August 29, 2025 • 28 mins
In this episode, Carlos Salmon shares an inspiring journey from teaching tennis in the Hamptons to breaking into the world of finance. Through chance encounters, determination, and seizing opportunities, he reflects on lessons learned, career growth, and the unexpected turns that shaped his path. A story about ambition, resilience, and following doors that open when you least expect it.
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(00:00):
I've beendoing this, going on 15 years now.
(00:02):
Started in 2010, right out of school.
Actually, the summer of.
After I graduated,I taught tennis in the Hamptons, and,
ran into a one of my clients.
I'll see you in tennis, too.
He was, Marilyn's financial advisor.
And at the end of the summer, you know,he said to me,
hey, what are you gonna be doingfor the rest of your life?
(00:24):
You know, after the summer.
You know, you just want to be, to dotennis for the rest of your life, so I.
You know, I said, hey,I wanna do what you do.
I didn't know exactly what he did.
That made me do under $50 an hourto teach tennis,
his wife and his kids, and nice car and,you know, amazing house in the Hamptons.
I said, I want that.
So, I knew he worked at Marilyn's.
(00:47):
So I had a vague ideaof what he did for a living.
But long story short, he,went off to the court and came back,
slapped two grand, my hands and a glass.
You come to the office on Monday?
Yeah.That's how I got my foot in the door.
Marilyn, say, walk me in. And I was.
I introduced to the office manager,and he said, hey, this is a slow hiring.
And that'skind of how the interview started.
(01:09):
That's crazy.
That's a crazy inspirational story.
Do you still talk to him at all?
Every now and then.
You know, it's, he's a busy guy.
So, yes, he I and, so my so, you know, a
we've that's gone our different ways, but,
you know, we just kind of losttouch over the years. Yeah.
(01:31):
So it's such an inspirational beginningthough.
Yeah. Right.
It's it's really cool.
Interesting because I didn't havea traditional background.
I mean, I studied communicationsand economics in school.
I went to Wake Forest,but I had a tennis player. And.
Do you want an athlete?
Sports is a full time job, right?
Right. To the summers.
(01:52):
You're not doing internshipsand what have you.
And really training to come backand continue to play the next year.
So, once I went into the real world,
you know, it's a little differentfor a little bit, but.
Yeah.
for those of youjust joining us with Touchstone Talks.
I'm here with Carlos.
He's with Worcester Square as a partnerand wealth manager, and he's going to talk
(02:14):
to us a little bit about what he doesand how he works with his clients today.
May be.
I'm excited to be here.
Thank you for inviting me. Of course,of course.
Carlos and I kind of have worked togetheron exp for quite a while now.
(02:36):
Gotten to know each other.
Excellent resource.
Good person to call.
So what I hear a lot, though, with,
talking to our clientsis they have their guy.
They have their person.
So what makes somebody go
call you instead of their person?
(02:58):
Yeah. Great question.
It's a long one. It's going to be a long.
That's okay. It's okay.
It's funnybecause I read a McKinsey article
this morning about just about to me,it was highlighting two of the,
like, real big important issues in thewealth management industry going on today.
(03:19):
The first
being that there's an aging,advisor population.
Right.
So the average advisor in Americais a 63 year old white male.
Right.
Living a comfortable life
right after, businessin the wealth management space.
Nearing retirement and,
(03:40):
you know, quite more oftenthan not juggling too many relationships
to really give a high touch servicethat clients or to every single client
right outside of their top, top clientsor so.
The second thing that they had mentionedwas, the fact that there's been a
since there is a higher reliance on,
(04:01):
personal savings for retirement and,you know, not to mention
the proliferation of more complexand sophisticated investment options.
Folks today are looking for
there's a growing need for greater,
advice and guidance that is more holisticand more comprehensive.
(04:23):
Right.
So, those two factors
are leading to folksthat are leading to folks basically
being unhappyor having some level of ambivalence
with their existing advisor, primarily
because of the fact that they feel likethey're being underserved.
Okay.
(04:43):
One of the things that we're
that was also saying is in the inthe industry, in that in McKinsey article,
was that over the next seven years,a third of the financial advisors
that are in the businesstoday will not be will have retired.
Right.
So, that in the backdrop, inand of itself,
the main reason why people leave
one advisor to the next is service
(05:05):
makes sense, feel that they're gettingthe value of what they're paying for.
They don't feel like they're they'rethey're they're they're being underserved.
Right?
They there's some level of them underthey're being underserved.
I could say about 90% of my clients today
had a financial advisorbefore deciding to work with me.
So it's very few and far between that I am
(05:26):
the very first financial advisorthat somebody is working with more,
more often than not,it's it's we've had a conversation.
There was an issueat the time that they weren't happy with,
and they started to look elsewhere. Okay.
And once they start to see somebodythat has a more, tailored approach
to their specific need, then that'susually the catalyst for change.
(05:51):
Okay. It does, it does.
I actually I'm justsitting here thinking that
I don't know that I ever thought about
when I got a financial advisor,
right.
Like, I just got one. Yeah.
But I don't know that it was a marketexperience of the first financial advisor.
How how often do you run into somebodywhere you're the first financial advisor?
(06:13):
It's very rarely. It's very rare.
You know, the the two
main, client demographics are niches.
Each niche, niche.
The two primary client is clientsthat I work
with are, business owners and minorityphysicians.
Folks that are okay.
You, even even folks
(06:35):
that are comingor fresh out of residency and fellowship.
They have had some interactionwith a financial advisor.
Right? Yeah.
Tip or somebody,I should say that considers himself
to be a financial advisor,whether that's, their insurance
person that's selling themdisability and life insurance.
They've had some interactionbefore in the past, and that's that is,
(06:58):
that's usually the
case is that it's I'mnot the first person.
Yeah.
And very rarely to I mean, we're talkingabout exit planning and exit exit.
You know, business owners
that are exiting, any business ownerwith some stature of wealth
and obviously success has an advisor.
