provide free financial education. So, we solve it on that end.
With clients, what we have is, because we’re financial planning-centric, so everything starts with…we consider ourselves wealth advisors, so everything is based on looking on the financial planning first. And then how we do investment management is how it ties to the overall picture of all the different puzzle pieces that the client has all over the world.
So, we have three levels of service, and in order to account for the fact that we have to do very detailed planning work that is time-consuming and difficult, we have a minimum annual fee. That minimum annual fee is tied to an AUM fee. So, the clients would pay the minimum annual fee or the AUM fee, whichever is higher. That allows us to serve clients that have a lot of complex financial planning needs and may not have any assets, or may have very limited assets that we can manage. Because that can happen when you have clients who live overseas.
For example, in Switzerland, the percentage of the wages that goes to the mandatory occupational pension, which is the equivalent of the 401(k) is mandatory, and the minimum contributions that are mandatory is a very high percentage of the salary compared to the U.S. So, many times, clients don’t even have the ability to save much outside of that. And we cannot manage those accounts because they have to follow Swiss rules and are super conservative. That has to be managed by the trust fund that was created by the employer, and so sometimes there are no assets.
We also work with a lot of millennials. We like to work with millennials and Gen X. Although we do have older clients, the majority of our clients tend to be younger, that’s when they move around. Relocation tends to be one of the reasons why we get the most referrals, or the most people reaching out to us because they’re leaving the U.S. to go to Switzerland or they’ve reversed. That’s the triggering event for many of them. So, we needed to have a way to serve them even when they didn’t have assets for us to manage, but that we are also compensated for the time and for the value that we are providing with our advice here in that transition.
Michael: So, what do you end up setting as a minimum fee? What do you have to put that level at just to make it work for the firm, given the amount of complexity that’s involved?
Marina: We have three levels of service. The lowest, we call it ‘Young Professional’, and the minimum fee is $6,000 a year. Then we have a ‘Professional Family’ service level. The ‘Young Professional’ is mostly for single people who are employed. So they have the cross-border complexity. For them, it’s absolutely complex and overwhelming. But for us, they’re the easiest problems to solve, because they’re very standard. We can deliver a ton of value without having to charge a lot in fees to the clients because we have a system in place that allows us to do that very efficiently.
The moment that you have a family and now you’re starting to add another spouse with issues, and potentially assets, in multiple countries, it becomes so complex. So, that level of service, which is called ‘Professional Family’, has a $12,000 minimum fee.
And then the final level of service that we provide, which is my favorite, and which is this – I think, is the one where we can provide the most value, we call it ‘Virtual Family Office’. There, we deal with more complex issues. Our clients need coordination with many different types of advisors in many different countries, because either they’re entrepreneurs, so they have a cross-border business, like we are, or because they have trust structures that they have to deal with.
An interesting thing about Switzerland is that it doesn’t have its own trust laws, which people find fascinating. There’s no such thing as a Swiss trust. So, how does Switzerland deal with the U.S. trust, which is a very common structure that you’d find in U.S. planning for estate purposes and for family purposes? So, that creates a lot of complexity, and you really need to have very specialized knowledge to deal with that.
And in other cases, sometimes we have multi-generational families that we advise. So, we have families that have, maybe, adult children that need advice who are also cross-border, or they have parents. We’re dealing with multiple generations, so it’s a lot more complex. That minimum fee for that is $20,000. What we’re doing there is we’re basically taking away the burden of the coordination, because we are the ones who can speak the language that the individual advisors speak and understand what they’re saying, and communicate what’s important to the client.
We also have the technical knowledge to understand, and we see the entirety of the client’s situation where the different advisors would only see a piece. When you only see a piece of the puzzle, you might be giving advice that makes sense for your piece, but it might not fit well with the other piece. So, we are the ones that can detect those types of situations and help make everything work seamlessly.
Michael: I’m struck by this, as well, just on the most basic level. When we talk about it’s so hard to work with “young people,” which in our industry is basically like anybody under 50, otherwise known as Gen X and Gen Y, we tend to talk about Gen X and Gen Y in terms of well, maybe they can use a robo-advisor, and the robo-advisor can get their $17 a month of investment fees on a small account or whatever it comes out to be.
I’m fascinated that you’ve got this model that starts at $6,000 a year for a single younger client, $12,000 for a couple with a family. You’re talking about a pretty darn healthy level of fees and revenue per client for working with young people or working with young professionals.
Marina: Right, the one thing that happens for a young professional who goes overseas is that they cannot use a robo-advisor because they have international accounts, and they’re not licensed to provide services to Americans living abroad. So, that’s not a possibility. So then, they have to have their retail accounts and do their own investment management, which for some people, that is terrifying, and they don’t want to do it. Other people like doing it, but then you have the issues of the compliance laws and securities laws, and the client protection laws in Europe that might limit what you can do at the retail level when you manage your own account.
So, to give an example, Switzerland is not part of the European Union, so luckily, we don’t have to deal with this problem. But what happens in the European Union is that they have regulations that are AIFMD, and PRIIPs, and UCITS, and all these things that basically don’t permit you to invest in foreign funds. So, if you’re an American living in the EU, the EU may not allow you to have a U.S. investment account and invest in U.S. mutual funds or ETFs. Well, you can never invest in U.S. mutual funds because of other issues. So, even the U.S. won’t allow you to do that.
So, then you try to say, “I’m living in France, and I’m going to open a Schwab account and do my own investments.” No, you live in France, it’s not available to you. And then France says, “You can only invest in French funds.” Well, French funds have a problem for an American, because they’re considered passive foreign investment companies, PFIC. They’re taxed extremely punitively, and there’s nothing you can do about mitigating that.
There are some choices, some elections, that you can do to reduce the cost of that, but what you do is mitigate tax inefficiency, but it’s still going to be tax-inefficient. And so it ends up being a very costly way to build wealth. So, your ability to build wealth gets greatly diminished by all the fees and by all the complexities and other restrictions.
Michael: Which again, just gets back to this is why this is often the niche, not just of working with international expatriates, but literally down to particular country pairings, from A to B, and all the crazy things that happen with that specific overlap.
Marina: Yeah, exactly.
Michael: I guess the other notable thing with this is, well, when you talk, particularly about younger professionals that may be expatriates. I’m sure there are some subset of people that just decide, “Hey, I want to live in a foreign country for a period of time. I’ll try to figure out how to go there, get a work visa, and work there.” But I would imagine, in practice, that you’re working with a lot of people who are at some large corporation that has an international presence that says, “Hey, you’re going to get a stint to be posted in our office, overseas and in Switzerland, in the country of choice.”
Corporations generally don’t send their entry-level employees into overseas expatriate jobs. It tends to be the higher levels of expertise, the higher levels of leadership, in essence, the higher-paying jobs. So I would imagine, as well, that just the nature of working with expatriate clients being posted overseas from the U.S. to Switzerland, or from Switzerland to the U.S., they may not necessarily have significant assets because they’re younger and they are still wealth-building, or it’s tied up in the country-specific vehicles that don’t translate to the other side. But they’re probably often pretty healthy income clients where just literally paying $6,000 a year, $12,000 a year out of their income is not necessarily a burdensome fee for their income level.
