Live from Cleveland, Ohio, it's C-level Game plans with host Norman Hood. Hey, good afternoon, Sturt. Welcome to the show. Thanks, Norm. How are you doing? Good, I'm great. Hey, we're gonna just jump in here and talk a little bit about your program, which is creating a one-stop shop that maximizes and protects family wealth. So first step, we're just gonna talk about what people do when they struggle to, to do this on their own. So can you give me an example of a client you worked with where right at the beginning of the process they maybe had some didn't want to make changes, maybe they felt like they didn't have time, that sort of thing. So just tell me a story about somebody and kind of how it worked out. Sure. Think about how the current platform works. You have the client that sits in the middle and then if he's faced with some financial problems, what does he have to do? He's got to go to the wealth advisor, and then the wealth advisor might give him a question or a series of solutions, and then what's the next step? You might say, hey, I need to talk to my CPA. So then he talks to the CPA translating what he said to the wealth advisor. The CPA said, I'm not quite sure I got it. So then the client comes back to the wealth advisor and says, uh, the CPA is not on board. And then the wealth advisor says, maybe gives them another suggestion, and they go back through it again, says, hey, maybe we need to bring in an insurance guy. And what ends up happening is the client sits in the middle of all of these experts trying to be arbitrator and trying to be a negotiator between all the things that he didn't actually want that position. So what we've done is we've turned that upside down. So we've seen that problem in the past and we've turned that upside down. So now we collect the CPA, the advisor, the insurance guy, and whomever else we might need, whether that's a evaluation person for the company, whether that's cost segregation, the one stop shop. Truly we bring all these guys in. So, as a case study, we have clients that have sold their business for $20 million and they didn't know where to start. So we bring in valuation specialists, M&A specialists, estate planning specialists, tax mitigation specialists, wealth advisor. We all collect them in the same virtual room. To help solve the problem for the client and optimize the solution for the client. OK. Make, makes good sense. Now we're going to move on and talk a little bit about how you get the ball rolling once you get past that. So I know that we'll have existing advisors. You already mentioned that. How do you handle that in the process if they already have a team of maybe 10 advisors? Yeah. So again, I was in that place, I'll say 5-10 years ago where If somebody else had another advisor, even one that wasn't in my field, let's say it was insurance, and I don't sell any insurance, I would get my protective gear on and try and figure out a way to collect more of the wall chair and butt heads with that insurance person, and that's obviously not best for the client. So we put ourselves out there as the quarterback, if you will, and we're not looking to disrupt a relationship. You think about the best possible outcome if I disrupt the relationship is just to get back to status quo. Somebody trusts another advisor and I replace that trusted advisor with somebody else, hopefully we get to that trust point and that's the pinnacle that you can get to. So I've got no motivation, no upside to replace anybody. So somebody is directly competing in my field. I'm hands off. I don't have the motivation to do that. What we want to do is find where we can fill in the gaps, and pretty much everybody has gaps, as we might say, I'm from Chicago. We'll say Michael Jordan struggled at baseball. Arguably we can talk about whether he's the greatest basketball player of all time. He's up there. But his baseball career, not so awesome. We want to bring in the experts to fill in those gaps, and I don't care how smart you are in one area, you're going to have gaps in others. So we're not looking to displace or disrupt. We're looking to augment and fill in the gaps. OK, so when someone goes from the way you mentioned, you used to operate to how you operate now, what changes and first, and then how does that affect the long-term result? I think the long-term result is fantastic. I'll start with that first. Just imagine, think about whether, I guess I'm gonna use another sports analogy. Do you want individual superstars on your team that are playing separate games, or do you want a team of superstars playing together? Who do you think is gonna win, especially if you're playing on behalf of the client? So that's what we've done. What's the change as far as the client goes? There's no change for the client really. We operate in our quarterback. We'll have a team behind them that we'll call a proactive planning team. We assess the needs just like we would at any other given point in time, but instead of just assessing perhaps what are your portfolio management needs, we assess all of their financial needs. We try and do a diagnostic. And then we take them through a discovery session. So we, we look for what they might need, we do a deeper dive, we find some experts and specialists, and then we implement the plan. So we prioritize this. If it happens to be that wealth advisory, which is my lane, is not one of those top priorities, that's totally fine. We want to just make sure that client is satisfied and happy and taken care of in all of its priorities. These are our priorities. So you touched briefly about coming up with this approach. Can you tell me when, when that happened? I mean, what, what was the light bulb that went on, the epiphany where you decided this isn't gonna work anymore and