Yeah.
Well, and now you have, at least in the state of Connecticut,
they have, you know, ready made plansthat you can send your people to
(07:22):
to go get the equivalent of a 401K from the state.
Yeah. My CT saves.
So, so they've got at leastthat in place.
They've got something in place.
I can be better. But yeah.
Correct.
So talk to me.
I work with business owners.You work with business owners?
Tell me how you work with a businessowner.
(07:44):
Well, it really depends on where they arein their journey, right?
If they're five yearsor more away from their exit.
We are really
focusing on what I like to call ownerbased financial planning.
You know, take a step back.
I'm a wealth manager, so investing money,managing investments
(08:04):
is what I do as a core.
What I do all day every day. Right.
So for function,
an equally important function of,of what we do is financial planning.
And specifically for business owners.
Owner based financial planning.
So if they're five years away or more fromfrom from exiting, we're really focusing
on, de-risking their finances,improving cash flows.
(08:27):
And, and growth, both for the value.
And again, I'm doing the planning.
I'm coming to folkslike you to do the execution.
Right.
So, that's the core function there.
And then, you know, the third componentof, of when they're that far away from,
from an exit is really focusing on howcan we set them up for a successful exit.
(08:47):
What are the strategies that we needto put in place, or can we put in place
and start to, you know, which partnerscan we start to.
On to to get involved.
If they're within that five year timeframe that's go time.
Right. Right.
You really need to be workingwith a strong team of advisors
that have had experience doing this right.
This is going to be has the potentialto be one of the most single,
(09:11):
you know, the most critically importantfinancial event of their life.
Do you find that when you're lookingat their financial plan,
is most of their retirementcoming from exiting their business?
Absolutely.
The vast majority of their wealthis tied up in their business.
And again, it's, you know,going back to what I was saying before
about the busy averagefinancial advisor, right, in America.
(09:33):
A lot of business owners will havea couple hundred thousand dollars,
maybe half a million bucks,a little bit under a million maybe.
I mean, in a brokerage account.
Maybe a little bit IRA here and there orif they're, you know, if they're advisors
good enough and they work with them,they maybe have set up A41K plan for them.
But that's it. Right.
And that successful financial advisorthat's been in the business for
(09:56):
2530 plus years.
What's the likelihood of that individualthat that business owner
of being one of their top clientsand getting that white glove service
that they need, thatthey that they need and want and deserve?
Probably not there. Right.
So what we found is that, you know, folks
sell their business, you know, for five,ten, $15 million.
It happens more often than not.
(10:19):
So the majority of their wealth is tied upin their business and rightfully so.
That's that's where they've reinvestedall their time effort.
You know blood sweat and tears.
And that's kind ofwhat ends up happening. Right.
So if there is not a strong alignmentbetween
their long term personal financial goalsand the value of their business,
(10:40):
maximizing the valueand minimizing tax surprises,
if that's not part of the process,you're not really getting what you need.
Make sense?
Make sense? We hear it all the time.
Business owners don't typically love
to pay out the taxeson what they just took in.
They want options.
(11:00):
Options don't get set up instantaneously.
It takes time.
You've got to set them up overtime. Exactly.
I mean, there's there's you.
And I think you know about this,too, right?
I mean, obviously there'semergency planning, right?
If you get somebody you oh I, I, I,you know I got a,
I got an unsolicited offer yesterdayI said no why I like let's, let's move.
Let's move, let's move.
(11:22):
You have optionscertain things you can do.
But the more time you have to plan,the more arrows
you have in your quiver,the more options you have, right?
Your disposal.
Right.
The more time you have to implementthose value drivers
to enhance your business value.
And, and, and, and make your businessmore attractive to buyers.
Right. Right.
You know it's more time is better.
(11:45):
But you know depending uponwhere like I said, depending upon
where the client is in their journey,
we can, we, we
can work together in a variety of ways.
Early on in that red zone crunch timeand then also
setting them up in the futureif it's post-sale.
Right.
Investing smarter,optimizing income and reducing taxes.
(12:06):
Those are the three core componentsfor people that are post-sale.
Yeah.
I'm amazed at,you know, we we talk to people
at the beginning rightwhen we do our estimate of value
and we say, nowgo talk to your wealth manager.
Go talk to your accountant,go talk to plan for this here
while we've told you what you're expectingbefore we get
(12:28):
and and and inadvertently people get busy.
Life happens.
Exiting a business is not without work.
And you're still running your company.
The conversations
prior to the EOF would be fabulous.
Have them have that set up beforecome to me and say, I have this trust.
(12:50):
Here's my plan.
That's fabulous.
Because once you start hitting the gas,so to speak, once you've got the Loi, once
due diligence is going to suckevery minute of your time.
And there's absolutely no way around that.
If you want to get across the finish line.
But I will remember very early onI was working with a client,
(13:14):
and he did not sit downwith his wealth manager until
three days before close.
And that's unfortunate.
And it was.
I'm expecting a very large check.
And it was the firstthe guy I'd ever heard of.
A very large check.
(13:35):
Well, you know, and that's the thing thatthat's that's my point.
Exactly. Right.
The advisor should know what's going on.
Should know where where is,
you know,how close are you to exiting the business?
What have you done so far?
Who have you been talking to.
(13:55):
What what's your team look like?
Exit planningis a interdisciplinary approach right?
Right. Requires that. Yeah.
You need there's coordinationfrom all aspects because there's
everything is, is is tied in together.
Right?
Everything that I do,everything that you do,
everything that accountants do, everythingthe attorneys do.
(14:15):
Right. It's it's all important.
And it all plays together.
And if the left hand is not awareof what the right hand is doing.
That's becomes difficult.
It becomes difficult.
We can still get you there,
but it may not be the same waythat we would have recommended.
Exactly.
You know, you, you know, you bring upa lot of really great points about,
(14:39):
what needs to happen early on.
The sooner the earlier, the better.
Right. Yeah.