Marina: That’s right. So, when you have expats, they’re typically going to be – particularly when it’s U.S./Switzerland – it’s going to be IT or biotech, and so the salaries tend to be higher. So, for the clients, the fee generates so much more value than the cost, that it’s just not even a question for them that they see the value. One mistake on your U.S. tax return with an offshore account can result in an automatic penalty of $10,000. So if you have company…
Michael: Just because of all the special foreign account reporting you have to do because the U.S. is trying to find money laundering and all that.
Marina: Exactly. They have all these rules, and they apply to you even if you live abroad. Although that’s not really who they are after. But the rules are written in such a way that they also apply to you, so they’re very scared of making mistakes. And not knowing what to do with their taxes or with their retirement accounts can end up resulting in causing double taxation, so then they’re losing a lot more by not having the advice than any fee that you would charge them.
But going back to your point, something that I wanted to mention that I think is very interesting on the value side, most of our clients are academics. Teachers don’t make a lot of money and so it usually surprises people who expect or assume that we’re going to have super-earning or super-wealthy clients. We do have, obviously, high earners, and we do have clients that are on a path of building significant wealth because of their jobs and their careers, and they tend to be very motivated people.
Also, not only do companies, multinational companies, send the high-level people, they send their best high-level people abroad, so we’re dealing with very, very sharp clients mostly, which makes it, for me, fascinating work. I love working with intelligent people, with people that have a very interesting perspective. But there’s a lot of people who are abroad that don’t have a lot of wealth, but they do have the same level of problems. If you are going to save them $15,000 or $25,000, and that’s going to cost them $6,000 well, obviously, they’re going to do it, because they’re going to be $19,000 ahead.
So, you can provide so much value that the fee that would seem very high or unreasonable for somebody in the U.S. because they can get a lot of information, or maybe online and they’re the kind of person who is willing to take the risk to do it themselves, is not the same perception when you are abroad. Like I said, the most common occupation that we have is international school teachers, and they really see the value and the help that we can provide. Even though their salaries are higher than teachers in the U.S., they’re not what you would consider high earning, by any stretch.
The Public Benefit Education Service That Marina’s Firm Provides [43:11]
Michael: What do you do? What’s that side of the business?
Marina: So, as a lot of immigrants, I didn’t have a lot of money growing up, and I had to make very difficult decisions about money. I have this awareness that usually the people who need the most help feel that they cannot afford it, because of that – because they have to make difficult choices about how they’re going to spend the next dollar, or the next peso, or whatever the currency is. So when I decided that I was going to start my own firm, I wanted to be part of the goal to build a firm that made people’s lives better, and that understood that its role was to provide a benefit, not just to our clients, but also our commitment to our employees, to create a good environment for them, but also for the community in which we operate.
So, there’s that understanding of the need, because I felt that I was in that situation of people who don’t have the financial resources to get help because they cannot afford that, really. It would be very difficult for them to afford the $6,000 fee, for example. That there is something out there.
Pennsylvania has a type of entity that is called Pennsylvania Benefit Companies and Pennsylvania Benefit Corporations. So, the company – if it’s an LLC, a corporation, or an S Corp. So, when I organized the firm, I organized it as the Pennsylvania Benefit Company. So, I made a commitment from the get-go – it’s a voluntary designation; you don’t have to choose it, to not only have a profit motivation and a business, but also to have a motivation to provide a specific public benefit. So, that’s really how that came about.
Michael: So, is that similar to a B Corporation? Which I know some people also talk about in this context.
Marina: Right, so it’s very similar, but in the reverse in the sense that with the B Corps – and I don’t know if other states have the benefit companies. Ours isn’t a B Corp., but it’s a benefit company, or in Pennsylvania has said you can have a benefit corporation. So, with a B Corp, my understanding is that you start your company and you want it to have that certification because you want to be a force for good in the world. So, you want to make a commitment to all your stakeholders, so you seek that designation. You have to demonstrate certain standards – that you’re meeting certain standards – and then you get certified.
Pennsylvania is the reverse. You say that that’s your intention from the get-go, and then you have to file an annual report explaining how you met those standards. So, there’s an independent third party where you measure yourself to see how you’re doing in the industry with respect to the treatment of your employees, to your clients, and your community. Also, you detail what specific public benefits you provide them with and your efforts to provide those. You have to publish that every year, and you have to file it with the Department of State in the state. So, you’ll get it automatically, but you can lose it if you don’t actually do it. The B Corp is the reverse, you have to request it.
Michael: Is there a tax or other benefit to this, or it’s just a thing you put out there to say that you’re doing it for the goodwill of the community?
Marina: There’s no tax benefit. They get taxed exactly the same way as any other type of company. So, you don’t do it for tax benefits; you do it because you want to make the world a little better, so you’re making that commitment that you’re going to pay attention to what benefits all your stakeholders.
Michael: So, in practice, what does the public benefit corporation side of the business do? What are you actually doing in this world of, “We put out free education”?
Marina: We created a separate brand for it, so it’s called The Cross Border Planner and the Cross Border Academy, just because we wanted to make it separate completely from the perception of the people receiving the services, completely separate from the business so that they wouldn’t look like we were trying to do marketing and pretending to provide a public benefit. That’s why it has a completely separate identity.
So, it’s the weekly newsletter that I provide tax advice. Well, I don’t know if I would call it tax advice – tax information, tax education. That’s the weekly newsletter that comes out every Wednesday. I started it right as the pandemic came about and the Cares Act was passed, because unlike much legislation in the U.S. with the care sector, they remember that there are Americans who live abroad and there were benefits that actually were available for Americans abroad.
But I know how difficult it is to get that information if you’re not working with an advisor, so I wanted to put it out there just to make sure that every American that was entitled to an economic impact payment – which is actually what most people refer to as the ‘stimulus check’ – that they received it. There were certain things that they could do, and of course, there are special challenges when you are abroad, and how to receive it as a direct debit instead of a check if you don’t have a U.S. account, how to make sure that you’re qualifying, what are the steps that you need to take, do your children qualify? So, there was a huge opportunity to provide education there. So, that’s the planner’s side, which is the newsletter.
The other side, the Cross Border Academy, what we do is we do free tax and financial education webinars. So, there’s a lot of organizations abroad, for example, the American women’s clubs and other types of clubs of Americans living abroad, that they’re social organizations, just to provide the sense of community, and they also want to provide services to their members. These are all not-for-profit, all these types of groups, so we would offer webinars for the members to educate them about the different issues.
Michael: This reminds me, we had another guest on the podcast just about a month ago, Morgen Rochard. Your approach reminds me of hers as well, that she had what I call the ‘barbell approach’ of, “We’re going to work with a subset of higher income or more affluent clients that pay a pretty sizable minimum fee and just powers the economics of the business. And then that lets us do a broader, wide-reach, high-impact free educational service at the other end so we can reach lots and lots of people who can’t afford the fairly sizable fees that we’ve set for the core clients that we serve.”
