Hannah: Well, thanks so much for joining us today, Blair.
Blair: Thank you for having me.
Hannah: How did you get started in financial planning?
Blair: I first started in investments and about five and a half years into my career at a brokerage firm, it was 2009, and I was laid off. I was introduced to a financial planning firm by a mutual fund wholesaler who covered both the brokerage firm and the RIA, and that introduction led to a position. I was finishing my CFA charter at the time and learning financial planning from this firm and quickly took the CFP and have been a financial planner ever since. That was in 2010.
Hannah: Let’s talk about the brokerage firm that you were at. For a lot of the listeners who might not know what that means, can you tell them like what is a brokerage firm and what was your day to day like?
Blair: Sure. Brokerage firm, the biggest ones, the warehouses I was at UBS. Merrill Lynch is another one, Morgan Stanley, they’ve all merged. There used to be a lot more names. But a brokerage firm is a firm where advisors are registered representatives, and they are licensed to sell investment products to their clients. On the surface, it may look a lot like an RIA in that they’re giving advice to their clients, and they’re implementing potentially financial plans. There are CFPs who work in brokerage firms, but it is a business model that is based on commissions and production of fees from their clients.
Hannah: So you worked at UBS for those years, for almost five, you said five years?
Blair: Five and a half, yeah.
Hannah: Five and a half years, and so then you started working … So you’re laid off, you’re working at a financial planning firm. Were you looking for financial planning or did you kind of stumble upon it?
Blair: I stumbled upon it. It was a wonderful happenstance that I was introduced to Wealthstream Advisors, which is an RIA in Manhattan, and joined on with them and started learning financial planning. In my time at UBS, I had run financial plans through an early iteration of MoneyGuidePro, which the brokers at UBS had access to. I had some understanding of what financial planning was, but I would say it was on a very superficial level. So the happenstance of being introduced through this mutual fund wholesaler to this firm is really how I became a financial planner.
Hannah: When did you notice the difference between the two firms? Like after you started working for this new financial planner, what tipped you off that there was something different?
Blair: The first tip was in the interview process when they told me that I was going to lose my Series 7 license. That was a big shocker at first. I didn’t understand what that meant or why I wasn’t able to keep my license. Series 7 was a difficult test. It took me, it’s a six hour all day test, and I couldn’t fathom the fact that I would be giving that up by joining this firm.
That was the first tip off. Then from day one of joining the firm, I knew that it was not going to be a problem for me. I knew that I never wanted to go back to being a licensed registered rep, that I really enjoyed the process of being on the same side of the table as the client, and not looking at the client as a way to increase production or fees, but looking at the client as someone who I’m being paid to give advice to.
While on the surface for the client, it looks very similar from one business model to the other, I immediately felt the difference from the moment I walked in the door. Even in the interview process, I could tell that this was a completely different business model. I had never heard of the term RIA. I didn’t even know what it meant, so it was very interesting that all this sort of happened to me by luck and chance. I’m very glad that it did, because my career has only been on an upward trajectory since that day.
Hannah: You are at Wealthstream Advisors, and so that’s where you got introduced to the CFP exam and kind of that world. That’s where you got introduced to the CFP exam, right?
Blair: Correct. They quickly asked me to take the CFP. I joined Wealthstream in July of 2009. I had just finished level three of the CFA exam that June, and they said, “What do you think about taking the CFP?” I said, “Wow, I just finished all three levels of the CFA exam,” taking level three twice, by the way. I said, “Okay, I think I can do it.”
Luckily, I was able to be exempt from the education requirement for CFP, so I was able to just study for the exam and take it. That’s what I did. I took a few months off, and I ended up studying for the exam and taking it in March of 2010 and luckily passed, and I’ve been a CFP certificate ever since.
Hannah: Did you feel like the CFP exam gave you what you needed, or did you feel like you already had a lot of that information already with the CFA and kind of your previous background?
Blair: No. The CFA only covers investment related topics, and so while I had a huge leg-up on any of the investment related portion of the CFP exam, I had to learn a much broader array of information about financial planning. The hardest parts for me were insurance. I don’t come from an insurance background. It’s still confusing for me. Tax was also very hard.
