Latest / Financial Planner Search / Executive Comp & Flat-Fee Planning with Malcolm Etheridge | Financial Planner Search
Transcript
- Gregory Wilnau: Malcolm, thank you so much for coming on the podcast today. How are you doing? Malcolm E: I'm good, man, I appreciate you having me. Gregory Wilnau: Yeah, I've been looking forward to this one. To get started, why don't you just take a moment and kind of tell us a little bit about your practice and what you specialize in. Malcolm E: Sure, so ⁓ I along with the rest of my team of certified financial planners have a focus on basically senior leaders at publicly traded companies that have somewhat complicated executive compensation issues that they don't have the time to untangle and figure out all the nuances and complexities that go along with like vesting windows and blackout periods and, you know, regulatory filings and all that crap. And that is where we, where we shine. ⁓ So I know we'll get into the nitty grittier details later, but that is, I think the easiest way I think to characterize us is that we are a group of tax nerds. that are really good at talking equity compensation. Gregory Wilnau: and senior leaders of publicly traded companies, that's something that would be very important to them. That's a good thing you specialize in that. Okay. Maybe you could tell us a little bit more about what inspired you to do this. Malcolm E: Yeah. ⁓ yeah, so interestingly enough, I went to college to be a computer engineer. ⁓ for those who are watching and not listening to the podcast, you can see over my shoulder, the decals from North Carolina A &T. which is a big engineering college down in North Carolina, but I got two years into my degree and the degree changed my mind for me. ⁓ And so I went running from the engineering department and said, where's the only other place that I have been interested in? my entire life and that was figuring out how to make money. And so I went to the business school naturally and got a degree in marketing, thought I was going to go into advertising, but I graduated into the ⁓ great financial crisis. And because I already had a job at the time I graduated working at CarMax, Gregory Wilnau: Mm-hmm. Mm-hmm. Malcolm E: I went to them and asked them to promote me to their management training program and send me through there. And so that was ultimately what landed me in finance because the training to become an F &I manager in a car dealership was interesting enough to me that it made me pursue the finance side of the house instead of the sales side, instead of the advertising and everything else I thought I'd be doing. Gregory Wilnau: Mm-hmm. Yeah. So you realized that computer, you said computer engineering or computer science, computer engineering was not for you. I could see how you falling into, then you graduated towards marketing. Wow, that's completely, that is on the opposite side of ⁓ engineering, Ben. ⁓ Malcolm E: Mm-hmm. Computer engineering. Well, so I am, the reason I shared that too is like, I'm very fortunate that the role of a financial planner in my mind or the financial planning itself is part art and part science. And I feel like my brain perfectly splits between the two. And so it's helpful that I'm able to, you know, take the complex and make it less so for the people that need it. Gregory Wilnau: That's good. Malcolm E: But then a lot of our clients are engineers and their brains function a different way. And so I'm able to talk to that side of their brain that needs it to make perfect sense logically before they can move forward. Gregory Wilnau: Mm-hmm. sure. Yeah, engineers are really interesting to work with. They like the details. They like to see how the pieces kind of fit together. ⁓ I could see how you being the bridge between like that creative left brain right brain would be really valuable to your clients. How many clients do you have now, Malcolm? Malcolm E: Yeah, so we work with 62 families at this point. so we're client households, however you want to break it down, because some of them are individual people. Some of them are families. Some of them are multi-generational families. But 62 households is where our focus is. And so for us as a firm, I like to position us in people's brain as multifamily office style services for individuals and families who are high net worth, not necessarily needing the multifamily office structure in its traditional sense. So for those listening that don't know what in the world I'm talking about, that's basically like the Bezos family has an office with 50 or 100 people, attorneys, accountants, everything else. Gregory Wilnau: Mm-hmm. Mm. Malcolm E: who work solely on behalf of the Bezos family to manage their assets. For folks that fall below that mark, there's the multifamily office where maybe you have 10 families like the Bezos family that don't have the billions of dollars, but they have several hundreds of millions of dollars and still need those kinds of personalized services. We strip it down even further to higher net worth individuals that maybe have five to $10 million in assets, need help with all of the parts of their portfolio in their balance sheet, but don't necessarily want to have to have 12 different relationships across like banking and insurance and investments and whatever. Gregory Wilnau: Mm-hmm. Right. Right. And what's the benefit of that to your clients? Because I'm assuming that they that's one of the things they enjoy about you is you're kind of that quarterback. Right. Malcolm E: Well, so if you think about it though, one of the things that's gone away in the last, I don't know, four decades or something since everything has gone computerized is that the relationship between you and the person who manage or people who manage your money. Gregory Wilnau: Mm-hmm. Malcolm E: is farmed out to a call center with people who may or may not even be located in the United States. So if you call JP Morgan Chase, you may or may not be getting a person who actually lives here in the United States somewhere, let alone actually knows anything about you and or your family when you call. And so you're getting whoever's the