August 6, 2024 • 33 mins
Michael Conway shares how advisors at his firm, Conway Wealth, prioritize a deep understanding of each client’s values and puts health and well-being at the center of the planning conversation. In this episode of the RIA Edge Podcast, David Armstrong, editorial director for Informa Connect’s Wealth Management Group, talks with Michael Conway, founder and CEO …
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(00:01):
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Hi, everyone, and welcome to the RIA Edge
Podcast. Thanks for tuning in. My name is
David Armstrong. I'm the editor of wealthmanagement.com.
And this, as you know, is the podcast
(00:42):
where I get the chance to speak to
executives and principals of RIA firms on their
story around growth. How they're growing the firm,
how they make the decisions to grow, where
they choose to deploy their resources.
And today, I'm thrilled to be speaking with
Michael Conway, the CEO of Conway Wealth. Michael,
thanks very much for joining us. David, thank
you for having me. Looking forward to, to
chatting today.
(01:03):
I appreciate it. So for those folks who
don't know, could you just give us the
101 on Conway Wealth, where you're located, the
firm, the size, the clients you serve,
and, and your value prop.
Yes. For sure. So Conway Wealth,
I've been doing this a long time.
It's interesting. You, I think, on your podcast
(01:24):
talk about
grow by design, not by default.
That's right. Right? So we at Con where
we talk about
we talk to our clients about live a
life by design,
not by default.
So I'll we'll unpack that a bit today
as we chat.
But,
really, the
(01:45):
value proposition
has to do with what we do at
Con Way a lot around
live a life by design, not by default.
So we do comprehensive wealth planning
for wealthy individuals,
but then we go really deep.
We wanna do all the deep planning, and
then we wanna go
(02:06):
into all other areas of life.
So
we do,
money management, insurance planning, again, retirement cash flow,
all of it, but we go very deep
in
the overall relationship with the families that we
work for.
Okay. And when you say,
(02:27):
go deep into the relationship with the families
that you work for, can you give us
just a a bit of a profile of
those clients of those families? Are we talking
mostly high net worth individuals? Or Yes. Mostly
high net worth individuals,
and and and one of the main features
that we'd like to talk about is clients
or prospective
(02:47):
clients that are family stewards.
And so as we get to build these
relationships,
we're gonna ask
a lot of questions
and even go into other areas outside of
financial planning.
So we have something we call the life
and wealth
network.
(03:08):
And with that,
we talk to our families about
we wanna quantify
and, again, life beyond the numbers.
Yeah. No. That makes sense. This is a
something we I think we hear more advisers
(03:30):
talking about recently. It sounds like you've been
doing this for a while, but advisors recently
talking about the movement towards wealth and health,
aligning
goals and what does wealth really mean for
you. It doesn't mean the same thing for
one client that it might mean for another
and how do you as an advisor help
clients kind of determine what's important to them
(03:50):
and and that largely will determine
where their bar for wealth is. Right? And,
you know, everyone's a little bit different.
I guess, life coach kind of kind of
a scenario. Is that accurate? Is that That
that is definitely
accurate. So it's I always talk about
so families
anybody can manage money and do the detailed
(04:13):
financial planning that we speak of, and you've
got the way I refer to it is
you have to be
a Navy Seal with this stuff. Right? You
can't take any of this deep planning
lightly.
But then going beyond that,
how can we help a family
in these other areas? So health is always
a big one.
Right? So imagine you you have and we
(04:37):
talk about the types of families we work
for and somebody has
$3,000,000. They have 50 or a $100,000,000.
But on a scale of 1 to 10,
just to use the health as an example,
there there are 3.
Well, you've done all the cash flow modeling.
You've done you've done all the financial planning,
(04:58):
but but they're not gonna
live to enjoy the fruits of their labor.
So is there anything we can do to
come around that family and possibly
refer
solutions that can help them
live a better life in that regard
with nutritionists
or
concierge medicine or food delivery programs or,
(05:21):
trainers or workout solutions or whatever. But
those are things if we can add value
in these other areas, we're definitely looking to
do that for for the folks that we
work for.
Yeah. That's interesting because the
I imagine that
that requires
like you say, you have to be a
Navy Seal when you do this, and you
do this on a spoke basis for each
(05:42):
client,
requires a fair amount of time and and
resources that,
you're choosing to spend there as opposed to,
building out yet another
referral machine or acquiring another firm or growth
by just bringing more clients in the door.
So at some point, you made a decision
to say,
if we
(06:03):
concentrate deeply on the clients that we have
versus
Definitely
Definitely.
I think of this.
If I'm a client of this business
and
and and and if I the way I
(06:24):
look at this, if I had an adviser
and my adviser was helping me with all
of the financial planning,
table stakes,
and then went deeper for myself
and my partner
and my other family members,
guess what? That is
wildly
(06:45):
enjoyable
and rewarding as an adviser,
but go figure it's also good for business.
If if if we can send somebody on
a wonderful vacation now we're not planning the
vacation,
but we'll have solutions in that regard.
(07:05):
Or if there's a relationship issue, we can
bring in consultants.
So all of the deep planning and solving
these other areas, but, yeah, go figure it's
good for business because as it relates to
advisors that wanna work in an environment like
this
or our clients
introducing us to other people going, hey. These
(07:27):
people do all of the deep planning
and and life beyond the numbers as I
keep going back to and all these other
other areas. So it's really good for business
as well, for sure.
You find that
the organic growth,
from
happy satisfied clients
(07:49):
being your
advocates out in
the in the in the larger world is
the
driver there?
Yes. Definitely.
Definitely.