But as opposed to what a lot of advisors do, which is to reduce their minimums or regularly compromise their minimums and end up in a deadly middle of serving lots of clients that aren’t necessarily profitable but they’re paying for something, and you’ve got to do the work for them, of separating it out into this barbell approach that you’ve got, or these opposite extremes of, “We’re going to charge a full-size fee for our high-value clients where we deliver a lot of value.” That’s a healthy dollar amount and pays the bills. And that gives us then a little bit of additional flexibility to say, “No, no, we’re not going to scale back our minimums and work with clients that maybe aren’t a good fit, because we just want to help them. We’re going to go all the way to the other extreme and do completely free stuff that has a really wide reach and can help lots and lots of people, but just keep it at the separate opposite end of the barbell from… But here’s the stuff we actually get paid for, and it starts at $6,000 a year.”
Marina: Exactly, yes. Because it’s so tempting to, when somebody says, “Oh, I really need your help, but I cannot pay your fee,” to give a discount. And then you find yourself in a situation where you’re overworked and under-compensated and you say, “I’ll just give it up. I can’t keep doing this.” Whenever I feel I need to have that type of discipline, one of the things that I’ve been trying to get better at is being more disciplined about the goals that I’m trying to achieve. For me, it’s really important to give back to the community. I believe in sharing prosperity, that’s better for everybody.
So, by having the benefit company, we have a specific budget of time and of money to fund that goal. So, how can we best use that time and that money to reach the most people in the most impactful way? And in the meantime, we are completely devoted to our paying clients to provide extraordinary service to them, and so they want to continue to be our clients, and we have a healthy, profitable business that then can fund those initiatives, and it’s a win-win for everybody.
Michael: So, help me understand a little bit more about where all this tax expertise to do all this crazy international tax stuff comes from, in the first place. How do you learn all this stuff to become an international tax expert or U.S./Swiss expatriates international tax expert?
How Marina Became An International Tax Expert [52:07]
Marina: It started because I had the problem. As I mentioned earlier, when we were living in London and I left my job, all of a sudden, I was raising three children, and I didn’t have any intellectual adult pursuit anymore, because I was no longer working for a very demanding multinational company, and so I found myself with free time, so I started researching as a hobby. So, it started as a hobby.
Between 2002 and 2008, I was a full-time mom. But I did a lot of studying on my own time as a hobby because I’m a tax nerd. I’m a nerd, so tax became my thing where I became a nerd. As I mentioned at the beginning earlier on, I think, my husband is an international tax attorney. So, I asked him if I want to get really good at tax – I opened the tax code and it’s like, in Chinese, I don’t understand. It makes reference to all different sections, and nothing makes any sense. It’s incomprehensible. How do I start dissecting this at a really deep level?
So he said, “Oh, you know what? There are these BNA tax portfolios where experts in tax analyze the law and explain it. We’re about to get rid of our 2008 books because we’re buying the 2009 ones, and they always throw them away and shred them, so I’m just going to bring them home.” So, he brought them home and I read the internet and the entire BNA 2008 International Tax Portfolio. And then in 2009, I launched my firm.
One thing that happened – and this is where events and coincidences can be really helpful when you’re at the right place, at the right time. I opened my tax firm to do international tax at the time when the UBS scandal broke out in the U.S., and the first offshore voluntary disclosure program was started at the end of 2009. So, I had all this theoretical knowledge really, that nobody had, even though they had a lot of practice and issues. So, I started working with a lot of international tax attorneys, doing the tax compliance piece for all these people that were coming through the offshore voluntary disclosure programs to become U.S. tax compliant and U.S. foreign offshore reporting compliant.
So, it was on steroids. It was learning on steroids because I had exposure super early to really complex stuff, basically because there wasn’t anybody with that expertise. So, since there was nobody who was an expert, I was at the same level as people who have been in the career for decades. I had a lot of exposure to all kinds of problems, and that allowed me to become really good at international tax a lot faster than it would have been if I had gone through a traditional path.
Michael: Interesting. Interesting. So, you had mentioned that at some point you opened and ran a tax practice as well. When did that part come about?
Marina: I started my tax practice in 2009, and then in September of 2009, we were…the first offshore voluntary disclosure program became available through the IRS; it was created by the IRS. I was a solo tax practitioner; I have my own tax practice, and I mostly did work, as I said, for international tax attorneys.
Then, in mid-2010 – I was living in Miami at the time. In mid-2010 we moved to Philadelphia, and I also had some local clients that I was doing regular taxes for because I wasn’t really thinking of focusing on the international, necessarily. I also wanted to help immigrants. But when I moved, and I left Miami, what happened was that clients tended to be sticky at the time – now it’s a lot less than it was then, to the local tax preparer. So, I ended up transferring the clients, the majority of the clients, to local friends that I had that were in the profession. But the ones who had international issues that were expats didn’t care where I was because they were not local, anyway. So, they were…
Michael: They weren’t local themselves, right.
Marina: Right. So, they wanted to keep working with me. Whether I was in Philadelphia or Miami was irrelevant. It didn’t matter; it didn’t make a difference. So, that’s why I said, “Okay, this is actually good because now I know that this can be location-independent. I don’t care where I am.” My husband works for a Big Four firm, so he would transfer from one office to another, which was a big problem when I was in the corporate finance world, working for companies because I had to beg for a transfer to the branch in the next country or the next state.
Marina: And you always have to start from the bottom of the…once you prove who you are and you start earning the trust, and you have some freedom and some flexibility, you’ve got to start from the bottom again. It was really exhausting. Now I had something that was completely location-independent, and I said, “Oh, this is what I need to do.”
And the technology was getting better that allowed it to do it, right? So, it’s the compromise of the technology allowing that, which was not easy to do before, and the fact that it was a really good fit for my lifestyle.
Michael: Interesting. At some point, I think you picked up an Enrolled Agent designation along the way, as well, right?
Marina: Yes, I did right away. When I decided I was going to open my tax firm, I wanted to be an Enrolled Agent because that allowed me to – if you were an Enrolled Agent, it was easy to obtain the electronic return originator, which is what you need to have in order to be able to file tax returns electronically. So, I decided that it was going to do it. Remember by then, I had been studying tax as a hobby for almost seven years, so I bought the Gleim – I think it was Gleim – preparation thing. I read it and I took my exam, and two months later, I was an Enrolled Agent.
Marina: Yeah, and I had explored before deciding to be an Enrolled Agent, becoming a CPA. I had explored that. But CPAs do a lot more than just tax. They do audit work, and they do a lot of other stuff that I wasn’t interested in at all. The other thing that the CPA has that was a negative for me is the fact that it’s a state license, so if I moved to another state, which was always happening with my husband, I wouldn’t be a CPA anymore in the next state. I would have to start from scratch. Probably by the time that I met all the requirements to be a CPA in that state, I would have to get the CPA license again.
So, when I found out about the Enrolled Agent – which I found out accidentally, by going to an H&R Block to ask, is there a course that I can take to actually prepare tax returns professionally? I went to an H&R Block to ask that question. They said, “Oh, the best designation to do that is Enrolled Agent. But it’s very hard, you won’t be able to do it.” So, I went back home, and I researched that, and I bought a course, and two months later, I was an Enrolled Agent.