I always say that the CFA exam is very deep and difficult from an investment standpoint, and the CFP exam is difficult because it’s so broad and it may not go as deep as the CFA, but the difficulty is having to study such a broad array of topics. Of course, I would still say that the CFA exam is much more difficult and rigorous process, but the CFP really does give you that broad array of topics that you need to be a financial planner.
Hannah: I worked at a brokerage dealer for a while, and they said they did financial planning, like it was kind of like back of the envelope type stuff, where they just have the conversations about insurance or about whatever it may be. Did you find that at UBS? Were you having … Were clients gravitating towards financial planning conversations?
Blair: The way that I used financial planning software at UBS was a way to sell the asset allocation recommendation. We would put in a minimum amount of information about the client, and the whole purpose of it was as sort of a back tool to confirm the asset allocation that was being recommended. I was really fortunate to always work with advisors at UBS who were creating asset allocation models of different managers for their clients.
They weren’t necessarily doing one-off stock picking or bond sales. They really were looking at full portfolio asset allocation. The financial plan was sort of a superficial, is almost not fair because we are talking about 2005, far back as that. But it was a simple way to confirm the investment allocation that was being sold to the client.
Hannah: Thank you for kind of going into all of that. I know sometimes defining what is financial planning and what is not financial planning I think is a really important conversation, and one that’s hard to define if you haven’t kind of lived in both worlds.
Blair: I agree.
Hannah: Yeah. You’re at Wealthstream Advisors, what was your next professional step?
Blair: I would still be at Wealthstream Advisors today if I had not met my husband, so it was sort of a life event. My husband is a native New Orleanian and lives in New Orleans, and after we met I made the decision to move down because although it was not an easy transition for me, it was easier for me to move to New Orleans than for him to try to move to New York. That is really the only reason I’m not still at Wealthstream Advisors.
I moved to New Orleans in January of 2011, and did not immediately have a job. In fact, surveyed the landscape of registered investment advisory firms in New Orleans, talked to what I thought was almost all of them and didn’t find a spot for myself. So I made the decision to go out on my own and try to build a book of clients from scratch. I wanted to replicate the Wealthstream model where I was doing both asset management and financial planning.
I partnered with a very small fee-only RIA in New Orleans at first because I was afraid of the setup of a firm. I didn’t understand what it took to register an RIA, and so I partnered first with a small RIA and then eventually went out and ended up creating my own firm a couple of years later.
Hannah: Can you tell me more of that process and what that looked like for you? Was it something that you … Did you know you wanted to be on your own, like be the entrepreneur or was it more of just there weren’t jobs to be had?
Blair: It was more there weren’t jobs to be had. I really prefer working with a team, and we can explain how I ended up at ThirtyNorth Investments later, but it was really that I wasn’t finding a home in New Orleans for what I wanted to do, which was to provide investment and financial planning advice for a fee. I just didn’t find a firm.
Most of the firms here are lifestyle practices or practices where there’s multiple family members, and they’re really just looking for support staff. So the reason I ended up founding my own firm was because I just wasn’t finding other opportunities in New Orleans. The process of registering my RIA, which was called Ignite Investments and Planning, and it was back in 2013 the only financial planning and investment advisory firm focused specifically on Gen X and Gen Y clients.
That process was … I mean, the paperwork was really easy. The hard part is acquiring clients. I am not a natural salesperson. I’m an introvert, and so my real challenge was trying to get from zero revenue up to a revenue that actually paid me any sort of salary at all.
Hannah: Were you able to find success like with the finding clients and developing that out?
Blair: I did have a small amount of success. I didn’t give it enough time, and the only reason for that is because not too long after I finally set up Ignite Investments and Planning and was kind of moving along with the digital marketing strategy, ThirtyNorth Investments called me. Their founder and CIO was leaving the firm, and they were looking for a new CIO and it was an opportunity with a team that I really respected. So it was almost too good to be true, and so I ended up taking my clients and moving to ThirtyNorth Investments.