As as our clients talk to their friends
who have advisors at other firms or big
investment banks or whatever, they're not getting your
(08:11):
word the the bespoke type solution
that they would get from a Conway Wealth.
So that is a growth engine for sure.
So tell me about the resources that you
rallied to do this kind of life planning
work.
There's, I'm sure, stuff that you have internally.
I know you have some process, some alignment
(08:32):
process that you use that I that I
think is yours. Yes. Correct.
Ex explain to me about that, how that
works. Because I think this is a proprietary
method that you guys deploy
yourselves. Yeah. So I I've been
I remember I I when I first started
in the business, I couldn't wait till I
was doing this 10 years so I could
say, yeah. I've been at this a decade.
(08:54):
Now I wouldn't mind taking a couple of
those years off, but I've been at this
multiple decades
and am a user of a lot of
the solutions
that we've deployed.
So being a student of the business and
using a lot of these solutions, whether it's
vacation solutions
or
(09:14):
travel solutions or food nutrition
programs.
I have gone out over the years, over
the decades, and looked at different solutions
to or I use them myself,
(09:36):
and and that's been how we've gone about
it.
So these are,
and maybe you can give me an example
of just just pull one out of of
kind of a almost a concierge like
network that you can refer clients to if
they need a food plan, there's a a
resource that you have out there somewhere for
them, or
maybe navigating,
(09:57):
the college process for their kids? There's a
resource that you have out there somewhere? Or
Well well, definitely. So the college process is
one of them, and that would fall under
the financial planning.
But what there could be a food delivery
program or a nutritionist
that we have referred to people.
But, yes, we have a we have a
host of solutions and continue to add to
(10:17):
the network.
Interesting. The, I
tell me a little bit about the then
the the if there's some way that you
could characterize
or however you wanna quantify
the growth trajectory
of Conway.
You know, if folks are listening to this
and think, you know, that sounds great, but
(10:38):
if I go through and try to be
the life concierge for each one of my
clients, that's taken the foot off the gas
at other places. Can you somehow characterize quantify
the growth trajectory of Conway and how this
has, helped to your firm?
For sure.
So I I would say it it does
indeed go back to the referral part of
the story.
(10:59):
It it would really start, David, at the
top of the funnel
with getting the right client.
And so what is
who is your customer?
What is their pain point
or points? What are the issues they're trying
to solve for? Can we, as a business,
(11:20):
solve those problems,
and can we articulate
consistently
to the market how we're solving those problems?
And so if we're able to do that
so Conway, for instance, I mentioned a family
stored
is is sort of a title that we
would give somebody that we would love to
(11:41):
have in our ecosystem.
And and we can't deliver all of the
solutions if we're bringing on smaller
clients. We can't deliver those solutions to everyone,
so we're really looking for the right fit.
But we have been able to
replicate
our family stored clients by referrals and introductions
(12:06):
and bring in advisers that wanna use
the tools that we've built in our practice.
So it's helped us grow significantly
over the years.
Interesting. I imagine for a lot of the
clients that you work with, the high net
worth entrepreneurs,
there's a level of also financial planning that
(12:26):
isn't
often found in your typical RIA. Maybe if
we get into, like,
tax planning or estate planning, trust services, etcetera.
Are these the kinds of things that you,
also have a referral network for or
have you thought about building, bringing in house,
some of those services,
(12:46):
and and how do you think about the
economics of offering those kinds of ancillary
services?
As it David, as it relates to financial
planning
Mhmm.
Yeah. We we wanna outsource.
So as a
we will do the comprehensive financial plan in
house.
We'll use money management that we do internally,
(13:10):
and we'll outsource,
the tax returns
and the estate documents to professionals outside the
firm.
Mhmm. I don't like the economics of bringing
in and doing the tax returns
and acting as a law firm to do
the wills and trust, I don't think makes
sense.
(13:31):
So
we would be doing
all the planning in house and then bringing
in expertise to complete,
the tax work and the estate tax work.
Okay. Do you see a
point in your trajectory where it would make
sense
to bring those,
(13:52):
professionals in house under the roof, or
do you think it's
just economically wouldn't make sense regardless of the
size of the firm?
I don't think I'm open to changing my
mind, but as of right now, now, I
don't think it would make sense to do
that in house
at this point
or in certainly the near future.
(14:13):
Mhmm. Mhmm.
That makes sense. So talk about the,
the the the investment process that you use
with clients. So that is something you do
in house.
You know, what are the
portfolios that you put together for clients? How
bespoke are those?
(14:33):
What are the kinds of a a value
prop that you bring in terms of just
purely the investment side of the the business?
So one of the things that has changed
fairly significantly
for us
is
our
investment solution
seeds
investor.
Mhmm.
(14:55):
Something we started my son and I started
several years ago
as we had this sort of epiphany
as it related to money management.
Everything was done off of
which still makes sense as it relates to
money management, was done off
time horizon
(15:15):
and risk profile
have to do that. Right? You're putting to
get together
a detailed portfolio.
But beyond that,
what else is important to that investor?
So it was kind of a one size
fits all.
That was the genesis of this company, Seed's
investor, to better assess
(15:37):
investors and and build personalized
portfolios
using
their particular values and what is important to
them.
Mhmm. And the, David, the analogy that I
use
as it relates to this,
we live in an experienced
economy.
(16:00):
In all those years, I was doing investment
review sessions that were pretty much the same
for every client.
But we live in a different world. You
go to Starbucks, it's a you have an
experience.
When when you do you watch Netflix at
all?