just, you know, how you put this together. So when I first got into this field, I was taught in many businesses are taught this same strategy is you need to specialize, and you need to specialize in order to get. I don't know, more advanced in your career. So think about a doctor. A doctor, a generalist doctor gets paid a certain amount, but as you get more and more specialized as you become a surgeon and then a brain surgeon and then a brain surgeon in a very specific area, you're able to charge more and more and get very specialized in that area. So that's where I was going at. My specialty was quantitative asset management. We use math and statistics to build portfolios, and so I got very deep in that area. But the epiphany to answer your question is like, I had somebody say to me, let's just say you're better than everybody else. Let's say you are the best money manager there is on the planet. I'm going to give it to you. Let's say you beat everybody by 1% or 2% a year. Granted, now, is that likely? No, so he's setting me up right now, right? So he says, let's say you're the best. But I also need. X, Y, Z, A, B, C, all of these other things. So I sacrifice all of these other services for a couple percent a year. I'm not gonna do that. So his example was, let's say a large investment bank, Goldman Sachs. I said I can get a bunch of other services at Goldman Sachs, even if they're not the best money manager. It makes sense for me to be there. So that's when the light bulb comes off. Now take that one step further. Goldman Sachs and all the other large banks are limited by their compliance department. They can't outsource other people and collaborate. It's actually against the rules. They will get fired if they do that. So as an independent RAA I can tap into specialists all over the country and the world for that matter, and we do, to bring them in to help solve a problem. So unless somebody has it, their best number one guy in-house and they're cooperating and collaborating in-house. It's a worse model. Our model where we can pick and choose and bring people in is far superior. OK, you, you may have answered my next question, but maybe we go a little bit deeper on it. So you, you obviously have a different pattern than a lot of, a lot of people doing the same type of thing, so. What happens if your pattern fails? So you, what signals would you see that this wasn't working, or is it even possible that at some point it might not even apply to some people? Fails, so I have to ask you how to define failure. So the how it would fail in my opinion is somebody just doesn't have the assets or the need for a virtual family office. The clients that we serve the best have a particular set of criteria. So if somebody is paying. $10,000 in taxes and has a portfolio of $15,000 it's probably not suited for our business model, right? We can't really reduce the taxes. They're not going to get specialized service for that portfolio size. It's going to be not a good fit. That said, if you had somebody to come in, and here's the criteria that we generally look for somebody with at least $1 million or $2 million in net investable liquid assets, somebody that's paying at least $100,000 in taxes a year, or somebody that has a business that's generating at least $3 million in top line revenue, if they have one or several of those criteria, we could probably help them. Now, the question is failed. I'll give you an example of a failure that I'll put out there. There was a gentleman that had a $14 million portfolio. He was paying around $280,000 in taxes every single year, and we presented him a financial plan. We guaranteed a 10x return on the money we were going to charge. If we could not save him 10 times the money we were charging, we would give him a refund. He paid half of the money up front. We laid out a plan for him. And what happened was we proposed saving him 15 times that number of what we were charging, and he looked at it and he, and I don't actually know why, but he said, I am not going to implement the plan, and he paid me the balance. So we demonstrated we could save him the money, but for whatever reason, he decided not to go forward and still paid me. I offered him a refund and he said, No, you showed me what you could do, and that's what I was paying for. Yeah, that's, that's, that's a pretty strong testimonial actually, yeah. So, OK, I'm looking at your process. So 3 phases, 3 steps to each phase, very logical sequence. So probably different than other people do it. What does doing it your way in that specific order? What, what's it accomplished that maybe some others might not accomplish using the default approach? Initially, I guess we're going to start with the fact that it's not just wealth advisory or doing a financial plan, OK. So if we have a broad spectrum of solutions or of of specialists across the globe that we can help the 70 or 80 on our platform, we really have to hone in on some priorities. So we will start an inch deep and a mile wide. So we'll do a diagnostic tool, ask them about a variety of questions in wealth management, risk mitigation, business activities, legal services, a variety of questions along those lines. Then we'll have them prioritize what they think they need at the moment and often when we start with that that 1 inch deep in a mile wide type of questionnaire, we might get 1520 different areas of interest. Nobody can work on 20 different areas of interest. If I've got 20 different house projects, I can't work on all of them at the same time. I got to pick one or two that I'm like gonna hone in on and then that's what we do. We'll say, all right, you have 20 different projects here. Which ones are the most important or the biggest needle movers or what do you want to focus on first and then