That’s been four years now. I kind of went through two and a half years of a slog, never really got over the hump, but I just don’t think I had been doing it long enough to know if I was going to succeed or fail, and this opportunity to join ThirtyNorth came along. I’m very glad it did, because I really like working in a team environment.
Hannah: Did you work in team environments in the past?
Blair: Yes. At UBS, I was always on teams and of course at Wealthstream it was a one firm, one team solution so absolutely, I’ve always worked in teams. That was really a couple of years there where I was working on my own. It was sometimes working out of my home, which was not for me and then other times working out of co-working spaces, which was a little better but I was still working alone. I didn’t prefer it. It wasn’t for me.
Since I’ve been at ThirtyNorth, I’ve become a better planner, a better investor, a better … I’m a chief compliance officer, all because of the team environment and my team members asking questions and pushing me to go further and stretch the limits of my comfort zone and abilities. That’s where I really prefer to work is in a team environment.
Hannah: I talk with a lot of young planners, and some of them, there’s a lot of tension and conflict within their teams and where they’re working. What specifically about your teams or kind of how you approach your teams has made that a really successful place for you?
Blair: It’s really about getting in the right team. Team dynamics, it’s very important to understand that you have diversity of skillset, diversity of thought. Then you need buy-in from your team members of what you’re trying to accomplish, that you’re all on board with wanting to accomplish the same things, that you have the same values. That’s extremely important.
I think when people are feeling tension within a team, it’s probably that they’re on the wrong team. I’ve been in that situation. It’s not fun. It doesn’t mean that everything is utopia when you’re on the right team. You’re still going to have differences of opinion and situations that come up where you’re not always on agreement with each other, and that’s a good thing. You’re not supposed to have group think.
But I would just say to be patient and give it time and give your career time, because one of the things that to become a financial planner you need to do is to learn from others. Sometimes you might have to learn from others on not the best team. So I would just not spend too much of your effort worrying about the tensions of who you’re working with, especially if you’re a young planner.
Hannah: You talked about making sure that you had the same values and the same vision as your team. Did you have that sense throughout your entire career path or was that obvious? I mean, we assume it’s going to evolve, but kind of where did you start or what were the places that you went to, to really identify that vision and the values that you had as a planner?
Blair: I think I didn’t give a lot of thought to values when I first started my career. I have said in other forums and I’m embarrassed to say that what interested me about a career in finance was the kind of rah-rah competitive, go make money nature that was sometimes personified in movies. I didn’t enter this business necessarily with the right intentions and over time, I’ve just come to see I’ve been inside the sausage factory, I know what the wrong incentives can do, the client situations that can arise from being in a high sales based environment.
It was really my transition out of the brokerage firm into an RIA firm where I started to think about values and what mattered to me, an integrity and dedication to lifelong learning and all the things that the team at ThirtyNorth were all in agreement on. I would just say that that sort of evolved over time.
I graduated college. I was a magna cum laude with honors. I thought this is great. I’m ready to go out in the world and run things, and then boom, my first job is sales assistant at a brokerage firm where I’m taking messages and binding presentations. That was a real hard stop for me to start like that. So I really wasn’t thinking at that time about what my values were. I think that really came with time and with maturity into becoming a professional.
Hannah: One of the things you talked about is this idea of lifelong learning. What does that look like for you? What have been … Obviously you got the CFA, the CFP, is it just like the continuing education for those elements or where do you find yourself continuing to learn?
Blair: Yeah. If I didn’t need to be out in the world making money and earning a living for my family and myself, I would just basically go to school all the time. I love learning. Once I was done with the CFA and the CFP I said, okay I don’t have to prove to anyone else that I can take tests. I don’t need to take any more tests, but the investment profession, the financial planning profession, they’re not stopping with what I learned in my textbooks.
New textbooks are being written. New research is being done. So in order to keep up my skills as a financial planner and an investment advisor, I have to keep learning. Part of that is continuing education, another part of it though right now is I’m pursuing a master’s in financial planning. You would think that the CFP was enough. I just decided I wanted to get a master’s in financial planning. If I had all the time in the world, I would love to do a PhD in finance.