I'm sorry. Say that again? I said, do
you watch Netflix at all? Oh, yeah. Of
(16:21):
course. Yes. Mhmm. Yeah. So when you think
about it, when you turn Netflix on,
you're getting curated
solutions that
they think you're gonna enjoy.
Does that make sense? Sure. Mhmm. Yeah. So
If you like if you like that, you'll
like this. Yep. Well, exactly. So guess what?
So I get fed, cowboy movies or, army
(16:42):
movies or even even religious
different experience. So what we do at seeds
investor
is we we through the assessment process there,
we wanna look at risk profile.
(17:03):
We want to look at time horizon. But,
again, what is important to that
And we wanna give back to them in
their experience
a highly
effective
portfolio with low tracking error, tax loss harvesting,
(17:27):
and the type of experience they would expect
in this experience economy. So as you do
review sessions,
the way I would talk to
this person
might be wildly different than the way I
might present
to somebody else.
And and seeds investor helps us do all
of that and manage the portfolios.
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Yeah. No. That's interesting. That is seeds, we
know of. That's the, the it's the relatively
new platform that your you use, and I
I think there's some other investors in the
in the platform as well. Right? I think
Ritalts Wealth Management is an investor in seeds
and That is correct.
(18:31):
Some others. And and it's would you characterize
it as a and and this might be
pejorative, and I don't mean it to be,
but a a kind of a ESG focused
direct indexing kind of platform?
That's fair to an extent, but, David, take
it back to its root of
that ESG
label is
really it is it is a bad label.
(18:53):
But
but does someone care about those things?
If so, we should build a portfolio that
aligns with their values.
And if they don't care at all
about that, their portfolio should align with their
values. It's their values.
Sure. And this is it gets around the
(19:14):
the
often the criticism of ESG is that it's,
you know, kind of a cookie cutter value,
portfolio. Right? You know, that,
they assume all investors in the fund have
the same
same outlook. And,
And they and they don't. They don't. It's
their money. And so asking the questions and
going beyond what we've done as an industry
(19:35):
historically
makes sense. So you ask about money management.
We wanna build
low tracking our portfolios
that align with people's values,
that tax loss harvest across everything,
help them meet their long term objectives.
We'll also
as with most things, we will build in
(19:57):
alternatives into a portfolio where we might have
dependent upon the client. So as you're building
alternative investments anywhere from 5 upwards to 20%
of a portfolio
as diversifiers,
But, again, it all ties back to
what the client wants to do and their
long term objectives for sure.
(20:18):
Now is seeds a,
the the platform that every investor at Conway
would, would they go through that
process, or is it a
something that's deployed for certain clients?
The seeds assessment is something we would take
every client through. Okay. Mhmm. To discern
what is the best output for them, and
(20:39):
then we would make decisions from there on
how portfolios and assets would get deployed.
You know, there will be a as as
as well as anyone, an ongoing debate around
the the notion of values based investing versus
just make as much money for me as
I you possibly can type of investor
and the pendulum seems to swing back and
(20:59):
forth.
Working with the clients that you work with,
it sounds like
you believe that most investors
would indeed
perhaps,
sacrifice
some basis points in return
if the portfolio
reflected their values or their view of of
of of the world?
(21:21):
No.
Okay. Good.
No. Because
if you're someone
that is concerned I always use the it's
a somewhat silly example.
But if you're someone that wants to clean
up the or shouldn't
shouldn't your views be incorporated into your portfolio?
But as I said before, if you don't
(21:42):
if
the fiduciary
model returns
matter,
and if you're someone that doesn't care about
the even if you do care about it,
you shouldn't sacrifice
But it's your money, and you should be
able to make those decisions as it relates
(22:04):
to your overall portfolio.
Mhmm. We often term we all we often
think, David, in terms of sacrifice and giving
up as it relates to this, but we
shouldn't have to do that.
Okay.
Yep. There's a I'm
(22:24):
yeah. I'm the
debate rages on, around ESG,
in investing, and
and I I
tend to agree. I think that, it doesn't
necessarily be is a detriment to returns. I
guess what I'm getting at is, dear, conversations
that you have with clients,
it sounds like the conversations are
(22:47):
driven mostly by these value conversations
and not so much, will you need x
amount of dollars for this particular point in
life. So let's make sure that this portfolio
is
giving you that return with the least amount
of risk we could possibly take, but to
get to that point, having that money available
at that particular point in the future.
Sounds like your conversations are a little bit
(23:08):
different and that they are based around
values.
What do you think are what do you
does the client think is important in the
world? You know, where do they want to
deploy their capital to do the best work
or the the most, efficient work they can
do?
It sounds like a very just a very
different conversation that you have with clients when
they walk in the door, and I don't
know about that. It has to be David,
(23:29):
it has to be both. Mhmm.
The they they they we have to help
the client meet their long term objectives.
Hard stop.
But the point is they should be able
to do that,
and we need to help them do that
and give them an experience that aligns with
(23:51):
the way they see the world,
whether
or not they want a values based portfolio
or nonvalues
based portfolio.
It's up to them. It's their money. It's
their experience.
Mhmm.
Right? But but those long term financial objectives
have to be met. You can't give up.
(24:14):
I I tell people,
this is not, pixie dust and unicorns.
Right?
You if the S and P is up
6%
and you're up too
because your portfolio aligns a certain way, that's
not a good solution.
You need a diversified approach that aligns with
(24:34):
your values and helps you meet your long
term objectives.
That's that's what you're after.
What do you find, you know, in the
in the growth trajectory of your firm,
the biggest obstacle? You know, where do you
think,
you know, if you could choose one area
where if things were just a little bit
easier in that particular area, you know, we
would unlock a certain amount of growth beyond
(24:56):
what we already enjoy.