And it’s a federal license, so that’s the good thing about it. That if I move to another state, I’m still an Enrolled Agent, because it’s under the Department of the Treasury.
Michael: Interesting. So, this aspect of the fact that you had a more mobile lifestyle because you moved as the family moved, as your husband was getting posted to different job opportunities, the constraint or need to be flexible around location – it sounds like ended up being a pretty material factor for you in this journey, because it impacted everything, from you pursuing an EA because it wasn’t state-specific, liking your international tax clients, because they stuck with you even if you moved and relocated. That really seems to be a common theme that pulls together why you ended out on this particular path.
Marina: Exactly. And also the shared experience, because I was an immigrant and I also had been an expat. Because obviously, we returned from London and we were back in the U.S. But if you think about it not from a U.S. perspective, I’m an expat, because I’m not living in my country of origin. So, from an Argentinian perspective, I’m an expat. From a U.S. perspective, I’m an immigrant.
So having that shared experience allows you to understand the issues better, to put yourself in the shoes of the client with empathy, and to help them from a place of really understanding what the problems were because they are your issues. With my partner, it’s the same thing. My partner in Switzerland, he was actually born in the U.S., but then he grew up in Switzerland and then he came to the U.S. to work and he lived, I think, for nine years in New York City.
There he met his wife, who’s Russian. She’s Russian American, so she’s a U.S. citizen, too. They started having children; they decided that New York City and Wall Street wasn’t really the best environment for the family. They wanted something more family-friendly, and so they moved to Zurich. And that’s where they’ve been, I believe, for the last 10 years.
So, then you also have that experience. Having a multinational family, multilingual family – my children have three passports, I have three passports – it also allows you to better understand what the issues are. And also, because you’ve lived it, it allows you to deal with the complexity, because what happens when you haven’t had the experience and you see, why would I get into something that difficult if there are 300 million potential clients on purely domestic staff, and I don’t have to deal with any of these headaches?
So, you lived it and you understand what it is not to have the help, and so you’re willing to make the extra effort to have the competence to help people in that situation.
Michael: So, then help us understand the next stage of the journey. You’re now running this international tax practice, have found a segment of clients you can serve well, you’ve got the expertise, you got your EA. It’s great because you can serve them no matter where you are and they just follow along, because they’re location-independent, as well. At what point do the CFP marks show up and you start going down this financial planning path?
How Marina Made The Switch From Tax-Planning Into More Holistic Financial Planning [01:02:20]
Marina: When I moved to Philadelphia in 2010, I lost at least half of my clients because they were in Miami. So, I had free time, and that’s where I started to pay more attention to the issues of the bad tax outcomes that they were getting from financial advisors that were helping work with the clients. I said, “Why did you do this?” “My financial advisor said to do that.” “Who is this financial advisor, the enemy?”
So, I started to learn to do research about what a financial advisor was, and guess what I found, Michael? I found something that you had written. I don’t know what newsletter it was, and through you, I became aware of this thing called Certified Financial Planner. So, I started researching this and going to the CFP board’s website and read what they say it was. And I said, “Oh, my God, this is exactly what I want to do. Instead of helping my clients after they already messed up and cleaning up the mess, I can help them avoid making the mistakes, by planning, so being in a future-looking instead.”
Because tax preparation is backward-looking. You’re explaining, you’re telling a story to the government in the way that they asked you to do it through the tax return of what has already happened. But when you’re a planner, you’re looking into the future. So, I said, “This is fantastic, that’s what I really want to do.” So, I started to find out how I could study for that. I did some research in Philadelphia, and I found out about a program through Temple University in Philadelphia that was run through Kaplan Schweser, actually, with Temple University. I wanted my classes to be live, so I took the course I wanted. I did it the hard way by going to the classes for an entire year because I want to go deep. I didn’t want to ask questions.
Marina: I could have skipped the tax because I was grandfathered because I was an EA, but I didn’t want to do that. I wanted to understand how it’s taught for planners. And then I got my CFP in 2013.
Michael: Okay. So, did you have a sense of where you were going to go with getting the CFP certification? Did you have a vision of what the business was going to become, or was that still part of the question mark of figuring out, “I’m going to go get the education, but then got to figure out what my business model is going to be and what I’m going to do with this thing?”
Marina: Yeah, I really didn’t think that part through, and they don’t teach it part of the CFP course, unfortunately. They don’t teach you what the options are. So, I think I had, at the time, the idea that I was just going to do planning through my tax firm, which you cannot really do, but I wasn’t aware that you really cannot do it, at the time. But I didn’t even have to think too long about it, because as I mentioned, my professor suggested becoming a member of FPA. At first, I thought, “I’m just going to read,” but then I realized that I could contribute, even though I was just studying for my CFP, at the time.
That’s when I started getting offers to work with different firms that were cross-border financial planning firms, or financial advisory firms. Two of them were RIAs, and the other one was abroad but working with Americans in the country where they were located. So, it just happened naturally, without me having to think about it.
Michael: Right. Now it makes a lot more sense in context, this journey of how it unfolded. You had spent the better part of 10 years building this tax expertise, this international tax expertise, by being posted overseas and then building a tax practice, and ending out with international tax clients, because they were the ones that were going to stick with you while you were traveling to various states, as well.
All that builds up to the point that by the time you’re posting messages on Financial Planning Association message boards, you’ve actually already got a really deep level of tax expertise, because of all the work that you’ve been doing along the way.
Marina: Exactly, yeah. Because of the crash courses the VDP programs were. So the financial planners, or the financial advisors that needed help with those issues recognized really quickly that I knew what I was talking about. They had probably been looking for a while for somebody to help them – actually, they told me they’ve been looking for a long time.
Michael: Well, as they say, I’m assuming if you’re a firm that has this specialization and is trying to find people to hire, I suppose the one caveat is it’s hard to find other people to expand in the firm. It takes 10 years to train one, as you went through 10 years of training, so if this is your specialization and you see someone who actually has the expertise, it’s like, “Oh, yeah, we need to figure out how to get that person on board sooner rather than later.”
Marina: Yeah, and that’s what happened.
Michael: Interesting, which again, to me, makes an interesting point, just from the advisor career path sort of perspective of, again, when you build some kind of specialization, where you’ve got this differentiation around your expertise, you can start creating a lot of inbound career opportunities that show up, because literally, you’ve differentiated yourself and your knowledge in the marketplace. And there are not necessarily a lot of others that have that expertise, so it makes you very hireable.
Marina: Right, so you’re narrowing your pool of potential employers a lot, but for those potential employers, you’re like a diamond, because they can’t find that. It’s very difficult to find, or they had to devote a lot of time developing a person with those skills, dedicated many years to do that.
Michael: Right. So, I am wondering, though, just, you had this tax clientele already. You’re building out this planning expertise by getting your education. What was it that made you decide to take a job and affiliate with a firm, as opposed to just saying, “Look, I’ve already been running my own business and getting my own clients, and doing this. I’ll just… Oh, apparently, I can’t run my planning fees through my tax practice, I guess I need this RIA thing,” at some point that shows up on the radar screen.