I enjoy learning. One of my personal goals is also at some point to become bilingual. We’ll see if I ever get around to that. A couple of us here at the CFA Society Louisiana were also interested in taking the sommelier exam, which is the one the people at the restaurant that recommend wines. The sommelier exam is probably the only exam in the world that has a lower pass rate than the CFA, so we’re kind of Type A in that way.
Blair: But I just love learning, and so it’s a huge part of my dedication to being a professional and making sure that I keep up with the subjects as people continue to write papers and add to the knowledge base.
Hannah: Do you find yourself writing a lot?
Blair: I wish I had more time to write. Writing is an excellent way to learn. I have committed to writing our quarterly letter here at the firm, so once a quarter I write a market commentary. I’m also committed to writing one blog post a month, which sounds really sad but when you think that there are four of us doing it, we are blogging on our website at least once a week it’s not enough. I wish I wrote more.
I enjoy it. I sometimes have to force it though because I can really easily find myself trying to write something and then looking over at whatever the latest news is on Twitter or getting distracted in some other way. I really do have to force myself to write. I think it is a skill. I’ve talked to some of the more prolific writers out there and they say once you just get used to writing something every day or multiple times a day, you get better at it. So I would love to increase my skills in that way, so maybe next year.
Hannah: Let’s talk about Twitter, because you’re really active on Twitter. How did you get started in that space?
Blair: When I moved to New Orleans and I was out on my own for the first time with zero clients, and had never really sold before. I was always in a support capacity at the brokerage firm and at Wealthstream, I was looking for ways to basically confirm that I knew what I was talking about. I was also still under 30 at that time. I thought no one is ever going to give me the benefit of the doubt because of my age. I couldn’t wait to turn 30 so at least I would be 30 so that might seem a little more confirming to people.
I really struggled with what I called reverse ageism when I was younger, which really I just needed to be more patient. Anyway, in 2011 when I moved to New Orleans, I was blogging and so I had heard about Twitter and opened a Twitter account and started sharing when I was writing and then realized that Twitter was so much more than just a place to post your own information.
It was a way to connect with other advisors. It was a way to follow news more efficiently because you can follow the actual reporters instead of the publications that they work for, and just started connecting into a community there and really started using Twitter as a tool to be my morning newsfeed. It’s amazing the things that I’ve done on Twitter.
I always tell this story. I was back in New York visiting a friend one weekend and I wanted to go to a concert and I just kind of put it out on Twitter, “Hey, this concert is sold out. Does anybody know anybody who has tickets?” I linked this ticket account and they reposted it, and within like 30 minutes I had somebody saying, “I’m going to meet you out front and I’m just going to give you three tickets.”
So I ended up getting free tickets to a sold out concert because of Twitter. So Twitter is the most amazing communication tool, a way to really connect with so many different types of communities. I call myself a little bit of a Twitter evangelist because of that, because not only has it helped me meet other people, I’ve been asked to speak at conferences. I’ve been asked to be quoted in publications. I’ve created relationships with reporters, where I can be experts for them. It’s really opened doors for me in such an amazing way that I can’t suggest more to people to just give it a try, because it’s amazing.
Hannah: That’s really neat. It’s so funny to me, but advisors really love Twitter. It’s one of the most active places that I found.
Blair: Yeah, they do. I think there’s probably all these other pockets of Twitter, which are really even more amazing and other communities that we don’t even know of, because we’re not looking there. I suspect that there’s probably some really unbelievable things going on, on Twitter if you’re in different communities. But yeah, the advisor community is one of those sub-communities which is just really amazing.
Hannah: That’s great. It’s obviously helped with kind of building those relationships with reporters and things like that, but from a career standpoint, you’re speaking in conferences and I guess that does help your career. Have you found it helped with your relationship with clients and kind of the actual product of financial planning?
Blair: People always ask me do you ever get clients from Twitter? I would always say not directly. My experience with client lead generation and referrals has always been introductions through networks. Any time I’ve ever had somebody call me just off the internet and come in and want to meet, they just don’t become clients. I don’t know what it is. I know other planners and advisors have tremendous success, I just haven’t seen it as sort of a lead generation tool.