And that's the way, you know, alot of what we do when we engage with
folks is really, you know, just start
getting started of saying, okay, let's,let's figure out what's going on.
Right.
Let's, let's take a, let's do a, a deep
dive of kind of where you are right nowwhere you're trying to get to.
(15:02):
What are your expectations of the future.
Right.
And both for you, me personallyand also for the business.
I can't really do a good jobof extrapolating out
what your personal financial planlooks like.
We don't know if you don't have clearfinancials and projections of what your
right look like,
because then you can't get an accurate
representationof what right is going to be.
(15:23):
And we can't get the
we can't, you know, get a properestimate of values for the different.
Right. Right. Right.
When 7,080% of your value of your wealth,your wealth,
your net worthis tied up in your business.
And we don't know what that is.
Yeah,that makes my job extremely difficult.
That's fair.
(15:44):
That's fair.
To really be able to present youwith clear options.
Right. Right.
And like you said, when that when thatretirement red zone hits, it's game on.
You know you can't. Right. Right.
You can't get it wrong. You. No.This time.
No. Nobody wants to exit their businessto go work at Walmart.
Well, being a greetersounds actually relaxing.
(16:05):
It does. Right?
It could, it could. You know, it's funny.
I have a client that, retired,
to become a, blackjack dealer.
Oh, okay.
That's interesting.
And it was awesome.
That's what I was like.
That's why. That's it.
(16:26):
Yeah. Yeah. If you love it.
Right.
Like, that's that's the ultimate goalis to end up doing what you love.
Just go hang out, do your cards.
That's okay.
I mean, at least you're not sitting atthe table the whole time spending money.
So it's definitely a better investment.
So I like the way you think.
(16:48):
So you have a special certification.
Tell us about that.
Yeah.
So like I said, you know,
exit planning is an was interdisciplinary,approach requires that.
And there is a ton of different
designations and
certifications having that
(17:10):
people can go for and look at
when I, when I was looking at,I'm a certified financial planner,
a certified investment manager analyst,and a certified private wealth advisor.
Those are the three core planning,and investment,
certification that I have
a couple of years ago.
I decided to progress further downinto specialization in the world of exit
(17:34):
planning and looking at a varietyof different, options.
I chose a certified exit planner Exp
designationfrom the Business Enterprise Institute by,
that one stood out
most to me above the certified ExitPlanning Advisor, the CPA,
and is another onethe CPC Certified Business Exec.
(17:56):
Coach I think it's coach.
And then
the CMA Certified Acquisition advisor.
Those are really focused on last year.
Definitely focused primarilyon the transaction side.
CPA is more focus
on, you know, implementing the valueacceleration method or value.
Yeah. So growing the business,
(18:16):
but the CFP really mimicked
the certified financial plannerdesignation of the CPA, the CFP.
So it was itwas, defined the repeatable process,
that tied personal about,the, the, the value of your business
to your, a merge, the value of your business thing,
(18:38):
the growth, the value of the businesswith your personal financial plans.
And it looked at all of the thingscombined.
So tax estatevalue valuation for your business,
obviously personal financesand, interests.
Okay. Looking at everything combined and
I really looked at that as saying
is that mimics taking elements from that
(19:02):
methodology.
And merging it into the certifiedFinancial Planner methodology
which would enhancewhat I'm doing right now.
I'm not I'm not doing valuations.
You don't want me doing valuations right.
I manage I'll do valuations right.
So I'm not doing valuations.
(19:22):
I, I am I don't know how to do itbut I'm doing it.
I got great partners like you for that.
Exactly.
We have the value drivers.
You talked about that a little bit.
Those are the the elements,the core elements of the business
and financial levers that you can pull onand adjust to
to enhance the value of the businessand make it more attractive to buyers.
(19:44):
Right.
Cleaning up financials was you know, andthen enhancing operational efficiency.
Things like that.
The metricsthat get you a better multiple.
That take time to put in place.
Those are value drivers right.
I'm not going to be sitting in yourin your office
and you know talking to your managersabout this.
But you can. Right.
I can you know that's what what
(20:06):
exit advantage.
Right. Exactly.
But the,the fact of the matter is of that me
having the expert experiencein, and knowledge and certification
of understanding exactly what it isthat you're doing and how you do it,
so that I can make sure that when clientsare having the conversation
(20:29):
and having conversations with clients,
these are the things that you needto really be focusing on.
I know it makes sense right now,but these are the things that are going
to drive the valueand prove the value of your business
to bot potential buyers in the future.
Here's what we need to workon. Let's get some.
Let me make some introductionsfor you. Right.
These are when we need to start
making the introductionsand formulating your team around you.
(20:52):
Right.
So that's, that's what this is all about.
You know and you know not for nothingthe other designations
and I is no, no slide any of the anybodywhere the other designations.
I've actually been thinkingabout getting these CPA as a follow on.
But,
we studied a couple of months,and you go to a conference
(21:12):
for a couple days,and you have your designation.
This exp
took about a year and a year,almost a year
and a half,to go through the entire process.
Okay.
It is a is a very lengthy,very time intensive, discipline.
And I felt aligned more
with my planning process.
(21:35):
Okay.
Sounds like you approach thingsvery holistically.
I know we're slightly limitedon, on investment strategy
conversations, because we don't wantto give unsolicited advice,
but, give us kind of an overview onif I'm going to work with you.
What iswhat am I going to feel is your focus?
(21:56):
So I think it's important to distinguishbefore between,
investment philosophy and investmentframework.
Okay. Right.
So the investment philosophy is sort ofyour core beliefs and your and your
driving force.
So how do you how do you what do you do?
What you what are your whatyour thought process around investing?
The framework is thinking is a structured
(22:19):
due process that you put in placeto implement those beliefs.
Okay.
You know,you're a you're a sports mom, right? Yep.
This analogy.
The philosophy,
the investment philosophy is likeyour coaching style, right?
Whereas the.