so we'll hone in on one of those 212 or 3 at most probably, and then we go an inch wide and a mile deep. All right, you need information on wealth management. You are lacking or not liking that advisor in this area. What is the problem? And then we dive deeper there. So that's how our process is a little different than what somebody might just say, hey, you need wealth advisory or you need insurance. That's probably my best example. You need insurance. I'm gonna sell you insurance. You got a problem. I'm selling your insurance. Like, I don't care what your problem is, you're getting insurance, right? We don't do that. I don't even sell insurance, but if you need insurance, we'll get an insurance specialist that can help solve that problem. OK. So we're gonna play a little game called first, last, best, worst, and I'm gonna, I'm gonna have you give me an example of a client, and you can pick your first one, your best one, your worst one, or your last one. All right, I hope I'll figure out how this goes, but let's see, go ahead. 1st, 1st client for this program, last client, best client result, worst client result. Oh, OK, interesting, so first client. was the first time was the guy with the $10,000 the tax mitigation strategy. OK, the $14 million guy who signed up for this program. It was an amazing testimonial. Signed up. He was actually paying a monthly service fee, paid a planning fee, and then said, I'm not going to implement, but here's your money. OK, well, we'll, we'll take that one. Now I'm gonna, I'm going to move on now and talk about how you measure results. So when you're first getting started, there's several steps along the way and there's a measurement for each one, but when you're just starting in the beginning to measure your client's result, how do you do that at the very beginning? How do you know if this, this person's actually progressing and, and has a chance of getting to the end? It depends on the priority, right? I was gonna maybe even go. I thought we're gonna do all the first, last clients and do all those examples. So for example, the last client or what I call current client right now, we just sold his company for $25 million. He's going through a state planning strategies. We're going to present him tax planning strategies and so we just watch it progress and then as we do the and some of these take a while, right? So if he's had the transaction. This year in February, he's not due the taxes until April, let's say, so we're gonna be putting in tax mitigation strategies and then when the CPA fills out the tax returns and says, hey, instead of you owing, this is a real life example, instead of you owing $5 million on your taxes, you only owe $500,000 on your taxes. I'm going to call that a success. So as we are going through and saying here's the implementation on the tax side you know ahead of time how much money they're going to save like it's math. On the investment side, you don't really know until you get some time under your belt. So we can go back and look at past performance, certainly not a guarantee of future results, but if the process is relatively the same, I think it's a decent indicator of what could potentially happen. So as we look in the past on the wealth management side, when I've done reports, let's say over the last 5 years, we measure up versus down capture. For example, I might have a client that's extremely aggressive. And I might have a client that's extremely conservative. You would want the aggressive client to make more money when the market's going up than the conservative client. But when the market's going down, they're probably going to lose more money. They're willing to take on that risk. But what we want to do is say how much of that market did he capture the upside? Was it 90% of the upside? Was it 150% of the upside, 200%? And then how much of the downside did they capture? do we capture all 100% of the down, or maybe we only dropped by 50% of what the market did. And that ratio upside capture divided by downside capture gives you a, did we add value? Anything over 100 is I added value. I'm capturing more up than down. Doesn't matter whether I'm aggressive or conservative. Am I capturing more up than down? And so our ratios tend to be around 250%. Awesome. Across the board. So I don't know if you have a crystal ball or not, but we did first and we did the last, and you don't know the questions in advance, but we're gonna, the last question about results. So I wanna hear about the best results you've got and how do you, how, how you confirm that you took the right path to get that. Yeah, I think I touched on them actually. So best result was that tax mitigation client that had a $5 million tax bill that we dropped it by 90%, which is a pretty good result. We can, we can do that pretty consistently across the board. Just like an investment, you have some strategies that are very aggressive and some that are very conservative. Same thing on the tax side. You have very aggressive tax strategies and very conservative tax strategies. I've got clients that are aggressive and conservative on the tax side and on the investment side, so. We can drop it, but it sometimes takes a little bit more aggressive approaches, so for that particular client, best results. Saved $4.5 million in taxes, 90% of their taxes on the wealth management side again across the board, there was the last, actually the last performance review I did was only for 3 years, so we didn't include 2022 because they didn't have an account with us in 2022 when the market dropped. So it was just 3 years which were all up and the upside capture was over 350%. OK, awesome. Hey, great interview, Stuart. Appreciate your time. I hope you come back sometime. Yeah, thanks for having me, No. Yep, take care.