But you could have just gone and tried to create your own RIA and start doing this alongside the clients you’d already been developing. What made you decide, “I want to go do this as an employee in another firm“?
What Prompted Marina To Join An Existing Firm And Then Later Decide To Go Out On Her Own [01:09:01]
Marina: I didn’t even know what an RIA was, so I couldn’t imagine creating my own RIA if you don’t even know what that is. So, I hadn’t thought about doing that, and good thing, also, because I would have realized how difficult it is and how many barriers of entry there are.
So, I was offered the opportunity to join. There were three firms that wanted to hire me, so I said, “Why not? These firms are already ongoing, it seems perfect.” So, I had to decide between the three, and one of them, they were fee-only, they allowed me to work remotely. With one of the others, it would have been impossible to do it remotely. With the third one, it was in a foreign country, so it was not very clear how that would work. So, I chose to join that RIA, and that’s the one that had the U.S.-Swiss specialization, and so that’s when I started studying all the specific Swiss sides of things. As I started to understand more about the business – because I didn’t know anything about the industry, even. I was born and raised abroad, and then with my husband, we were living in foreign countries. I had only been living in the U.S., by the time that happened, for nine years. And I was doing tax, so it wasn’t a world that I was even aware of, or I understood.
But as I operated in that world, I started to understand the business. I started to study more. I started to listen to podcasts. I was listening to your podcast, to all kinds of podcasts, reading all kinds of books, learning how the business operates, and trying to make my own…having to have my own view of how I wanted to serve clients or my idea of what a business should look like. So, it wasn’t until I had that clear that I decided that I wanted to have my own firm.
Michael: Okay. So, then help us understand how this changed and morphed to the point where you’re not an employee at another firm, now you’re out on your own. What was that journey, and what shifted that…you went from being in a firm to saying, “Well, no, I actually do want to run my own RIA, hang my own shingle”?
Marina: At some point, with that other firm that had joined, even though I was paid as an employee, I was really paying a fee for certain services that the firm was providing, as I was running my own profit center. So, I had my own office, everything was through my own budget. So, my own equipment, my own office, my own travel budget, my own technology, my own everything. So, I was already building my business within another business.
Marina: That gave me a lot of experience and allowed me to make a lot of decisions like, “Oh, I would like to use this software because I think it’s a lot better than the software that is provided by my platform.” So, I started doing certain things that way. I teamed up with one of the advisors at the firm because we felt that there were synergies there that were going to be fantastic for the clients in terms of value, but also for us and opportunities for growth.
I’m very collaborative by nature, so working as a team was something that I valued a lot. But the firm was kind of built like silos, and so that was one of the things that didn’t work out very well for me. Also, the standard of care was different because I came so much from the tax side. On the tax side, there’s so much thinking and anticipating tax issues or viewing tax opportunities, “Oh, my God, there’s this thing that doesn’t coordinate well with one system and the other, so I can maybe convert taxable income into tax rate income.”
Those opportunities are not that easy to come by on the purely domestic side, but they come when you’re combining the two. So, I was super-proactive in my approach, which is very different from the firm’s standard of care, which is being very responsive but reactive.
Michael: So, you wanted to do proactive tax planning, and they wanted to just help clients be tax compliant as issues came up. But that meant you weren’t really in there until the issue had already come up.
Marina: Yeah, so what started to happen is that I was servicing clients very differently from the rest of the advisors as a team. The other advisors at the firm, the fact that they were silos, and they were more reactive than proactive, and that I was already working as a team with somebody else. So, as I wanted to continue to grow that approach because I saw how good it was, the conflicts between the way the firm wanted to do things and the way that I wanted to do things, we started becoming more and more difficult to overcome.
So at some point, I realized that it wasn’t in anybody’s best interest to keep trying to do what I wanted to do with that firm and that I should do it either with my own RIA or by finding another firm that I could join that would allow me to do it then in the manner that I thought it was the better way to do it.
Michael: I think your story makes an interesting point. I feel like a lot of advisors who run firms and build firms don’t realize sometimes, like our industry’s historical approach of keeping advisors in siloed models and treating each one as its own independent profit center. And obviously, understand the economics of that, “Well, I know all the advisors with our firm are going to be profitable because they generate their own revenue and they cover their own expenses.”
But I think you put it really well in highlighting well, in practice, what basically happens when you do that is you’re literally creating, starting your own advisory firm training wheels, like a practice approach, because you’re already showing them how to run a business, how to operate it segmented and all the rest, that it just doesn’t take a big leap at that point, when someone eventually gets the level of saying, “I think I could actually just do this on my own, and I actually am large enough with enough clients now that I would probably keep more of my dollars by doing this on my own and building my own infrastructure or finding someone else to work with than continuing to affiliate with the firm that I’m affiliated at.”
So, as the firm owner, best-case scenario, your employees start negotiating and haggling with you to say, “Well, I want a bigger payout, I want more revenue sharing or more dollars of,” whatever it is, and you get all these challenges that start cropping up that as the firm owner, I think you end up digging your own grave to some extent, by setting up the structure this way, because it inevitably ends out exactly where you did.
Marina: Well, I think that it’s very difficult for business owners to make the decision to jump from a practice to a business, and so some of them take an approach that they think is like a hybrid. I think I’m jumping into a business, but I don’t really want to make the investment of time to develop the infrastructure and the investment of money to build the team, so what I’m going to do is just I’m going to bring other advisors onto my firm and let them do their own thing with very basic guidance. And then that’s how I’m growing my business.
I’m thinking that I’m building a business, but you really are just doing some different silos that are all independent practices working under a bigger umbrella.
Michael: Yeah, and just what to me, setting up for that inevitable moment when eventually, that advisor gets large enough and sizable enough that they can start doing the math on how much they’re spending for your platform offering and saying, “Well, I think I could hire my own employees and do that,” or, “I think I could find another platform that would do this at a lower cost, or a better arrangement, or have some other distinction that makes this more appealing for me.”
Marina: Yeah, in my case, it wasn’t a matter of cost. It was a matter of having what I felt was a solid foundation that I needed to build the business the way I wanted so that I could devote the time to the things where I was really skilled, that I could really create value. I was spending a ton of time doing operations work. Because when you’re in a silo, you have to do everything. I am not good at typing, so for me to have me typing up Schwab forms and then spending 10 hours on the phone, which you have to find out what the heck happened with my account application – international – because the passport club, because once international is a lot more AML that they have to do, so it’s not easy to open the account.
So, I would be spending more than half my time doing admin stuff. So, that was an opportunity cost to me to build a business, and it was also…and I’m sure you’re familiar with Stephanie Bogan’s below the line and above the line. It was a below the line task that really drained my energy and didn’t create any revenue for me, which is the only way to feed myself. So, it was a bad situation.