What are what are the the what's what
what are the the bottlenecks? Or what kind
of holds back the growth? Where do you
find the biggest challenge?
I think
the the
is having consistency
in strategy
in the business.
And so making sure you're doing a lot
(25:18):
of work on the business, not just marketing
or not just money man it all has
to be done. It all has to be
done at a very, very high level.
But having strategy with
how you do
reviews,
How you take data, how you present things
across the business needs to be scalable
(25:40):
and repeatable.
You can't figure out every morning when you
turn the lights on how to run your
business.
You've gotta have a practice that the whole
team is pulling on the oars in the
same direction.
It's scalable and repeatable. And if you don't
have those processes
in place,
(26:00):
you're gonna end up with all kinds of
pain points in the business.
So
as it relates to the financial plan, the
money management, the review process, all of it
needs to be detailed
and ironed out. So all the team members
from
the ops, I call it, all the way
(26:21):
down to the CEO,
everybody knows
how how the meetings work and what are
the processes for each part of the plan.
Mhmm.
Are there any metrics that you could share
that you keep an eye on that would
tell you that it's time to
add a financial adviser or that it's time
(26:42):
to
add a para planner or add another operations
assistant.
How do you know when those points are
are,
what what tells you that it's the point
to to go out and hire or to
bring in additional resources? Are there is it
just an AUM number or is it is
it do you have something around
number of advisers
(27:02):
to clients? Or Yeah. It's it's typically,
it's typically done in the neighborhood. It's not
an exact number, but in the neighborhood of
about 75 families per adviser.
Mhmm. And and some of the things, David,
we've talked about today with deep financial planning,
a life and wealth network,
(27:23):
seeds investor.
If I find anywhere in the business and
with the executives at Conway
that service
begins to slip in any way as it
relates to all of those things and process,
then it's time to add
additional people, whether it be an adviser or
operations people.
(27:44):
So we look at the metrics in AUM
and households.
And how would you know when,
service begins to slip? Is there a
a point where
I mean, a couple of, you know, disgruntled
phone calls is one thing, but
(28:05):
a certain number of
feedback on,
adviser serve or client surveys or something. I
mean, how do you how do you get
to the point where you know,
okay, clients are less than happy with this
particular,
process or this particular area,
so time to time to act?
We do stand up meetings weekly on Mondays
(28:28):
with executives
at Conway,
and we're drilling down on,
we're we're looking to run a raving
fans
solution,
and we wanna make sure that we keep
that consistency.
So when we get to that that magic
number right around 75,
(28:49):
could be 80, but in that neighborhood,
we're going above that. I know service will
slip, so we add.
Okay.
We're also
it's
you know, the the railroad,
you feel the vibration of the train. We
wanna listen for,
(29:09):
what are as we send surveys out to
our clients each year,
what's the feedback we're getting? If we're getting
exceptional feedback,
and we know we're we know we're on
track. If we're getting any issues that pop
up, we we know we need to dust
things off and make sure we're we're staffed
properly or make tweaks in that process.
(29:30):
So I think it's families. I think it's
weekly meetings,
and it's getting constant feedback from the team
on how they're doing and
how they're doing with the families they work
for.
Mhmm.
When it comes to,
the the families that you serve,
how much of your future growth is,
(29:53):
assumed based on your ability to bring in
the next generation of clients'
kids. Right? I mean, the the kids of
of clients. So it sounds like you work
with a lot of high net worth families,
probably some intergenerational
wealth. Yes. I imagine keeping that money,
close to to home isn't important. Can you
tell me a little bit about your family
(30:14):
services, how you bring
the the younger
children of clients into the conversations? I imagine
some of them are professionals themselves but don't
yet quite have enough money to maybe,
you know, be part of the the Conway
Wealth client base, but obviously are in on
a
track to to to be so. Tell me
a little bit about how you engage families.
(30:37):
It's it is a big deal, and I
think we as an industry fail. What what
is the stat? Something like,
I don't know, 85%
of of children will will leave their parents'
financial adviser when they're
when when they inherit their folks wealth.
Yeah. We
really
(30:57):
work hard
to talk to the kids of our clients.
In particular, we spend so much time about
that consistency
I talked about before,
bringing these family stewards into our ecosystem.
We want the kids of those folks in
our business
10 years,
15, 20 years from now.
(31:17):
So
we proactively,
when we're doing our reviews with our clients,
One of the things that I do and
and have the team,
build
is
we actually do a family tree
for our clients.
What what's the most important we wanna talk
(31:39):
about? About? We wanna talk about our tribe.
We wanna talk about our people.
I wanna know I want my advisers to
know everybody
in that family ecosystem and who we should
be speaking with.
So so we go deep on that. So
we'll talk about the entire family, and then
we'll be talking about the kids and scheduling
(31:59):
review sessions
with them and beginning the building blocks of
their plan
so that they're ready
as they inherit wealth and with their own
personal wealth as they grow.
That's great. I I Michael, I know we're
getting the, the the,
the hook here from our our producers. I
know we're at the at the the maximum
(32:21):
amount of time, so I've I've been you've
been generous enough with your time. So thank
you very much for doing this. I really
appreciate it, and and thank you very much
for the conversation.
I learned learned something about Conway Wealth, and
I I think our audience did too. Thanks
for joining us. David, thanks, Aneli. It was
great to speak with you today. I appreciate
it.
And thank you for listening to the RIA
Edge Podcast.