But what it is, what your online presence is, is a confirmation because most clients today are going to Google you before they even pick up the phone to call you or schedule a meeting. All of this online presence is a way to confirm to prospects that you are legitimate and that you are a thought leader really. I don’t have any way of connecting it with the business, but I will tell you that I’ve had some really interesting just anecdotal situations.
There’s an individual who works in my office building who is a prospect right now, and I’ve been walking out of the office and had a comment, “Oh, have fun in Denver.” I look up and I’m like, “Okay, thank you. How do you know about that?” That’s because of Twitter, because I had just wrote, “I’m out of here, going on vacation,” and tweeted that. I know people are following me, and so I think it’s added there, but I just don’t have a way of quantifying it in a way that maybe some other planners and advisors do.
Hannah: So building your presence online, so you started when you were kind of out on your own looking for a job, but you have been able to continue it while you’re working for somebody else. Have there been compliance issues or kind of what from the employer, employee relationship has that been like?
Blair: I’m really lucky in that I’m at a small firm. We don’t have entrenched ideas about many things at all. We have a social media policy that we all adhere to. We review every year what our policy is and what we’re agreeing to not put on the internet. There’s a leniency there that may not exist at a larger, more not established is not the right word, but a firm that already has a lot of processes in place.
If we grow and add more people, we will probably have to think about what our social media policy is. But right now it just happens to work. We haven’t had any issues with employees posting inappropriate things on social media. So it’s working for now, and hopefully it will continue to work that way.
Hannah: You don’t have like a personal website or anything that you’re kind of building up outside of your firm?
Blair: I don’t. I did shut down my website when I rolled into ThirtyNorth because we really just wanted to keep a one firm, one brand sort of website out there, and so that was just a decision that we made.
Hannah: From your perspective, obviously you’re with a firm that you really enjoy working with and is successful, do you think that there’s a place for advisors to maintain outside web presence outside of their firm?
Blair: Oh yes, I’ve seen it work really well with other advisors. It may be something that we would revisit again, because I think that there are so many things going on out there with digital marketing or having a presence, whether it’s advisors that are on television. There’s all sorts of business models where having separate websites is absolutely working for people. So I don’t think that just because we’ve decided not to do that, that it’s a bad decision.
Hannah: Before we get to kind of talking more about what does your day to day look like and what is your job function right now, you mentioned this reverse ageism, and I think that’s a really big issues for young advisors of feeling like if only I can get to 30, like you said, so I can say I’m in my 30s when clients ask how old you are. What are your thoughts on that, especially speaking to the young advisor who may be in their early 20s working in this profession?
Blair: Yeah. I would just say that careers are long and the time is going to pass so much quicker than you would ever imagine. I know it seems like a lot of time when you’re in it, but afterwards, you’re going to come out the other side and you’re going to wish that you were still 23 years old. So be patient.
I remember talking with someone, a colleague at UBS and saying, “I’m never going to get anywhere. It’s taking too long. I’ve been an assistant for four years. My career is going nowhere.” He looked at me and he said, “Aren’t you taking level three of the CFA? You’re going to be a CFA charter holder by the time you’re 27. Do you realize how amazing that is?”
At the time, it just seemed like it would be forever till anything was going to happen, but it does eventually happen. While you’re in that learning phase, that new professional phase, take the time to learn from others. Experience is worth something. Even though you may have new and better ideas, that doesn’t replace the fact that the people that you may be working for or working with have had real life experiences that you can learn from.
Don’t be afraid to learn other things. I mean, there are so many skills that I learned in other jobs that I thought were completely useless. When I went out on my own, I had to know those things. I had to know all the paperwork required to open different types of accounts. I had to understand operations. I had to understand compliance, and I did because that’s what I did in the brokerage firm in my first job. I did all the groundwork and luckily I knew how to do it and it wasn’t an issue for me.