next person up in the call center. But there was a time when everything related to our money was solely relationship based. And so you could walk into your Gregory Wilnau: Mm. Malcolm E: bank and say, hey, I need a loan to buy a new house. And they would know your kid is about to graduate from college or your kids playing t ball on Saturday or whatever. And our focus is actually working with our clients to become them, if you will step into their brain to really understand how they think and focus on money to then be able to make decisions on their behalf, sometimes on a completely discretionary basis, depending on what it is. And that is a unique thing, I think, ⁓ because of how much of our lives have become ⁓ less personalized because of computers. Gregory Wilnau: Yeah, I like how you're putting a ⁓ greater emphasis on that too with how you structured your practice and how you work with your clients. ⁓ Something that's more personal. What's a typical situation that your clients will typically need you to lead them through when they come to you for the first time? Is there a common, what's the most common situation? Malcolm E: So what we're seeing now, a great example that's timely, is that Microsoft recently announced that they're going to be offering early retirement to a lot of their... employees with seniority, let's say, and it's the first time in their 51 year history that they've ever offered early retirement in this way. And so you've got about 7 % of their US workforce is a part of the affected population. Anybody who's got whose tenure plus their age equals 70 or more is eligible for this. And so this is one of the ways that Microsoft is going to offset the cost of all the billions of dollars they've been spending on building out AI infrastructure. Gregory Wilnau: Wow. Malcolm E: So if we can cut headcount, then we can also offset our debt service. So anyway, ⁓ I imagine that we're going to see an increase in the number of people who are already reaching out to us to say, in the world does this mean? Should I be thinking about taking it? How do I know if I'm actually ready to take it? And we also have, because of the nature of the work that we do, a relationship with Microsoft already where we offer ⁓ financial planning at a discount to their employees through their what? Gregory Wilnau: Wow. Malcolm E: they call internally their prime benefits system. So we're already there. We already know the benefits offering, the compensation structure, all that. But because they're creating this kind of ⁓ movement, if you will, this kind of momentum internally, I imagine the calls will increase as those offers start to finally roll out. Gregory Wilnau: Yeah, absolutely. So ⁓ let's talk about this situation specifically, because it sounds like this is a good thing to hone in on. What are some of the questions somebody coming from Microsoft who has been offered an early retirement package might have for you the first time that they meet you? Like what's on their mind? What are they wanting to do? Malcolm E: Yeah, it's can I afford to take this offer? I'd love to, but this scares me because it's a thing I've never had to do before. So am I going to be OK? Like they'll ask the questions in 15 different ways that all equal, am I going to be OK? And so our job is to take in all of these different data points that they're going to throw at us, examine all the documents that support all of the things that they have told us from memory, and then hold up a mirror and say you told me you wanted to do these five things. I'm going to stack rank them for you in terms of importance. And then you're going to tell me which of them we want to take care of first. But our interpretation is this is what you said you want to do. Now, based on that, I can tell you whether you're likely to hit all five. You can do four and one would be nice. You can do three and two have to go like. But it allows us to help you prioritize and make the determination of how you're going to move forward based on what you want to do. And also answer the question, eventually, of am I going to be OK? Also tied to that, a lot of times folks in this position have a tremendous amount of company stock that they've built up, both inside of their 401k and also in a taxable brokerage account. And so now the question becomes, How do I unwind this concentrated position and turn it into actual cash that I'm going to use to supplement my income because I'm leaving this company at 57, 60, 62. And that means that I'm several years away from when I'm going to be able to apply for and receive Social Security benefits. How do I turn this paper money into actual cash that I'm going to be able to live off of and do that in a tax efficient way so I don't get hammered by the IRS the moment that I receive those dollars? Gregory Wilnau: Yeah, absolutely. Okay, let's, let's dive in a little bit to more, a little bit more into kind of your your approach. ⁓ So, besides the Microsoft, Microsoft, where do you typically find your clients? What are some of the ways that you get to know them? Malcolm E: Mm-hmm. Yeah, so I have a weekly podcast that I co-host. The show is called This Time is Different. People have started to find us through there. I also am on CNBC two or three days a week, ⁓ a lot more so now while we're in the middle of earnings season, especially while we're talking about tech companies, because that tends to be my beat. And so people find I'm heavily findable online. And it just so happens that everything that I do online points people back to our firm's website where they can schedule a consultation, go through the process of ⁓ self-selecting. So we have all of our fees, our planning process, our five-step onboarding process, our annual client service calendar. Literally everything you want and need to know about our firm is available to you online so that at 3 o'clock in the morning, if you're doing your search, because that's when you like to do your shopping, you can make the buying decision then without having to feel like you're drawn into a ⁓ timeshare presentation where you got to sit and listen and then there's going to be