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(00:22):
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Hi, everyone, and welcome to the RIA Edge
Podcast. Thanks for tuning in. My name is
David Armstrong. I'm the editor of wealthmanagement.com.
And this, as you know, is the podcast
(00:42):
where I get the chance to speak to
executives and principals of RIA firms on their
story around growth. How they're growing the firm,
how they make the decisions to grow, where
they choose to deploy their resources.
And today, I'm thrilled to be speaking with
Michael Conway, the CEO of Conway Wealth. Michael,
thanks very much for joining us. David, thank
you for having me. Looking forward to, to
chatting today.
(01:03):
I appreciate it. So for those folks who
don't know, could you just give us the
101 on Conway Wealth, where you're located, the
firm, the size, the clients you serve,
and, and your value prop.
Yes. For sure. So Conway Wealth,
I've been doing this a long time.
It's interesting. You, I think, on your podcast
(01:24):
talk about
grow by design, not by default.
That's right. Right? So we at Con where
we talk about
we talk to our clients about live a
life by design,
not by default.
So I'll we'll unpack that a bit today
as we chat.
But,
really, the
(01:45):
value proposition
has to do with what we do at
Con Way a lot around
live a life by design, not by default.
So we do comprehensive wealth planning
for wealthy individuals,
but then we go really deep.
We wanna do all the deep planning, and
then we wanna go
(02:06):
into all other areas of life.
So
we do,
money management, insurance planning, again, retirement cash flow,
all of it, but we go very deep
in
the overall relationship with the families that we
work for.
Okay. And when you say,
(02:27):
go deep into the relationship with the families
that you work for, can you give us
just a a bit of a profile of
those clients of those families? Are we talking
mostly high net worth individuals? Or Yes. Mostly
high net worth individuals,
and and and one of the main features
that we'd like to talk about is clients
or prospective
(02:47):
clients that are family stewards.
And so as we get to build these
relationships,
we're gonna ask
a lot of questions
and even go into other areas outside of
financial planning.
So we have something we call the life
and wealth
network.
(03:08):
And with that,
we talk to our families about
we wanna quantify
and, again, life beyond the numbers.
Yeah. No. That makes sense. This is a
something we I think we hear more advisers
(03:30):
talking about recently. It sounds like you've been
doing this for a while, but advisors recently
talking about the movement towards wealth and health,
aligning
goals and what does wealth really mean for
you. It doesn't mean the same thing for
one client that it might mean for another
and how do you as an advisor help
clients kind of determine what's important to them
(03:50):
and and that largely will determine
where their bar for wealth is. Right? And,
you know, everyone's a little bit different.
I guess, life coach kind of kind of
a scenario. Is that accurate? Is that That
that is definitely
accurate. So it's I always talk about
so families
anybody can manage money and do the detailed
(04:13):
financial planning that we speak of, and you've
got the way I refer to it is
you have to be
a Navy Seal with this stuff. Right? You
can't take any of this deep planning
lightly.
But then going beyond that,
how can we help a family
in these other areas? So health is always
a big one.
Right? So imagine you you have and we
(04:37):
talk about the types of families we work
for and somebody has
$3,000,000. They have 50 or a $100,000,000.
But on a scale of 1 to 10,
just to use the health as an example,
there there are 3.
Well, you've done all the cash flow modeling.
You've done you've done all the financial planning,
(04:58):
but but they're not gonna
live to enjoy the fruits of their labor.
So is there anything we can do to
come around that family and possibly
refer
solutions that can help them
live a better life in that regard
with nutritionists
or
concierge medicine or food delivery programs or,
(05:21):
trainers or workout solutions or whatever. But
those are things if we can add value
in these other areas, we're definitely looking to
do that for for the folks that we
work for.
Yeah. That's interesting because the
I imagine that
that requires
like you say, you have to be a
Navy Seal when you do this, and you
do this on a spoke basis for each
(05:42):
client,
requires a fair amount of time and and
resources that,
you're choosing to spend there as opposed to,
building out yet another
referral machine or acquiring another firm or growth
by just bringing more clients in the door.
So at some point, you made a decision
to say,
if we
(06:03):
concentrate deeply on the clients that we have
versus
Definitely
Definitely.
I think of this.
If I'm a client of this business
and
and and and if I the way I
(06:24):
look at this, if I had an adviser
and my adviser was helping me with all
of the financial planning,
table stakes,
and then went deeper for myself
and my partner
and my other family members,
guess what? That is
wildly
(06:45):
enjoyable
and rewarding as an adviser,
but go figure it's also good for business.
If if if we can send somebody on
a wonderful vacation now we're not planning the
vacation,
but we'll have solutions in that regard.
(07:05):
Or if there's a relationship issue, we can
bring in consultants.
So all of the deep planning and solving
these other areas, but, yeah, go figure it's
good for business because as it relates to
advisors that wanna work in an environment like
this
or our clients
introducing us to other people going, hey. These
(07:27):
people do all of the deep planning
and and life beyond the numbers as I
keep going back to and all these other
other areas. So it's really good for business
as well, for sure.
You find that
the organic growth,
from
happy satisfied clients
(07:49):
being your
advocates out in
the in the in the larger world is
the
driver there?
Yes. Definitely.
Definitely.
As as our clients talk to their friends
who have advisors at other firms or big
investment banks or whatever, they're not getting your
(08:11):
word the the bespoke type solution
that they would get from a Conway Wealth.
So that is a growth engine for sure.
So tell me about the resources that you
rallied to do this kind of life planning
work.
There's, I'm sure, stuff that you have internally.
I know you have some process, some alignment
(08:32):
process that you use that I that I
think is yours. Yes. Correct.