I needed to be in an environment that I could outsource. I felt I needed – in order to do what I wanted to do and to really focus my time on the things that I can do best to help clients – I need to be able to outsource the operation, which is something that I couldn’t do where it was, and to have better technology that would allow me to either outsource the investment management, the investment administration of the portfolios I would write, or to do it more efficiently because we were managing the investments, the clients’ portfolios, at the household level with multiple layers of tax restrictions. And if you don’t have the technology, you have to do everything manually by downloading it to an Excel spreadsheet. You’re spending countless hours on something that you can do in 10 minutes if you have Eclipse and Orion. But you have to spend 15 hours because you have to download it directly from travel advisor center into Excel and then do all the calculations manually.
Michael: Right. When you decided you were going to go out on your own and do this and break away, and as you noted, still more inclined to outsource or find partners than just literally build your own – all of your own stuff from scratch – what did you do in practice? How did you actually make the transition?
Marina: Well, actually, I wanted to start my own RIA. I wanted to do that. I thought that’s what I wanted to do. Actually, I wasn’t sure what I wanted, so the first thing I did was to hire a business coach. One of the podcasts that I listened to regularly was “Between Now and Success,” Steve Sanduski. I thought that his questions were very insightful, and what he presented was insightful. I thought that he had the right skills to help me figure out what was the best way to transition out, so I started working with him and evaluating the different options. So, we decided, oh, yes, having my own RIA was the ideal path for me, for the type of control that I wanted to have and for how I wanted to build my business.
The problem was that I didn’t have a business, and so when you’re dealing with international, you have to be multi-custodian. Custodians need minimums to establish the relationship, and when you’re at the bare minimums, you are at the lowest level of service. To deal with international issues, you need the highest team to deal with, and so it was going to be – in practice to do it – it was going to be extremely difficult.
So, I was going to – probably going to replace the problem of not being able to do the investment management more efficiently and the operations more efficiently or having to deal with all the complexities of an RIA so I would end up with the same problem. It was a different type of problem, but not solving the issue of having the time to be delivering value on the specific cross border planning skills that I had for my clients.
Michael: Okay, so what becomes the alternative then? You have to find someone else to tuck into or to affiliate with so you can leverage the size of their relationship to get onto the higher level service teams with Schwab?
Marina: That’s right, with Schwab. Unless Schwab isn’t enough, we need to have multiple custodians because our clients sometimes start in Switzerland, but then they move to a third country and they want to keep working with us. So, we do have clients in other countries that are not Switzerland. We have clients in Hong Kong; we have clients in South Korea; we used to have clients in China, now they’re back in the U.S.
So, that happens, and so when they move, the custodian might not be able to keep the account, because there’s a restriction – there are the country restrictions. So, it’s a restricted country, and now you have to find another custodian. So, we need to have at least two. We thought, we can have Schwab and Pershing or Schwab and Fidelity, for example. We were working with Schwab and Interactive Brokers at the other firm, but Interactive Brokers is just not really very good on the adviser side, so if we could avoid it, that’s really what we wanted to do.
Then the conclusion is, okay, let’s find another RIA where you can plug in and see and make sure that they’re aligned with how you want to run the business, and they will be a good partner. Because even though I wasn’t aware of how hard it is to move from one firm to another, I knew that it wasn’t something that I wanted to have to do again. So, I wanted to do my due diligence and find the right partner.
But a barrier that I found very quickly, is that most RIAs don’t want to have anything to do with having an investment advisor representative in a foreign country. So, a lot of people that were super interested in the potential and the value, they really believed that we can deliver and we can create something very successful, the moment we said, “What about my partner?” His face is, “Sorry, never mind.”
Michael: Because you already had the relationship with Jeff at this point, so you were coming to the table with, “Oh, by the way, I’ve got this foreign partner who is also going to have to be under the structure, because he’s got the investment expertise and is going to be a key part of the advisory fees we’re charging.”
Marina: Right, because at first, I decided, well, I need to start in another niche, right? I saw if I was going to stay with U.S./Switzerland, which I wanted to because I already have all this knowledge and I really felt sincerely that nobody could do it better than I could because I had invested so much time about being really good at what I do, and provided services to my clients with a really high standard of care, I needed a Swiss connection because that’s unnatural to me. If I wasn’t working with somebody off the ground, I was going to lose that ability to develop the Swiss side of the network: the Swiss attorneys, the Swiss tax advisers, the Swiss insurance agents, the Swiss mortgage brokers, that we have on the U.S. side when we want to help our clients on this end, and also the ability to research the things that come up. Because tax laws don’t change just in the United States, or securities laws don’t change just in the United States, they also change in Switzerland. So, for me, it was critical if I was going to stay in this niche, to have a partner based in Switzerland. Otherwise, I was going to do something completely different if that wasn’t part of the plan.
How Marina Found Dynamic Wealth Advisors And How Their Relationship Is Structured [01:24:51]
Marina: Exactly. Yes. Yeah, so it was actually thanks to you that I ended up finding the perfect match in the RIA world in Phoenix, Arizona. One of the things that I love to do is I love to walk and hike. When I walk or hike, one of the things I do is I listen to audiobooks. I switch between listening to music when I don’t want to think about anything, or I listen to audiobooks or listen to podcasts.
So, I was listening to one of your podcasts, and I think that’s probably around January, I don’t remember exactly, this year, and you had a guest called Stephanie Bruno. She starts telling her story, and even though she didn’t have the international side of it, a lot of the things that she went through, the path was so similar, and I felt that I was living her story through the way she was telling it in your podcast.
She said she hired a coach, and she started exploring the options. She said she wanted to start her RIA, but she thought she would be overwhelmed and it would be too much. And either, I don’t remember if it was her coach or somebody told her, “Well, actually this firm…” at the time, I think she was based in Arizona or maybe she was in Colorado. I’m not sure. “There’s this firm in Arizona that you can outsource all the parts that you don’t want to deal with: operations, compliance, portfolio administration, and plug in with them. So, why don’t you contact them?”
She spoke so highly of what they were providing for her, and it felt that it was exactly what I was looking for. So, after listening to the podcast, I came almost running back home, to look them up, and to click on your show notes, to click on the link, and to call them. I left them a voicemail, and it took them close to a month to reply to the voicemail because I think they were overwhelmed with all the inquiries that they were getting because of that podcast, I’m not sure. But it took a while.
But they finally called me back, and they wanted to learn more about what I was planning, and what my background was, and what I was thinking of doing. But I said, “Before we get any further, I need to tell you, I have a partner in Switzerland. If that’s going to be a problem, let’s not waste everybody’s time.”
Michael: If that’s a deal-breaker, just get that out of the way right now.
Marina: Right. Right. Surprisingly, they said, “No, actually, we want to grow internationally. We see the opportunity that it is. We think that the U.S. financial system is so much better than foreign financial systems, that we can provide something really competitive to foreign investors, and so we want to explore that.” They were already talking with a firm, I think, in China also, and so they had an interest. So that was the perfect match, and so we started working on all the details, and then it was a matter of working out the details and deciding when it would be the right time to make the jump. The pandemic is what ended up accelerating that, but yeah.
Michael: What was the name of the firm for folks who are listening? Folks who’d like to find out more about this?