I would just say be patient, try to soak up as much knowledge as you can while you’re in that situation, and enjoy it because once you kind of break out of that and you become a senior advisor or a senior planner or partner in your firm, there’s going to be a lot of big decisions with a lot of weight that you’re going to have to make. That responsibility is going to come and those aren’t always fun decisions, so just enjoy not being burdened with those kind of things right now while you’re young.
Hannah: Such good advice. Can you tell me more about ThirtyNorth and how it’s structured? How many team members are there? Yeah, general structure.
Blair: ThirtyNorth Investments, we are a firm that has a genesis from 1997. We are 20 years old. The current management kind of purchased the firm from the founder back in 2010, and we had a name change and so that’s when the name ThirtyNorth came around. We’re located in New Orleans. We have another office in Baton Rouge.
There are five people total at the firm, three partners, which are myself, Suzanne Mestayer, and Fritz Gomila, and then we have another advisor and a client service manager. So very small. We have basically three areas of business, wealth management, which is where we work with individuals on investment management and financial planning. We have retirement plan advisory, where we working with plan sponsors and even sometimes plan participants on 401(k) plan design and investment lineups, and a whole other slew of retirement plan consulting services.
Then we have a newer area of our business, which is asset management. That stems from a project that Suzanne and I started working on over two years ago, looking at buying the stocks of companies that have more women in leadership. We did a lot of research on this and so we ended up launching a separately managed account called the Women Impact Strategy back in April 2016. So we are building up our assets in that strategy now that we have a one year track record, which is still too short for a lot of institutional money, but that’s a new and smaller part of our business.
Hannah: On your day to day, how much of your time is spent between the wealth management, retirement plan, and asset management?
Blair: That is a good question. Every day is very different. I wear a lot of hats, as do we all. I mean, when you’re in a small firm, we always laugh, like somebody has got to unload the dishwasher. Our coffee cups keep getting used and somebody has got to eventually unload the dishwasher every day. So there’s just a whole lot going on.
My typical day, there’s really not one. So maybe it’s a typical week, I might be working on finishing a financial plan for the morning and then scheduling client meetings in the middle of the day, trying to figure out when I’m going to do client reviews or plan presentation meetings or 401(k) plan review meetings. Then as the head of the investment committee, we have quarterly investment committee meetings, and so I might be working on a research project to present at the next quarterly meeting.
I might be having conference calls with investment managers to sort of learn more about the strategies that are finalist that we may be considering. I might be writing the quarterly letters. I’m on the Bureau of Labor and Statistics website downloading spreadsheets of all sorts of data trying to create charts and figure out what I want to say about something like that.
So it’s a very wide variety, and on top of all that, I’m also the compliance officer, so I may have to be reviewing our cyber security policy or on boarding a new employee who has to sign all of our paperwork. So it is really all over the place. I’d say 40% of my time is in client meetings or talking to clients. It should probably be more than that, but I do hold down a lot of the operational aspects of the firm because I’m one of the ones that’s not out there trying to do business development, so I have to do a lot of the operational work as well.
Hannah: So many interesting things here. Okay, so you’re not out there going and finding new clients, but you have ownership in the firm and I think that’s kind of a unique element, if you would. How did those ownership conversations happen and how did that kind of unfold?
Blair: I think it naturally happened because I had a very small book of business to bring to the firm, and it only made sense to sort of compensate me for that. But in addition to that, the original founder ended up selling 100% of the business and so we had one owner, and it was not her intention to be 100% owner and so she wanted to make sure that there was a strategy in place to sort of start to begin to bring in other partners. I think it was in 2014 when I became a partner, and so over time, hopefully I will be acquiring more of a percentage ownership in the firm.
Hannah: I guess you buy into the firm, but how would that … So going forward in the future ownership, obviously it’s not through bringing in business. So will it just be buying more shares or kind of taking on more of a leadership role?
Blair: Yeah. It would be purchasing more shares, and there’s many ways to do this. It can be financed by the company, so it doesn’t necessarily have to be a cash upfront, although it could be. I could offer cash. But yeah, it’s a purchasing process to bring in more partners.