Ex explain to me about that, how that
works. Because I think this is a proprietary
method that you guys deploy
yourselves. Yeah. So I I've been
I remember I I when I first started
in the business, I couldn't wait till I
was doing this 10 years so I could
say, yeah. I've been at this a decade.
(08:54):
Now I wouldn't mind taking a couple of
those years off, but I've been at this
multiple decades
and am a user of a lot of
the solutions
that we've deployed.
So being a student of the business and
using a lot of these solutions, whether it's
vacation solutions
or
(09:14):
travel solutions or food nutrition
programs.
I have gone out over the years, over
the decades, and looked at different solutions
to or I use them myself,
(09:36):
and and that's been how we've gone about
it.
So these are,
and maybe you can give me an example
of just just pull one out of of
kind of a almost a concierge like
network that you can refer clients to if
they need a food plan, there's a a
resource that you have out there somewhere for
them, or
maybe navigating,
(09:57):
the college process for their kids? There's a
resource that you have out there somewhere? Or
Well well, definitely. So the college process is
one of them, and that would fall under
the financial planning.
But what there could be a food delivery
program or a nutritionist
that we have referred to people.
But, yes, we have a we have a
host of solutions and continue to add to
(10:17):
the network.
Interesting. The, I
tell me a little bit about the then
the the if there's some way that you
could characterize
or however you wanna quantify
the growth trajectory
of Conway.
You know, if folks are listening to this
and think, you know, that sounds great, but
(10:38):
if I go through and try to be
the life concierge for each one of my
clients, that's taken the foot off the gas
at other places. Can you somehow characterize quantify
the growth trajectory of Conway and how this
has, helped to your firm?
For sure.
So I I would say it it does
indeed go back to the referral part of
the story.
(10:59):
It it would really start, David, at the
top of the funnel
with getting the right client.
And so what is
who is your customer?
What is their pain point
or points? What are the issues they're trying
to solve for? Can we, as a business,
(11:20):
solve those problems,
and can we articulate
consistently
to the market how we're solving those problems?
And so if we're able to do that
so Conway, for instance, I mentioned a family
stored
is is sort of a title that we
would give somebody that we would love to
(11:41):
have in our ecosystem.
And and we can't deliver all of the
solutions if we're bringing on smaller
clients. We can't deliver those solutions to everyone,
so we're really looking for the right fit.
But we have been able to
replicate
our family stored clients by referrals and introductions
(12:06):
and bring in advisers that wanna use
the tools that we've built in our practice.
So it's helped us grow significantly
over the years.
Interesting. I imagine for a lot of the
clients that you work with, the high net
worth entrepreneurs,
there's a level of also financial planning that
(12:26):
isn't
often found in your typical RIA. Maybe if
we get into, like,
tax planning or estate planning, trust services, etcetera.
Are these the kinds of things that you,
also have a referral network for or
have you thought about building, bringing in house,
some of those services,
(12:46):
and and how do you think about the
economics of offering those kinds of ancillary
services?
As it David, as it relates to financial
planning
Mhmm.
Yeah. We we wanna outsource.
So as a
we will do the comprehensive financial plan in
house.
We'll use money management that we do internally,
(13:10):
and we'll outsource,
the tax returns
and the estate documents to professionals outside the
firm.
Mhmm. I don't like the economics of bringing
in and doing the tax returns
and acting as a law firm to do
the wills and trust, I don't think makes
sense.
(13:31):
So
we would be doing
all the planning in house and then bringing
in expertise to complete,
the tax work and the estate tax work.
Okay. Do you see a
point in your trajectory where it would make
sense
to bring those,
(13:52):
professionals in house under the roof, or
do you think it's
just economically wouldn't make sense regardless of the
size of the firm?
I don't think I'm open to changing my
mind, but as of right now, now, I
don't think it would make sense to do
that in house
at this point
or in certainly the near future.
(14:13):
Mhmm. Mhmm.
That makes sense. So talk about the,
the the the investment process that you use
with clients. So that is something you do
in house.
You know, what are the
portfolios that you put together for clients? How
bespoke are those?
(14:33):
What are the kinds of a a value
prop that you bring in terms of just
purely the investment side of the the business?
So one of the things that has changed
fairly significantly
for us
is
our
investment solution
seeds
investor.
Mhmm.
(14:55):
Something we started my son and I started
several years ago
as we had this sort of epiphany
as it related to money management.
Everything was done off of
which still makes sense as it relates to
money management, was done off
time horizon
(15:15):
and risk profile
have to do that. Right? You're putting to
get together
a detailed portfolio.
But beyond that,
what else is important to that investor?
So it was kind of a one size
fits all.
That was the genesis of this company, Seed's
investor, to better assess
(15:37):
investors and and build personalized
portfolios
using
their particular values and what is important to
them.
Mhmm. And the, David, the analogy that I
use
as it relates to this,
we live in an experienced
economy.
(16:00):
In all those years, I was doing investment
review sessions that were pretty much the same
for every client.
But we live in a different world. You
go to Starbucks, it's a you have an
experience.
When when you do you watch Netflix at
all?
I'm sorry. Say that again? I said, do
you watch Netflix at all? Oh, yeah. Of
(16:21):
course. Yes. Mhmm. Yeah. So when you think
about it, when you turn Netflix on,
you're getting curated
solutions that
they think you're gonna enjoy.
Does that make sense? Sure. Mhmm. Yeah. So
If you like if you like that, you'll
like this. Yep. Well, exactly. So guess what?
So I get fed, cowboy movies or, army
(16:42):
movies or even even religious
different experience. So what we do at seeds
investor
is we we through the assessment process there,
we wanna look at risk profile.