a hard sale and an arm twisting. Like the focus is really on making sure that it's right fit clients that are showing up for that complimentary consultation at the end of the day. Gregory Wilnau: And when it comes to your practice, let's talk about maybe your vision and where you're wanting to take it. ⁓ Where do you see it in the next one to three years? Like what's your vision? Are there any goals you're working on? Malcolm E: Yeah, so we launched the firm in October of 2024. We're already at 62 households, as I mentioned. Our sweet spot client is somewhere between the $2 to $10 million assets range that tends to be where folks come in the door with enough complexity that the fees that we charge make sense. But ironically, what I'm finding already is that we tend to do well too with what I referred, I affectionately refer to as the recovering do it yourself, which is our clients that ⁓ based on our service model, we don't require that we manage our assets in order to receive the advice. And so they still like to manage their portfolios themselves, but then come to us for the checkup to say, am I going to be okay? Or I'd like a thinking partner to help me see the stuff that I've got blind spots for. Gregory Wilnau: ⁓ nice. Malcolm E: because their focus has solely been on, I like managing the investments. But the reason I bring that up is those folks will have 20, 25, $30 million that they're managing themselves in some cases, depending on the company that they've been attached to and how well that stock price has done for the last decade or two. ⁓ And so I can see a world where we double our headcount because those are the people that are showing up that are saying, Gregory Wilnau: Mm-hmm. Malcolm E: I really like the idea of having someone to talk to about our tax situation, ⁓ our retirement income plan, our insurance needs, whatever. I don't necessarily want to have to give up control of or management of our investment portfolio. And as you know, the way our industry is traditionally set up, it says two things to people. One, go get rich first, then call me. And two, trust me with your life savings. or kick rocks. And I think it's great that like we have, I mean, that's literally what the messaging is when you look underneath the surface. And so there are people that are very comfortable saying, I don't want to be in control of this. I don't want to be responsible for this. I want you guys to manage the entire lot for me. I don't want to have to touch anything. There's also the people that, Gregory Wilnau: put it bluntly. Yeah. So just to be clear, do some flat, you do flat fee, you don't, as well as AUM, you don't require ⁓ asset management. I love that. I love that. Malcolm E: We allow you to choose your own adventure. Whichever works for you works for us. So we provide the advice, bill for the advice, and then we also provide the asset management and bill for the asset management. Gregory Wilnau: I mean, that's cool. I've shared this story on the pod before, but when I started my journey in business, starting my business, I think 15 years ago now, I was a construction worker making $15 an hour. And I read a book called Rich Dad Poor Dad. And he said, you need a team if you're going to build wealth. And I made that decision. I wanted to do that, which is why I left construction to start my business. And he says, one of the things you're going to need is a financial advisor. Malcolm E: Mm-hmm. Gregory Wilnau: So what I did is I went into Google Maps and I typed out financial advisor near me. And the first thing that came up, I booked an appointment. And after about two minutes, that guy talked to me. He realized I had no money and promptly showed me the door. So I'll never forget that. I'd probably be a decent client for him now, but I just needed like what you're saying, like maybe some help to get me going. Because on that way there, you can make a lot of mistakes. So having some guidance to the point where I'm at. Malcolm E: Yep. Gregory Wilnau: I actually have some assets ⁓ is something that I think is missing, was missing then. I think that that's flat fee planning is something that's ⁓ become more prevalent today, which I think is a really, really good thing. All right. So let's talk a little bit more about influence. So as your practice has grown, right, were there any programs, any trainings or any organizations that have kind of helped shape your approach? Malcolm E: Mm-hmm. Gregory Wilnau: and maybe positively impacted how you serve your clients. Is there any one that you'd like to give a shout out to? Malcolm E: Yeah, so I mentioned that we're a team of tax nerds. And the reason that that is the case, I didn't start out that way. was very, so when I started my career, I worked for Merrill Lynch and I was very heavily investments focused like most other people who do this work. And it wasn't until I was studying for my CFP exam, like six or seven years after I'd already come into the business where I, did my CFP at Georgetown. And one of the courses is completely on income tax. And I did that course and it like blew my mind how interesting income tax was to me. And mostly because it became clearer to me during that period, like literally every single recommendation we're going to make to a client, everything we touch as practitioners is going to have some sort of tax implication. And so if you don't fully understand the client's tax situation and the implications of the advice that you're going to give, you can't fully diagnose the patient, right? Like you have to really know how their system is going to receive and respond to that medication. But when you work inside of a gigantic bank owned firm, like a Merrill Lynch or Morgan Stanley or whoever else, I'm not singling them out necessarily, but also I am. ⁓ When you work inside of an organization like that, they very clearly say to you, Do not give tax advice. You are here to provide investment solutions. Tax advice is not your job. Legal advice is not your job. Working with an independent RIA, registered investment advisory firm, you have the option to choose whether you want to lean into tax advice or lean