Hannah: Are you the only CFA on staff?
Blair: I am, yes.
Hannah: You are? Okay. Let’s talk about this Women Impact Strategy, because I think it’s so interesting. How did you even get interested in this? How did this get started?
Blair: Yeah. This is kind of what I alluded to, one of the things I alluded to, when I said being on a team has stretched me to do things that I never would have imagined. I was really ingrained in. I am an investment advisor and financial planner. I do asset allocation. I do holistic investment management advice. I pick whether it’s indexes or active managers to implement my asset allocation strategy. It’s long-term. It’s strategic, and of course I don’t pick stocks.
But we started reading some research about women in corporate leadership, particularly a Credit Suisse report that looked at over 3,000 companies globally and they’ve issued three different reports. Every two years they come out with another report, and they kept looking at stock performance of companies with more than zero women, right? Unfortunately, there’s not a whole bunch of companies that are like 75% women. We’re talking about having one woman on the board versus zero or 25% of the board being women instead of zero.
The stock performance was better, and I’m very skeptical. I believe that there are certain maybe tilts that you can take in a portfolio, but in general I’m pretty skeptical of active management. So we did our own research to try to confirm what we were reading, and we looked at the S&P 500, we pulled the board composition of the companies in the S&P 500 10 years ago, so at the time that was 2005. We looked at how many women were on the board and then we created hypothetical portfolios of companies with zero women on the board, companies with at least one woman on the board, and then another portfolio of companies with at least 25% women on the board.
We ran the numbers and found that the companies with more women outperformed. We’re also looking at that now from an executive standpoint, because the Women Impact Strategy, which eventually came out of all this research, looks at both the board and executives. So we’re working on that whitepaper now, but we ended up writing a whitepaper about it and then we sort of started coming up with a methodology for, if we wanted to do this as a separately managed account or any other kind of product, what would it look like?
So we started building the rules of the portfolio. We didn’t want to be a market cap-weighted index offering, so we decided to take a value tilt and a small-cap tilt, and also look at profitability of the companies and ended up coming up with a methodology and launching the Women Impact Strategy with seed money in April of 2016. Then we began marketing it in April of this year to individual investors, institutional investors, family offices. We’ve really just begun.
Another thing we probably need to do is market it to other advisors. The performance hasn’t been bad. At the one year anniversary, it was quite strong. We do have a small-cap tilt and small-caps have underperformed this year, so you might expect that it isn’t beating the benchmark net of fees this year, but it’s not trailing by too much.
Now I’m a portfolio manager in addition to everything else, but it’s a role play strategy. It’s an evidence-based strategy. I’m not trying to meet with management or make any … I’m not creating models at what target stock prices would be. It’s really just looking at fundamentals of a company and the gender makeup of their leadership and building a portfolio around that.
Hannah: Using that very kind of like evidence-based, when people build out their portfolios, what portion of their portfolio would this Women Impact Strategy kind of fit into?
Blair: The portfolio is an all-cap core. We have small, mid, and large companies. There’s 50 stocks in the portfolio. It depends on the client. We do have some international holding, so it’s majority U.S. but some developed international companies are in there. We look at it as an investment manager and say, yes, it’s sort of a concentrated portfolio, at least more concentrated than what we’re using with the ETFs and the mutual funds that we invest in.
So it should only be a portion of the stock portfolio for clients allocation. So it just depends on the client, but it is a core holding. It is not a satellite holding. It can really fit into that stock portion of a client’s portfolio pretty nicely. We benchmark it to the Russell 3000, because it’s all-cap.
It’s had an R-Squared to the benchmark of about 72%. So it’s not acting like the benchmark, and it really just depends individually. I mean, we can’t do it for less than a certain amount of money so certain clients can’t invest in at all. That’s really on a case by case basis.
Hannah: That’s so interesting. Have you found that people are really open and receptive to this?