(17:03):
We want to look at time horizon. But,
again, what is important to that
And we wanna give back to them in
their experience
a highly
effective
portfolio with low tracking error, tax loss harvesting,
(17:27):
and the type of experience they would expect
in this experience economy. So as you do
review sessions,
the way I would talk to
this person
might be wildly different than the way I
might present
to somebody else.
And and seeds investor helps us do all
of that and manage the portfolios.
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Yeah. No. That's interesting. That is seeds, we
know of. That's the, the it's the relatively
new platform that your you use, and I
I think there's some other investors in the
in the platform as well. Right? I think
Ritalts Wealth Management is an investor in seeds
and That is correct.
(18:31):
Some others. And and it's would you characterize
it as a and and this might be
pejorative, and I don't mean it to be,
but a a kind of a ESG focused
direct indexing kind of platform?
That's fair to an extent, but, David, take
it back to its root of
that ESG
label is
really it is it is a bad label.
(18:53):
But
but does someone care about those things?
If so, we should build a portfolio that
aligns with their values.
And if they don't care at all
about that, their portfolio should align with their
values. It's their values.
Sure. And this is it gets around the
(19:14):
the
often the criticism of ESG is that it's,
you know, kind of a cookie cutter value,
portfolio. Right? You know, that,
they assume all investors in the fund have
the same
same outlook. And,
And they and they don't. They don't. It's
their money. And so asking the questions and
going beyond what we've done as an industry
(19:35):
historically
makes sense. So you ask about money management.
We wanna build
low tracking our portfolios
that align with people's values,
that tax loss harvest across everything,
help them meet their long term objectives.
We'll also
as with most things, we will build in
(19:57):
alternatives into a portfolio where we might have
dependent upon the client. So as you're building
alternative investments anywhere from 5 upwards to 20%
of a portfolio
as diversifiers,
But, again, it all ties back to
what the client wants to do and their
long term objectives for sure.
(20:18):
Now is seeds a,
the the platform that every investor at Conway
would, would they go through that
process, or is it a
something that's deployed for certain clients?
The seeds assessment is something we would take
every client through. Okay. Mhmm. To discern
what is the best output for them, and
(20:39):
then we would make decisions from there on
how portfolios and assets would get deployed.
You know, there will be a as as
as well as anyone, an ongoing debate around
the the notion of values based investing versus
just make as much money for me as
I you possibly can type of investor
and the pendulum seems to swing back and
(20:59):
forth.
Working with the clients that you work with,
it sounds like
you believe that most investors
would indeed
perhaps,
sacrifice
some basis points in return
if the portfolio
reflected their values or their view of of
of of the world?
(21:21):
No.
Okay. Good.
No. Because
if you're someone
that is concerned I always use the it's
a somewhat silly example.
But if you're someone that wants to clean
up the or shouldn't
shouldn't your views be incorporated into your portfolio?
But as I said before, if you don't
(21:42):
if
the fiduciary
model returns
matter,
and if you're someone that doesn't care about
the even if you do care about it,
you shouldn't sacrifice
But it's your money, and you should be
able to make those decisions as it relates
(22:04):
to your overall portfolio.
Mhmm. We often term we all we often
think, David, in terms of sacrifice and giving
up as it relates to this, but we
shouldn't have to do that.
Okay.
Yep. There's a I'm
(22:24):
yeah. I'm the
debate rages on, around ESG,
in investing, and
and I I
tend to agree. I think that, it doesn't
necessarily be is a detriment to returns. I
guess what I'm getting at is, dear, conversations
that you have with clients,
it sounds like the conversations are
(22:47):
driven mostly by these value conversations
and not so much, will you need x
amount of dollars for this particular point in
life. So let's make sure that this portfolio
is
giving you that return with the least amount
of risk we could possibly take, but to
get to that point, having that money available
at that particular point in the future.
Sounds like your conversations are a little bit
(23:08):
different and that they are based around
values.
What do you think are what do you
does the client think is important in the
world? You know, where do they want to
deploy their capital to do the best work
or the the most, efficient work they can
do?
It sounds like a very just a very
different conversation that you have with clients when
they walk in the door, and I don't
know about that. It has to be David,
(23:29):
it has to be both. Mhmm.
The they they they we have to help
the client meet their long term objectives.
Hard stop.
But the point is they should be able
to do that,
and we need to help them do that
and give them an experience that aligns with
(23:51):
the way they see the world,
whether
or not they want a values based portfolio
or nonvalues
based portfolio.
It's up to them. It's their money. It's
their experience.
Mhmm.
Right? But but those long term financial objectives
have to be met. You can't give up.
(24:14):
I I tell people,
this is not, pixie dust and unicorns.
Right?
You if the S and P is up
6%
and you're up too
because your portfolio aligns a certain way, that's
not a good solution.
You need a diversified approach that aligns with
(24:34):
your values and helps you meet your long
term objectives.
That's that's what you're after.
What do you find, you know, in the
in the growth trajectory of your firm,
the biggest obstacle? You know, where do you
think,
you know, if you could choose one area
where if things were just a little bit
easier in that particular area, you know, we
would unlock a certain amount of growth beyond
(24:56):
what we already enjoy.
What are what are the the what's what
what are the the bottlenecks? Or what kind
of holds back the growth? Where do you
find the biggest challenge?
I think
the the
is having consistency
in strategy
in the business.
And so making sure you're doing a lot
(25:18):
of work on the business, not just marketing
or not just money man it all has
to be done. It all has to be
done at a very, very high level.