The your investment for your investmentphilosophy is like your coaching style,
(22:41):
whereas your investmentframework is more along
the lines of your practice regimenand your workouts.
Right. Okay.
What's your what's your playbook andwhat's your practice workouts look like.
All right for the team. Okay.
So those two things combined.
So my philosophy is that you have tohave a idea before you have clarity.
Clarity before you actually doanything, clarity before action.
(23:04):
And what that means is basicallyyou need to have a plan of what you're
trying to accomplish. Right.
You don't set outto, to go on a road trip
without planning outwhat you're going to be going.
Where are you going?
How are you going to getthere? Will brown sugar intake?
Because that way, you know,if you're going to be on time
or not to where you're trying to get to
the actual implementation method?
Now for me, I use this.
I use what we call advanced timesegmentation,
(23:27):
which is where we it'svery similar to the old bucket
theory, the original bucket theorythat you think of.
But this is where we have fiveseparate time segments
that are broken out for median income,
income over the next seven years,a balanced bucket
managing between balancingbetween income and long term growth.
And then that fourth, fourthand fifth bucket are pure long term growth
(23:49):
and then diversifiedand alternatives, for durable income.
Okay.
So the strategy once it's onceit's implemented
after the planning has been doneand the strategy is built,
it's all about making sure that the clienthas the right money in the right
buckets at the right time.
Makes sense.
(24:09):
So each of those bucketshave a specific place
and time again,if a client's way away from retirement,
the majority of their assetsare probably going to be in a
in the long term growthor balanced buckets.
Once they are sold their businessand they're living in retirement,
that's when we reallocateamongst the different buckets.
The different segmentsif you will, to then create
(24:31):
lifetime income income over the nextseven years, which again for to replenish
a balance again between the down
the income bucketand then the long term growth bucket.
And then in that when thosethose are two other two, it's like I like
I said, pure focus on on on growth versus
providing durable income throughdifferent market trends and conditions.
(24:53):
So that's the framework.
Again, a long winded answer.
That's okay.
The portfolio construction.
Now I'm a I'm a firm believer that,
the of assetallocation and diversification.
So what we do is we use low costETFs and funds
(25:13):
to build the baseline of the portfolio.
And then we layer on top of that highconviction,
active managers typically utilizingseparately managed accounts.
And then we put a moat aroundthat if you will, using Diversifier and
alternatives investments to really reducevolatility in the portfolio.
(25:35):
Excellent.
It's it's a, it's a build up of starting
from the beginning ofwhat are you trying to accomplish?
Okay.
How which, you know,time segments or buckets if you will.
We're going to allocate to.
And then how are thoseeach of those buckets built and developed.
And that's again through like I saidthe portfolio construction methodology.
(25:56):
Excellent.
And you go through these stepswith each of your clients.
It's the same thing. As soon
it's an issue youhave a lot of time on your hands or none.
That's the case.
Maybe everybody gets,everybody gets the same process.
For some it's, it's a little bit,it's more, the more intensive than others.
(26:16):
Right.
It really just depends on kindof what they're trying to accomplish.
Again, like I said, if someone's
ten, 15 years away from when they're goingto sell their business or transact.
Okay.
That's most likely going to bethe majority of that's going to be in
long term growth. Right.
So that's it'skind of easy at that point really.
Once you're about five years out
(26:37):
that's when you're looking at buildinga retirement income plan.
And you can't do thatwithout having a firm understanding
of what you're going to haveafter you exit through.
That's where that go.Time really starts to come in. Yeah.
And that's where, that'swhere the heavy lifting starts.
That come up again with making surethat we have a firm understanding of what
the value of the business is. Right.
(26:57):
And where are you trying to get it toso that you can retire,
sell a business, retireand then not run out of money?
Right. Let's sayand live the whole time. Exactly.
You know, in terms of we've been talkinga little bit in these about retirement,
and being able to make the choiceson what you have time to do,
whether it's supporta theater group, play in a band, you know,
(27:21):
go to play blackjack,or deal blackjack, actually.
So if you were not doing
this because you kind of got into itin a very roundabout way,
if you hadn't done wealth management,what would you be doing?
Great question.
So if I were to go backand do it all over again
(27:43):
and this route was not an option.
That'show I, that's why I hear that question.
I would be
I think I probably wouldeither end up as a
surgeon in private practice
or a chef.
Very different choices.
Although both use your hands.
(28:04):
Very good voice.
Very very use my hands.
I mean, the thingI'm an entrepreneur through and through.
That's my family background.
Growing up we had, you know, businesses.
So it'd be something that's going to bewhere I'm still a in in business.
Some of you will.
Hence the private practice.
Right.
But you know I, I look at and see what
(28:29):
a lot of my other types of clients do.
And it's fascinating to me.
And I think that's partof all part of the reason why it, it's
I gravitated to those individuals as well.
And then the flip side of it,I love to cook.
So I would say that, like I said,if I were, if I were to do this,
(28:50):
do it all over again, and this wasn'tan avenue, I'd probably end up as a chef.
So there's your retirement plan?
Yeah.
Let's say you you can hang up the wealthmanager hat and go to culinary school.
Well, I'm not I'mnot the average right advisor.
Thank you.
I'm not I don't I'm not a 65. I'm not 63.
No, you're not average.
I'm not a white man. So?
(29:11):
So I got plenty.
And that's okay.
And I know I retire, so, you know, that'sthat's the thing.
Yeah, I would, I would I really, really.
I think I might even do that.
Just sort of,you know, it would be fun to just
be formally trained, I guess, as a chef.
It's on my bucket list.
Yeah, I think that'd be pretty cool.
That's what I would definitely do.
(29:32):
Excellent.
I'll see you there.
Yeah, we'll go to culinary schooltogether.
Fantastic.
Great. Well, thank you so much for coming.
It's been goodgetting to know your practice more.
And, everybody should give you a call for.
Need you.
Thanks for having me.
This is awesome. You're welcome.
Meet. Him.