Marina: Yeah, so the name of the firm is Dynamic Wealth Advisors. They take care of our operations, the mid-office compliance, and the portfolio administration. That’s what they do for us. Obviously, we pay a higher fee than we were paying before at the RIA, because they do more, but they do the things that, well, we need them to do, and they’re doing using that technology that we wanted to use, that before we didn’t have available.
Michael: Because now you’re on Orion using Eclipse?
Marina: Exactly, Orion Eclipse, Salesforce for the CRM. We didn’t have a CRM at all before. We use Advizr for financial planning, which is incredibly what we were using before. I was a beta tester of the financial planning software Advizr. It was so basic at the beginning. But with the cross border issues, no software really works. You still have to do a lot of things manually in Excel. So, what I was looking for when I decided to work with Advizr was the ease of use for the client, a clean, clear interface for the client that could be like the hub where we can keep track of the path of the wealth of our clients, what are the financial planning tasks that we’re taking care of, and where we have the client vault with all the documents that are important.
And so that’s really, more what it does. Although we use it for some projections, we have to tweak things because it doesn’t calculate foreign tax credits, but no software does. Even if you’re with eMoney or the most sophisticated planning software, they’re not going to do that. None of the software has multi-currency, so you’re still going to have to do things manually, no matter what software you have. You might as well have one then that is super easy to use for the clients.
That allows you to have a higher percentage of adoption from the clients, so it’s better for the firm. For us, it is better to do that.
Michael: It sounds like functionally, because you mentioned being an IAR, functionally, what Dynamic Wealth Advisors is actually the RIA, you’re an IAR under them and under their compliance, but you get to create a DBA for running your own segments of the business so that you can do what you do with Jeff internationally. Is that the structure?
Marina: Exactly. Yeah, that is exactly what the structure is.
Marina: They really were super-flexible in working with us, to find a way that it would allow us to be successful that also benefited them. So, when we reached out to them to outsource these things, there were other benefits that we weren’t even aware that we were going to have the possibility of potentially teaming up with other advisors under the platform for particular projects where our U.S. Swiss cross border expertise is needed for clients that they have.
What I like on the portfolio management side is that they’re looking for ways to innovate. That’s the mentality that I have, the mindset that I have. So for example, they are now implementing ESG portfolios, which is, by the way, something that was really important for us working with younger clients. My partner, his college degree is in environmental economics, so he had a big interest in everything that is ESG, which is a lot more advanced in Europe. The adoption happened a lot earlier in Europe that is happening here.
We had already some ESG portfolios that Jeff had built when we were working at the other RIA, but here, he was able to work with all the tools that they have a dynamic to really improve the portfolios and create our own ESG models. Those are the ones that are the most popular for clients. Now Dynamic is doing their own ESG models, I would imagine that they will use more mutual funds and things that maybe we cannot use for the clients who are abroad.
The other thing that they’re starting to look into is direct indexing, which for me, as a tax person, I’m super interested in that. So, that would allow us to, if we have higher net worth clients to provide and that is going to be more tax-sensitive to really provide a lot more tax-efficient portfolios. So, there’s a lot of things that I wasn’t aware that we’re also going to be benefits from this, that are also part of what we are enjoying, and it’s allowing us to grow. We’re doing really well, we’re so happy. So, it’s going very well, even though we haven’t – like I said, we just hit the ground running. It’s been five months only since we’re doing this with them.
Michael: How does the cost structure work with a firm like Dynamic Wealth Advisors? You pay them a platform fee? You pay them a percentage of revenue or some number of basis points? How does that actually work, particularly since you have a lot of non-AUM, just minimum fee clients?
Marina: Yeah, so most of our clients, about 95%, we do have AUM with them, even though they might be smaller amounts. Very few of our clients are financial planning-only in the end because, eventually, they realize that it’s better for them if we manage their IRAs or smaller accounts that they might have. So, we pay an AUM. The fee is based on AUM that we pay to Dynamic, and we also pay a technology fee.
We also, because we wanted a higher level of operational support, we pay a concierge fee. The concierge fee is a fixed fee that we pay a month to have a person who can interact directly with our clients. We believe that creates a lot more efficiency because it’s somebody who knows their system. It’s on both sides of the… On our side of the process and on their side of the process there’s a lot of efficiencies to that, so we’re asking to provide that. We pay a technology fee for access to all the technology that they provide, and then the AUM fee. That is a regressive AUM fee, so as we grow, the fee, the next…
Michael: The next year gets cheaper?
Marina: Exactly, exactly. Yeah.
Michael: So, can you give us a sense of just how these add up for you? Are we talking about 10 basis points of AUM fees? Are we talking about 30 basis points of AUM fees? That’s like $100 tech fee or $1,000 tech fee? What does this add up to for you?
Marina: For the technology fee, it would be a lot less than if we had to get the technology on our own, because we have the discounts. Because basically, they’re a bigger RIA, so they can get the technology at a big discount, so we pay whatever fee it is that they pay for 88 advisors using that technology, right? So, that allows us to do whatever, if something would cost, I don’t know, $150 per user per month, maybe we’re paying $125.
There’s a basic technology fee, and then there’s a menu that builds on top of that that you can add, if you want you can use Riskalyze, but you don’t have to. Or if you want to, I don’t know, have Advisor Stream or have Engines at an additional fee, but you don’t have to. But that’s offered to us at discounted rates.
With respect to AUM, it’s more than 10%. We’re just starting out, remember. We’re just doing that. We’re very small now, so we’re at the higher percentage.
Marina: But as we grow, I think that when we get to 100 million, then it drops to single digits. So, that’s really the carrot for us to get to 100 million because then that allows a lot of efficiency for us on the cost side, and will increase our profitability for – obviously, they’re making an investment on us too, so while we’re growing they have a much higher AUM percentage fee than when we’re larger. We both believe that this is going to be a success, so we’re hoping that we can get there pretty soon.
What Surprised Marina The Most About Building Her Own Advisory Business And The Low Point In Her Journey [01:36:03]
Marina: What surprised me? How it’s difficult. It didn’t surprise me because I already done it on the tax side and I was already doing it within the other firm. It’s just so many decisions that have to be made. I don’t know if it’s a surprise. It ended up being harder than I expected, but I was expecting it to be hard.
So, one of the things that I’ve been doing is I was building my support team. I had my business coach, as I mentioned, I had my partner in the business, as I mentioned. I joined the advisor growth community for community and to provide support, and that’s been phenomenal. There are so many things that you have to take into account that you really need to be well prepared because it takes a while… It’s a huge investment. We have to hire attorneys in the U.S. and in Switzerland. You have to set up the companies in the U.S. There’s a huge investment that you have to make in the beginning.
When you’re doing cross-border, it’s much larger than when you have to do it domestically. And then you have to wait for the business to trickle in. What I had told my partner is we need to be prepared to not be able to pay ourselves a salary for two years. And then if we achieve the results faster, and it looks like it’s going to take a lot less than that, then that’s fantastic. But we need to be prepared for not being able to take a penny of salary for two years because it might take that long to be able to do that.
Michael: What was the low point on this career journey for you over the past decade?