But having strategy with
how you do
reviews,
How you take data, how you present things
across the business needs to be scalable
(25:40):
and repeatable.
You can't figure out every morning when you
turn the lights on how to run your
business.
You've gotta have a practice that the whole
team is pulling on the oars in the
same direction.
It's scalable and repeatable. And if you don't
have those processes
in place,
(26:00):
you're gonna end up with all kinds of
pain points in the business.
So
as it relates to the financial plan, the
money management, the review process, all of it
needs to be detailed
and ironed out. So all the team members
from
the ops, I call it, all the way
(26:21):
down to the CEO,
everybody knows
how how the meetings work and what are
the processes for each part of the plan.
Mhmm.
Are there any metrics that you could share
that you keep an eye on that would
tell you that it's time to
add a financial adviser or that it's time
(26:42):
to
add a para planner or add another operations
assistant.
How do you know when those points are
are,
what what tells you that it's the point
to to go out and hire or to
bring in additional resources? Are there is it
just an AUM number or is it is
it do you have something around
number of advisers
(27:02):
to clients? Or Yeah. It's it's typically,
it's typically done in the neighborhood. It's not
an exact number, but in the neighborhood of
about 75 families per adviser.
Mhmm. And and some of the things, David,
we've talked about today with deep financial planning,
a life and wealth network,
(27:23):
seeds investor.
If I find anywhere in the business and
with the executives at Conway
that service
begins to slip in any way as it
relates to all of those things and process,
then it's time to add
additional people, whether it be an adviser or
operations people.
(27:44):
So we look at the metrics in AUM
and households.
And how would you know when,
service begins to slip? Is there a
a point where
I mean, a couple of, you know, disgruntled
phone calls is one thing, but
(28:05):
a certain number of
feedback on,
adviser serve or client surveys or something. I
mean, how do you how do you get
to the point where you know,
okay, clients are less than happy with this
particular,
process or this particular area,
so time to time to act?
We do stand up meetings weekly on Mondays
(28:28):
with executives
at Conway,
and we're drilling down on,
we're we're looking to run a raving
fans
solution,
and we wanna make sure that we keep
that consistency.
So when we get to that that magic
number right around 75,
(28:49):
could be 80, but in that neighborhood,
we're going above that. I know service will
slip, so we add.
Okay.
We're also
it's
you know, the the railroad,
you feel the vibration of the train. We
wanna listen for,
(29:09):
what are as we send surveys out to
our clients each year,
what's the feedback we're getting? If we're getting
exceptional feedback,
and we know we're we know we're on
track. If we're getting any issues that pop
up, we we know we need to dust
things off and make sure we're we're staffed
properly or make tweaks in that process.
(29:30):
So I think it's families. I think it's
weekly meetings,
and it's getting constant feedback from the team
on how they're doing and
how they're doing with the families they work
for.
Mhmm.
When it comes to,
the the families that you serve,
how much of your future growth is,
(29:53):
assumed based on your ability to bring in
the next generation of clients'
kids. Right? I mean, the the kids of
of clients. So it sounds like you work
with a lot of high net worth families,
probably some intergenerational
wealth. Yes. I imagine keeping that money,
close to to home isn't important. Can you
tell me a little bit about your family
(30:14):
services, how you bring
the the younger
children of clients into the conversations? I imagine
some of them are professionals themselves but don't
yet quite have enough money to maybe,
you know, be part of the the Conway
Wealth client base, but obviously are in on
a
track to to to be so. Tell me
a little bit about how you engage families.
(30:37):
It's it is a big deal, and I
think we as an industry fail. What what
is the stat? Something like,
I don't know, 85%
of of children will will leave their parents'
financial adviser when they're
when when they inherit their folks wealth.
Yeah. We
really
(30:57):
work hard
to talk to the kids of our clients.
In particular, we spend so much time about
that consistency
I talked about before,
bringing these family stewards into our ecosystem.
We want the kids of those folks in
our business
10 years,
15, 20 years from now.
(31:17):
So
we proactively,
when we're doing our reviews with our clients,
One of the things that I do and
and have the team,
build
is
we actually do a family tree
for our clients.
What what's the most important we wanna talk
(31:39):
about? About? We wanna talk about our tribe.
We wanna talk about our people.
I wanna know I want my advisers to
know everybody
in that family ecosystem and who we should
be speaking with.
So so we go deep on that. So
we'll talk about the entire family, and then
we'll be talking about the kids and scheduling
(31:59):
review sessions
with them and beginning the building blocks of
their plan
so that they're ready
as they inherit wealth and with their own
personal wealth as they grow.
That's great. I I Michael, I know we're
getting the, the the,
the hook here from our our producers. I
know we're at the at the the maximum
(32:21):
amount of time, so I've I've been you've
been generous enough with your time. So thank
you very much for doing this. I really
appreciate it, and and thank you very much
for the conversation.
I learned learned something about Conway Wealth, and
I I think our audience did too. Thanks
for joining us. David, thanks, Aneli. It was
great to speak with you today. I appreciate
it.
And thank you for listening to the RIA
Edge Podcast.
(32:46):
Schwab Advisor Services is a proud supporter of
the RIA Edge Podcast and independent financial advisors
like you. When it comes to your independence,
Schwab Advisor Services is all in. They provide
industry leading custody services with no AUM minimums,
no custody fees, and digital onboarding for starters.
With Schwab, you'll be backed by some of
the most passionate folks in the industry with
over 35 years of experience helping firms of
(33:06):
all sizes. To learn more about everything Schwab
can do for you, visit advisorservices.schwab.com.
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