(29:59):
Maybe it.
Means we.
I've beendoing this, going on 15 years now.
(00:02):
Started in 2010, right out of school.
Actually, the summer of.
After I graduated,I taught tennis in the Hamptons, and,
ran into a one of my clients.
I'll see you in tennis, too.
He was, Marilyn's financial advisor.
And at the end of the summer, you know,he said to me,
hey, what are you gonna be doingfor the rest of your life?
(00:24):
You know, after the summer.
You know, you just want to be, to dotennis for the rest of your life, so I.
You know, I said, hey,I wanna do what you do.
I didn't know exactly what he did.
That made me do under $50 an hourto teach tennis,
his wife and his kids, and nice car and,you know, amazing house in the Hamptons.
I said, I want that.
So, I knew he worked at Marilyn's.
(00:47):
So I had a vague ideaof what he did for a living.
But long story short, he,went off to the court and came back,
slapped two grand, my hands and a glass.
You come to the office on Monday?
Yeah.That's how I got my foot in the door.
Marilyn, say, walk me in. And I was.
I introduced to the office manager,and he said, hey, this is a slow hiring.
And that'skind of how the interview started.
(01:09):
That's crazy.
That's a crazy inspirational story.
Do you still talk to him at all?
Every now and then.
You know, it's, he's a busy guy.
So, yes, he I and, so my so, you know, a
we've that's gone our different ways, but,
you know, we just kind of losttouch over the years. Yeah.
(01:31):
So it's such an inspirational beginningthough.
Yeah. Right.
It's it's really cool.
Interesting because I didn't havea traditional background.
I mean, I studied communicationsand economics in school.
I went to Wake Forest,but I had a tennis player. And.
Do you want an athlete?
Sports is a full time job, right?
Right. To the summers.
(01:52):
You're not doing internshipsand what have you.
And really training to come backand continue to play the next year.
So, once I went into the real world,
you know, it's a little differentfor a little bit, but.
Yeah.
for those of youjust joining us with Touchstone Talks.
I'm here with Carlos.
He's with Worcester Square as a partnerand wealth manager, and he's going to talk
(02:14):
to us a little bit about what he doesand how he works with his clients today.
May be.
I'm excited to be here.
Thank you for inviting me. Of course,of course.
Carlos and I kind of have worked togetheron exp for quite a while now.
(02:36):
Gotten to know each other.
Excellent resource.
Good person to call.
So what I hear a lot, though, with,
talking to our clientsis they have their guy.
They have their person.
So what makes somebody go
call you instead of their person?
(02:58):
Yeah. Great question.
It's a long one. It's going to be a long.
That's okay. It's okay.
It's funnybecause I read a McKinsey article
this morning about just about to me,it was highlighting two of the,
like, real big important issues in thewealth management industry going on today.
(03:19):
The first
being that there's an aging,advisor population.
Right.
So the average advisor in Americais a 63 year old white male.
Right.
Living a comfortable life
right after, businessin the wealth management space.
Nearing retirement and,
(03:40):
you know, quite more oftenthan not juggling too many relationships
to really give a high touch servicethat clients or to every single client
right outside of their top, top clientsor so.
The second thing that they had mentionedwas, the fact that there's been a
since there is a higher reliance on,
(04:01):
personal savings for retirement and,you know, not to mention
the proliferation of more complexand sophisticated investment options.
Folks today are looking for
there's a growing need for greater,
advice and guidance that is more holisticand more comprehensive.
(04:23):
Right.
So, those two factors
are leading to folksthat are leading to folks basically
being unhappyor having some level of ambivalence
with their existing advisor, primarily
because of the fact that they feel likethey're being underserved.
Okay.
(04:43):
One of the things that we're
that was also saying is in the inthe industry, in that in McKinsey article,
was that over the next seven years,a third of the financial advisors
that are in the businesstoday will not be will have retired.
Right.
So, that in the backdrop, inand of itself,
the main reason why people leave
one advisor to the next is service
(05:05):
makes sense, feel that they're gettingthe value of what they're paying for.
They don't feel like they're they'rethey're they're they're being underserved.
Right?
They there's some level of them underthey're being underserved.
I could say about 90% of my clients today
had a financial advisorbefore deciding to work with me.
So it's very few and far between that I am
(05:26):
the very first financial advisorthat somebody is working with more,
more often than not,it's it's we've had a conversation.
There was an issueat the time that they weren't happy with,
and they started to look elsewhere. Okay.
And once they start to see somebodythat has a more, tailored approach
to their specific need, then that'susually the catalyst for change.
(05:51):
Okay. It does, it does.
I actually I'm justsitting here thinking that
I don't know that I ever thought about
when I got a financial advisor,
right.
Like, I just got one. Yeah.
But I don't know that it was a marketexperience of the first financial advisor.
How how often do you run into somebodywhere you're the first financial advisor?
(06:13):
It's very rarely. It's very rare.
You know, the the two
main, client demographics are niches.
Each niche, niche.
The two primary client is clientsthat I work
with are, business owners and minorityphysicians.
Folks that are okay.
You, even even folks
(06:35):
that are comingor fresh out of residency and fellowship.
They have had some interactionwith a financial advisor.
Right? Yeah.
Tip or somebody,I should say that considers himself
to be a financial advisor,whether that's, their insurance
person that's selling themdisability and life insurance.
They've had some interactionbefore in the past, and that's that is,
(06:58):
that's usually the
case is that it's I'mnot the first person.
Yeah.
And very rarely to I mean, we're talkingabout exit planning and exit exit.
You know, business owners
that are exiting, any business ownerwith some stature of wealth
and obviously success has an advisor.
Yeah.
Well, and now you have, at least in the state of Connecticut,
they have, you know, ready made plansthat you can send your people to
(07:22):
to go get the equivalent of a 401K from the state.
Yeah. My CT saves.
So, so they've got at leastthat in place.
They've got something in place.
I can be better. But yeah.
Correct.
So talk to me.