Blair: Yes. All kinds of clients and potential clients have been interested in it. People are assuming that we’re only talking to women, but men are interested too. Because anecdotally a lot of men will start telling us these stories, whether it was their mother who was a professional or they have a very successful wife or even a daughter. So it really resonates with all people. We’ve had a lot of excitement. It’s one of those things that you know you’re onto something when you don’t really get very much pushback at all, even when you talk to 100 people about it. There’s been a very warm reception so we’re very excited about it.
Hannah: Yeah. It’s such a great way to implement a lot of the socially responsible investing in a really kind of thoughtful and unique way.
Blair: It is. It’s a different slice. When I first started investing, socially responsible investing was a place where investors went. They were willing to accept a lower return to align their investments with their values. Today, it’s been rebranded as ESG investing, and what we’re seeing is that looking at ESG characteristics is really a risk tool, and it’s not about accepting a guaranteed lower rate of return. It’s really that some of these metrics are ways to identify ways to reduce risk in a portfolio and potentially even add alpha.
Hannah: As you kind of look forward, what’s next for you? Kind of in your evolving career, what are you working on that you’re really excited about?
Blair: Yeah. What’s next is we need to grow this firm, and it needs to get bigger. We want to grow all three areas, wealth management, doing more financial planning. We’re always looking at technology. I mean, that’s a huge, huge thing in our business. How do we make it easier for clients to do business with it? How do we make it more efficient or just more beneficial through technology?
So we want to grow wealth management and financial planning. We also want to grow our retirement consulting business and advisory business has really taken off. We have recently begun offering to be 3(38) fiduciaries for plans, which really just means we’re taking discretion. Rather than just going to a plan sponsor and saying, “Here’s the fund lineup that we recommend,” we have discretion over that.
So that’s a new offering for us that I don’t think a lot of firms in this area are offering. Then of course the Women Impact Strategy, the sky is the limit there. We’re full speed ahead on PR and marketing for that, so we really want all three of these areas to grow and hopefully become a much bigger firm.
Hannah: Looking back on your career, are there any changes or anything that you wish you would have done differently?
Blair: I wish that I had been more patient and more optimistic early in my career. When I started working at Wealthstream, I really learned from the founder there, Michael Goodman, about this concept of the power of positivity. I was kind of a pessimist before then. I always kind of tended to see the negatives in all the aspects. The day that I sort of flipped and became an optimist is sort of the day that everything just got better in life. So, if I could have been an optimist from the beginning, I think that that would have been a wonderful change to have made.
Hannah: Is there a book or any resource specifically that people could go look for if they kind of want to explore that idea more?
Blair: I don’t remember off the top of my head. I definitely saw an amazing speaker once that it is just not coming to mind the name who spoke about happiness. It was really fascinating. But I’m sure if you Google happiness and the power of positivity, something good will come up.
Hannah: It’s so great to be in the internet age.
Blair: It really is.
Hannah: As we kind of wrap up here, is there any … Looking back and knowing audiences being newer planners, whether they be new to the profession straight out of college or even career changers, what advice would you have for them?
Blair: Be hungry, be seeking of information, take it all in, read books, spend time on the things that matter, spend less time on the things that don’t, and get excited because the demographics of our industry are such that there’s just not going to be enough planners and advisors around to take on the business once the Baby Boomer generation retires.
Just by sheer numbers, we should be excited because a lot of business is going to come our way and if you’re just set up in a way that you know which kind of clients you want to service, and you have a good offering for them, it’s going to be a really wonderful career and opportunity. When I first started, when I graduated college, I so badly wanted to be an investment banker.
I just thought I wanted to be an investment banker and work 100 hours a week and I interviewed with all of them. If you’re familiar with that process, I went on these super Saturdays where they make you do 20 interviews after they take you out the night before and try to get you to drink too much alcohol and I really thought that that was the thing for me, and I was so depressed because none of them offered me a job.
I had to go into retail, which I thought was just not exciting and nobody was going into retail and the pay wasn’t as good. Lo and behold, I wake up 10 years later, we’ve had a financial crisis and retail, what I now call wealth management, is the place that everyone wants to be because all of a sudden now it’s a great career. It’s a work-life balance that is just so much better. I would just say be excited about the future, because it’s going to be a really exciting time.