Marina: Well, for a while, Michael, when I finally understood that the firm where I was at before I made this transition wasn’t the right place for me, I thought that most likely what I would do is I would abandon the industry altogether and go back to tax. That was really hard for me because I enjoyed so much working with my clients. The work that I did with my clients was the joy of my life. I wanted to continue to do it, but I just didn’t see the path to do it. I didn’t think it was possible. It was also inferred or that was the message that I was receiving from a lot of people, “You won’t be able to ever do it. It’s not possible.” So, I let other people define what was possible for me, and that was a really low point.
When that happened, I decided I actually – I need to take control of my destiny, and let me determine whether I can do this or not, and not let others decide for me. The moment that I made the decision, and I started building my support team and building my savings, I stopped taking any salary, so everything was going to a savings account that was going to fund the business, that is when I started to emerge from the low point.
But then the actual transition in April, when that happened, having to resign and not being able to tell the clients what was happening because of legal restrictions, and then the pandemic on top of everything making things 10 times harder than they had to be, that was really hard emotionally. I don’t think that I would have been able to do it if I didn’t have the support of my family, the support of my business partner, the support of my friends, the support of colleagues that had the same type of mindset that I have, that had done similar things that had been successful. And if I hadn’t listened to others like you that are so generous sharing your knowledge to show us the past and the ways that this can be done, I don’t think it could have been done.
It was difficult to do it, and it’s still difficult because we’re still building it, but now it’s super exciting because it’s going so well. I think we’re onboarding six clients this month. People are finding us, and we don’t even have a website up yet because they’re still in the development process. So, it really confirms that it was the right decision. If you are prepared and you understand how hard it’s going to be, anybody can do it. If I can do it, anybody can do it with determination.
Michael: What do you know now about running and building an advisory business that you wish you could go back and tell you from six or seven years ago when you were first getting your CFP marks and coming into the financial advisor world?
What Marina Would Have Told Herself When She Was Getting Started, The Advice that She Would Give New Advisors, And How She Defines Success For Herself [01:40:25]
Marina: What do I know now? I didn’t know anything seven years ago. So, what happens is when you don’t know something, it looks a lot easier. What other people are doing always looks easy, and we, as humans, we tend to really think that what we do is difficult and we’re the only ones who work hard because we do not see what’s not visible, right? You only see the visible part of anything.
So, what surprised me is really understanding what an investment it is to get an independent advisory firm off the ground and get it to the point of profitability, and how much work it requires. I didn’t have a clue about that. I would have done maybe things a little bit differently, but I think things happen at the time they need to happen. So, maybe emotionally, I would have been ready earlier, but really, on the experience side, I wouldn’t. It took me a really long time to understand what the options were, and even when they were explained to me, there were things that were not that clear.
I almost got to the point of signing a contract with a big RIA, and I said, “Oh, let me see if, under this platform, there’s anybody I know.” And there happened to be somebody very close to me. I met with her and I started asking questions, and a lot of the things that they were promising were not happening. So, even when you do a lot of due diligence, you can still make mistakes, because things appear to be one way and they might not end up being that way.
Yeah, that happened also, even with Dynamic. Even though the experience has been great because they’re working with us to make sure that we’re both successful, they didn’t have the experience with the international, so a lot of the processes that they thought were going to be easy ended up being very difficult and us having to invest five, 10 times, it’s not 10% more, no, 1,000% more to make it work. That’s the part that is hard to see, and it’s hard to understand when you haven’t done it.
Michael: What advice would you give to a newer advisor that’s career-changing into the financial advisor world?
Marina: One of the things that I wanted to bring about that we didn’t have the chance to talk about is that you don’t see a lot of people like me in the industry. I don’t know that I can give advice to everybody, in general, because everybody’s experience is so different, but I would like to give advice to people like me that because perhaps they don’t see themselves as somebody who can own a business, to help them understand that if that’s what they want, that they can do it.
But that doesn’t have to be what they want. There are so many different ways that you can provide services in this business, that can be fulfilling and create value for clients, and help you to achieve your personal goals. So, advice that I would give to everybody – so everybody has to understand what’s your own power, and then act. Take agency and take ownership of your own power and that’s in a way, and take advantage of all the fabulous generous people who are out there like you, sharing this information and providing it for free.
Just listen to all these podcasts. I used to listen to all these different podcasts, and I have learned so much about the business not so much from working but from learning from the experience that other people shares in podcasts. There’s yours. Because I like to learn about investments, I listen to “Invest Like the Best,” “Between Now and Success,” “Mindy Diamond,” and “The Perfect RIA,” where Matthew Jarvis and Micah Shilanski, they talk about how to be hyper-efficient. What I like about them is they’re also very tax-focused, which is what I am.
So, you can learn a lot by listening to other people. Don’t try to do this by yourself, would be my advice. So, spend the time to really understand what you like to do, how you like to operate, and then go and search for the knowledge and find the way that is the right path for you.
Michael: As we wrap up, this is a podcast about success, and one of the things that always comes up is, I mean, just the word ‘success’ means different things to different people. I know you’ve gone through a lot of changes, and as you say, I think this was your fourth stage of career-changing through the journey, and now building the successful practice with a really cool focused niche. But I’m wondering, how do you define success for yourself at this point?
Marina: I have the word that matters the most to me, which is ‘equity’, and equity in the sense of equal access to opportunity. So, I consider success is if I help to reduce inequity, or I help to improve equity in a sense. So, allow other people to have access to things, to allow others to have access to opportunity, make sure that we all have the same access to opportunity so that we can all be empowered to live the life that we want to live.
So for me, success is when I am able to help others empower themselves. That’s why I love our profession so much because I see the power of financial planning and wealth advisory services, and in opening the eyes of our clients into opportunities that then they themselves self-censor and they decide, “I cannot afford to do this.” So, we can empower them to think bigger about what their life can be. We have all the technical knowledge that allows them to achieve that path as tax efficiently and more financially efficiently as possible, but the value is in the sense that we allow them to be more empowered.
So for me, success is allowing me to empower others and to have a positive impact on others, and to pay it back in the way that others have opened the path for me. I believe success is when I make the path easier for other people. If something was hard for me, then I wanted to make sure that it’s easier for somebody else. That’s why I have the Cross Border Planner and the Course Border Academy, because when I was living in London, there was nothing to help that. So, I want to have a resource available for people that I didn’t have when I needed it.
I’m the type of advisor I am because this is the advisor that I would like to hire for myself. That’s what defines my standard of care. So that, for me, that’s how I define success. Then my presence in the world – make the world a little more equitable than it would be if I hadn’t been around.
Michael: I love it. I love it, Marina. Thank you so much for joining us on the Financial Advisor Success podcast and sharing your story. I hope it helps some other advisors out there going through some similar challenges, maybe find their path a little bit more open and easy.
Marina: Thank you so much, Michael, for having me. It’s a privilege for me to be here. Thank you for all you do for all of us in the profession, because you helped me find my answer and my path. And so I hope I can do something similar, at least for one more person. So, thank you for having me.
Michael: Thank you.