I work with business owners.You work with business owners?
Tell me how you work with a businessowner.
(07:44):
Well, it really depends on where they arein their journey, right?
If they're five yearsor more away from their exit.
We are really
focusing on what I like to call ownerbased financial planning.
You know, take a step back.
I'm a wealth manager, so investing money,managing investments
(08:04):
is what I do as a core.
What I do all day every day. Right.
So for function,
an equally important function of,of what we do is financial planning.
And specifically for business owners.
Owner based financial planning.
So if they're five years away or more fromfrom from exiting, we're really focusing
on, de-risking their finances,improving cash flows.
(08:27):
And, and growth, both for the value.
And again, I'm doing the planning.
I'm coming to folkslike you to do the execution.
Right.
So, that's the core function there.
And then, you know, the third componentof, of when they're that far away from,
from an exit is really focusing on howcan we set them up for a successful exit.
(08:47):
What are the strategies that we needto put in place, or can we put in place
and start to, you know, which partnerscan we start to.
On to to get involved.
If they're within that five year timeframe that's go time.
Right. Right.
You really need to be workingwith a strong team of advisors
that have had experience doing this right.
This is going to be has the potentialto be one of the most single,
(09:11):
you know, the most critically importantfinancial event of their life.
Do you find that when you're lookingat their financial plan,
is most of their retirementcoming from exiting their business?
Absolutely.
The vast majority of their wealthis tied up in their business.
And again, it's, you know,going back to what I was saying before
about the busy averagefinancial advisor, right, in America.
(09:33):
A lot of business owners will havea couple hundred thousand dollars,
maybe half a million bucks,a little bit under a million maybe.
I mean, in a brokerage account.
Maybe a little bit IRA here and there orif they're, you know, if they're advisors
good enough and they work with them,they maybe have set up A41K plan for them.
But that's it. Right.
And that successful financial advisorthat's been in the business for
(09:56):
2530 plus years.
What's the likelihood of that individualthat that business owner
of being one of their top clientsand getting that white glove service
that they need, thatthey that they need and want and deserve?
Probably not there. Right.
So what we found is that, you know, folks
sell their business, you know, for five,ten, $15 million.
It happens more often than not.
(10:19):
So the majority of their wealth is tied upin their business and rightfully so.
That's that's where they've reinvestedall their time effort.
You know blood sweat and tears.
And that's kind ofwhat ends up happening. Right.
So if there is not a strong alignmentbetween
their long term personal financial goalsand the value of their business,
(10:40):
maximizing the valueand minimizing tax surprises,
if that's not part of the process,you're not really getting what you need.
Make sense?
Make sense? We hear it all the time.
Business owners don't typically love
to pay out the taxeson what they just took in.
They want options.
(11:00):
Options don't get set up instantaneously.
It takes time.
You've got to set them up overtime. Exactly.
I mean, there's there's you.
And I think you know about this,too, right?
I mean, obviously there'semergency planning, right?
If you get somebody you oh I, I, I,you know I got a,
I got an unsolicited offer yesterdayI said no why I like let's, let's move.
Let's move, let's move.
(11:22):
You have optionscertain things you can do.
But the more time you have to plan,the more arrows
you have in your quiver,the more options you have, right?
Your disposal.
Right.
The more time you have to implementthose value drivers
to enhance your business value.
And, and, and, and make your businessmore attractive to buyers.
Right. Right.
You know it's more time is better.
(11:45):
But you know depending uponwhere like I said, depending upon
where the client is in their journey,
we can, we, we
can work together in a variety of ways.
Early on in that red zone crunch timeand then also
setting them up in the futureif it's post-sale.
Right.
Investing smarter,optimizing income and reducing taxes.
(12:06):
Those are the three core componentsfor people that are post-sale.
Yeah.
I'm amazed at,you know, we we talk to people
at the beginning rightwhen we do our estimate of value
and we say, nowgo talk to your wealth manager.
Go talk to your accountant,go talk to plan for this here
while we've told you what you're expectingbefore we get
(12:28):
and and and inadvertently people get busy.
Life happens.
Exiting a business is not without work.
And you're still running your company.
The conversations
prior to the EOF would be fabulous.
Have them have that set up beforecome to me and say, I have this trust.
(12:50):
Here's my plan.
That's fabulous.
Because once you start hitting the gas,so to speak, once you've got the Loi, once
due diligence is going to suckevery minute of your time.
And there's absolutely no way around that.
If you want to get across the finish line.
But I will remember very early onI was working with a client,
(13:14):
and he did not sit downwith his wealth manager until
three days before close.
And that's unfortunate.
And it was.
I'm expecting a very large check.
And it was the firstthe guy I'd ever heard of.
A very large check.
(13:35):
Well, you know, and that's the thing thatthat's that's my point.
Exactly. Right.
The advisor should know what's going on.
Should know where where is,
you know,how close are you to exiting the business?
What have you done so far?
Who have you been talking to.
(13:55):
What what's your team look like?
Exit planningis a interdisciplinary approach right?
Right. Requires that. Yeah.
You need there's coordinationfrom all aspects because there's
everything is, is is tied in together.
Right?
Everything that I do,everything that you do,
everything that accountants do, everythingthe attorneys do.
(14:15):
Right. It's it's all important.
And it all plays together.
And if the left hand is not awareof what the right hand is doing.
That's becomes difficult.
It becomes difficult.
We can still get you there,
but it may not be the same waythat we would have recommended.
Exactly.
You know, you, you know, you bring upa lot of really great points about,
(14:39):
what needs to happen early on.
The sooner the earlier, the better.
Right. Yeah.
And that's the way, you know, alot of what we do when we engage with
folks is really, you know, just start
getting started of saying, okay, let's,let's figure out what's going on.
Right.
Let's, let's take a, let's do a, a deep
dive of kind of where you are right nowwhere you're trying to get to.
(15:02):
What are your expectations of the future.
Right.
And both for you, me personallyand also for the business.
I can't really do a good jobof extrapolating out
what your personal financial planlooks like.
We don't know if you don't have clearfinancials and projections of what your
right look like,
because then you can't get an accurate
representationof what right is going to be.
(15:23):
And we can't get the
we can't, you know, get a properestimate of values for the different.
Right. Right. Right.
When 7,080% of your value of your wealth,your wealth,
your net worthis tied up in your business.
And we don't know what that is.
Yeah,that makes my job extremely difficult.
That's fair.
(15:44):
That's fair.
To really be able to present youwith clear options.
Right. Right.
And like you said, when that when thatretirement red zone hits, it's game on.
You know you can't. Right. Right.
You can't get it wrong. You. No.This time.
No. Nobody wants to exit their businessto go work at Walmart.
Well, being a greetersounds actually relaxing.
(16:05):
It does. Right?
It could, it could. You know, it's funny.
I have a client that, retired,
to become a, blackjack dealer.
Oh, okay.
That's interesting.
And it was awesome.
That's what I was like.
That's why. That's it.
(16:26):
Yeah. Yeah. If you love it.
Right.
Like, that's that's the ultimate goalis to end up doing what you love.
Just go hang out, do your cards.
That's okay.
I mean, at least you're not sitting atthe table the whole time spending money.
So it's definitely a better investment.
So I like the way you think.
(16:48):
So you have a special certification.
Tell us about that.
Yeah.
So like I said, you know,
exit planning is an was interdisciplinary,approach requires that.
And there is a ton of different
designations and
certifications having that
(17:10):
people can go for and look at
when I, when I was looking at,I'm a certified financial planner,
a certified investment manager analyst,and a certified private wealth advisor.
Those are the three core planning,and investment,
certification that I have
a couple of years ago.
I decided to progress further downinto specialization in the world of exit
(17:34):
planning and looking at a varietyof different, options.
I chose a certified exit planner Exp
designationfrom the Business Enterprise Institute by,
that one stood out
most to me above the certified ExitPlanning Advisor, the CPA,
and is another onethe CPC Certified Business Exec.
(17:56):
Coach I think it's coach.
And then
the CMA Certified Acquisition advisor.
Those are really focused on last year.
Definitely focused primarilyon the transaction side.
CPA is more focus
on, you know, implementing the valueacceleration method or value.
Yeah. So growing the business,
(18:16):
but the CFP really mimicked
the certified financial plannerdesignation of the CPA, the CFP.
So it was itwas, defined the repeatable process,
that tied personal about,the, the, the value of your business
to your, a merge, the value of your business thing,
(18:38):
the growth, the value of the businesswith your personal financial plans.
And it looked at all of the thingscombined.
So tax estatevalue valuation for your business,
obviously personal financesand, interests.
Okay. Looking at everything combined and
I really looked at that as saying
is that mimics taking elements from that
(19:02):
methodology.
And merging it into the certifiedFinancial Planner methodology
which would enhancewhat I'm doing right now.
I'm not I'm not doing valuations.
You don't want me doing valuations right.
I manage I'll do valuations right.
So I'm not doing valuations.
(19:22):
I, I am I don't know how to do itbut I'm doing it.
I got great partners like you for that.
Exactly.
We have the value drivers.
You talked about that a little bit.
Those are the the elements,the core elements of the business
and financial levers that you can pull onand adjust to
to enhance the value of the businessand make it more attractive to buyers.
(19:44):
Right.
Cleaning up financials was you know, andthen enhancing operational efficiency.
Things like that.
The metricsthat get you a better multiple.
That take time to put in place.
Those are value drivers right.
I'm not going to be sitting in yourin your office
and you know talking to your managersabout this.
But you can. Right.
I can you know that's what what
(20:06):
exit advantage.
Right. Exactly.
But the,the fact of the matter is of that me
having the expert experiencein, and knowledge and certification
of understanding exactly what it isthat you're doing and how you do it,
so that I can make sure that when clientsare having the conversation
(20:29):
and having conversations with clients,
these are the things that you needto really be focusing on.
I know it makes sense right now,but these are the things that are going
to drive the valueand prove the value of your business
to bot potential buyers in the future.
Here's what we need to workon. Let's get some.
Let me make some introductionsfor you. Right.
These are when we need to start
making the introductionsand formulating your team around you.
(20:52):
Right.
So that's, that's what this is all about.
You know and you know not for nothingthe other designations
and I is no, no slide any of the anybodywhere the other designations.
I've actually been thinkingabout getting these CPA as a follow on.
But,
we studied a couple of months,and you go to a conference
(21:12):
for a couple days,and you have your designation.
This exp
took about a year and a year,almost a year
and a half,to go through the entire process.
Okay.
It is a is a very lengthy,very time intensive, discipline.
And I felt aligned more
with my planning process.
(21:35):
Okay.
Sounds like you approach thingsvery holistically.
I know we're slightly limitedon, on investment strategy
conversations, because we don't wantto give unsolicited advice,
but, give us kind of an overview onif I'm going to work with you.
What iswhat am I going to feel is your focus?
(21:56):
So I think it's important to distinguishbefore between,
investment philosophy and investmentframework.
Okay. Right.
So the investment philosophy is sort ofyour core beliefs and your and your
driving force.
So how do you how do you what do you do?
What you what are your whatyour thought process around investing?
The framework is thinking is a structured
(22:19):
due process that you put in placeto implement those beliefs.
Okay.
You know,you're a you're a sports mom, right? Yep.
This analogy.
The philosophy,
the investment philosophy is likeyour coaching style, right?
Whereas the.
The your investment for your investmentphilosophy is like your coaching style,
(22:41):
whereas your investmentframework is more along
the lines of your practice regimenand your workouts.
Right. Okay.
What's your what's your playbook andwhat's your practice workouts look like.
All right for the team. Okay.
So those two things combined.
So my philosophy is that you have tohave a idea before you have clarity.
Clarity before you actually doanything, clarity before action.
(23:04):
And what that means is basicallyyou need to have a plan of what you're
trying to accomplish. Right.
You don't set outto, to go on a road trip
without planning outwhat you're going to be going.
Where are you going?
How are you going to getthere? Will brown sugar intake?
Because that way, you know,if you're going to be on time
or not to where you're trying to get to
the actual implementation method?
Now for me, I use this.
I use what we call advanced timesegmentation,
(23:27):
which is where we it'svery similar to the old bucket
theory, the original bucket theorythat you think of.
But this is where we have fiveseparate time segments
that are broken out for median income,
income over the next seven years,a balanced bucket
managing between balancingbetween income and long term growth.
And then that fourth, fourthand fifth bucket are pure long term growth
(23:49):
and then diversifiedand alternatives, for durable income.
Okay.
So the strategy once it's onceit's implemented
after the planning has been doneand the strategy is built,
it's all about making sure that the clienthas the right money in the right
buckets at the right time.
Makes sense.
(24:09):
So each of those bucketshave a specific place
and time again,if a client's way away from retirement,
the majority of their assetsare probably going to be in a
in the long term growthor balanced buckets.
Once they are sold their businessand they're living in retirement,
that's when we reallocateamongst the different buckets.
The different segmentsif you will, to then create
(24:31):
lifetime income income over the nextseven years, which again for to replenish
a balance again between the down
the income bucketand then the long term growth bucket.
And then in that when thosethose are two other two, it's like I like
I said, pure focus on on on growth versus
providing durable income throughdifferent market trends and conditions.
(24:53):
So that's the framework.
Again, a long winded answer.
That's okay.
The portfolio construction.
Now I'm a I'm a firm believer that,
the of assetallocation and diversification.
So what we do is we use low costETFs and funds
(25:13):
to build the baseline of the portfolio.
And then we layer on top of that highconviction,
active managers typically utilizingseparately managed accounts.
And then we put a moat aroundthat if you will, using Diversifier and
alternatives investments to really reducevolatility in the portfolio.
(25:35):
Excellent.
It's it's a, it's a build up of starting
from the beginning ofwhat are you trying to accomplish?
Okay.
How which, you know,time segments or buckets if you will.
We're going to allocate to.
And then how are thoseeach of those buckets built and developed.
And that's again through like I saidthe portfolio construction methodology.
(25:56):
Excellent.
And you go through these stepswith each of your clients.
It's the same thing. As soon
it's an issue youhave a lot of time on your hands or none.
That's the case.
Maybe everybody gets,everybody gets the same process.
For some it's, it's a little bit,it's more, the more intensive than others.
(26:16):
Right.
It really just depends on kindof what they're trying to accomplish.
Again, like I said, if someone's
ten, 15 years away from when they're goingto sell their business or transact.
Okay.
That's most likely going to bethe majority of that's going to be in
long term growth. Right.
So that's it'skind of easy at that point really.
Once you're about five years out
(26:37):
that's when you're looking at buildinga retirement income plan.
And you can't do thatwithout having a firm understanding
of what you're going to haveafter you exit through.
That's where that go.Time really starts to come in. Yeah.
And that's where, that'swhere the heavy lifting starts.
That come up again with making surethat we have a firm understanding of what
the value of the business is. Right.
(26:57):
And where are you trying to get it toso that you can retire,
sell a business, retireand then not run out of money?
Right. Let's sayand live the whole time. Exactly.
You know, in terms of we've been talkinga little bit in these about retirement,
and being able to make the choiceson what you have time to do,
whether it's supporta theater group, play in a band, you know,
(27:21):
go to play blackjack,or deal blackjack, actually.
So if you were not doing
this because you kind of got into itin a very roundabout way,
if you hadn't done wealth management,what would you be doing?
Great question.
So if I were to go backand do it all over again
(27:43):
and this route was not an option.
That'show I, that's why I hear that question.
I would be
I think I probably wouldeither end up as a
surgeon in private practice
or a chef.
Very different choices.
Although both use your hands.
(28:04):
Very good voice.
Very very use my hands.
I mean, the thingI'm an entrepreneur through and through.
That's my family background.
Growing up we had, you know, businesses.
So it'd be something that's going to bewhere I'm still a in in business.
Some of you will.
Hence the private practice.
Right.
But you know I, I look at and see what
(28:29):
a lot of my other types of clients do.
And it's fascinating to me.
And I think that's partof all part of the reason why it, it's
I gravitated to those individuals as well.
And then the flip side of it,I love to cook.
So I would say that, like I said,if I were, if I were to do this,
(28:50):
do it all over again, and this wasn'tan avenue, I'd probably end up as a chef.
So there's your retirement plan?
Yeah.
Let's say you you can hang up the wealthmanager hat and go to culinary school.
Well, I'm not I'mnot the average right advisor.
Thank you.
I'm not I don't I'm not a 65. I'm not 63.
No, you're not average.
I'm not a white man. So?
(29:11):
So I got plenty.
And that's okay.
And I know I retire, so, you know, that'sthat's the thing.
Yeah, I would, I would I really, really.
I think I might even do that.
Just sort of,you know, it would be fun to just
be formally trained, I guess, as a chef.
It's on my bucket list.
Yeah, I think that'd be pretty cool.
That's what I would definitely do.
(29:32):
Excellent.
I'll see you there.
Yeah, we'll go to culinary schooltogether.
Fantastic.
Great. Well, thank you so much for coming.
It's been goodgetting to know your practice more.
And, everybody should give you a call for.
Need you.
Thanks for having me.
This is awesome. You're welcome.
Meet. Him.
(29:59):
Maybe it.
Means we.
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Gregg Rosenthal and a rotating crew of elite NFL Media co-hosts, including Patrick Claybon, Colleen Wolfe, Steve Wyche, Nick Shook and Jourdan Rodrigue of The Athletic get you caught up daily on all the NFL news and analysis you need to be smarter and funnier than your friends.