out. Most RIAs still will lean out and say, we don't want to give tax advice. don't want to. I took a different tact and said, let me go get Gregory Wilnau: Mm. interesting. Malcolm E: educated on tax. So I became an IRS enrolled agent and let me surround myself with people who know even more than I do. So like the person who leads our ⁓ tax service, his name is Ed, he's a CPA who's been doing this almost as long as I've been alive. And so that way, like we can be comfortable giving tax advice because again, literally every single recommendation that you're going to make to a person has some sort of tax implication. Gregory Wilnau: Yeah, I I love that you leaned into it. You're showing a pattern of choosing, going in a direction, seeing how it feels for you. And if you don't enjoy it, you you try something else. And it sounded like when you started doing the taxes, you totally nerded out on it. So you learned everything you could about it because it was interesting to you. And it also helped add more value to your clients and how you serve. Malcolm E: Yeah, I appreciate those light bulb moments when they come. Gregory Wilnau: Yeah. Yeah, they could be life changing. For sure. It happened to me a couple times throughout my life. You got to listen to those, I think. A lot of people don't, but when that inspiration sparked, I think you got to answer the call. Speaking of that, let's say that, let's talk, I want to talk a little bit more about what the transformation looks like to begin working with you. So maybe you could walk us through your actual process. So if somebody were to become a client with you today, maybe you could walk us through what happens the first couple of weeks. What happens the first couple of weeks and then what does it look like to work with you throughout the course of a calendar year? Malcolm E: Yep, I'm glad you framed it that way, because our planning only service, as I call it, is designed to be a 12 month period. So we even bill for it that way. It's spread across a 12 month billing cycle. ⁓ The first three months is where we go through our five meeting onboarding process, literally five meeting onboarding process everybody goes through. The first is the complimentary consultation I mentioned. We call it an intro meeting, but it's really just a chance to get to know you, understand you, and decide if we're a good fit for each other. From that point, if the client decides they want to move forward, we do a kickoff meeting where we ask a lot more questions to really understand your current financial situation and where you're trying to get to, so point A to point B. Then we do what we call a money psychology meeting where we put all the math to the side and get really deep on understanding who are the people and the things that really matter to you outside of your money and what you do for a living. And that's where I see if we've got a second person in the household, especially the mind starts to open up and the client really starts to understand and appreciate. the design of this whole thing to become you, as I mentioned, and be able to help make financial decisions on your behalf and give advice based on how you see money rather than trying to convince you that you should think about money one way or another based on how we see it as planners. And then the fourth meeting in that series is called the investment planning meeting is probably self-explanatory, but really just understanding your approach to risk and how much risk we should be taking on your behalf as we're making investment recommendations or managing a portfolio. And then lastly, we do what we call a plan implementation meeting where we're now turning over to you the formal written financial plan that has a list of observations about your situation, a bunch of recommendations, and then what I consider to be the most important part of the entire thing, the list of action items that we're going to complete together. So it could be 10, 20, 30, depending on how complex your financial situation is. But that is what we then spend the next nine months working on, actually implementing all of those action items and recommendations to make sure that this doesn't just become the most expensive PDF that sits on your hard drive. Because I could hand you the plan, say go forth and conquer, and you never do any of it. And then that was a waste of everybody's time. Gregory Wilnau: Mm-hmm. Right. ⁓ I love your answer to this question because it can be kind of ambiguous around, know, what does it start? What does it look like to start working with with a a planner? I really like how you break all those meetings down into clear, specific purposes and points with outcomes that you're going that you're going for as those meetings kind of result in. They have a focus, they have a strategy. And when you're trying to wrap your head around Malcolm E: Mm-hmm. Gregory Wilnau: doing this, it makes it a lot easier to understand what it's all about because of the way the thought that you've put into and how you articulate that onboarding and what it likes to work with you. So that's something that I really appreciated about about your answer. Yeah, and you know, think also accountability is huge having somebody to kind of who understands and you've articulated to what you are looking to do, but then to keep continue to keep in touch with them and have them kind of guiding you along. think that's a really valuable thing. ⁓ So ⁓ I typically will ask this question. There's a lot of the advisors that I interview are about retirement. And I don't know that that necessarily fits you well, because typically, ⁓ maybe senior leaders in public traded companies might just be not necessarily looking forward, looking at you specifically to help them with retirement, would you say that that's accurate? Malcolm E: Mm-hmm. Yes and no. think a lot of times when people show up at our door, they have in their mind that they would like to either make some really big pivot, like they want to leave the super intensive workload of being a executive at a publicly traded company and go into like consulting or something that's less strenuous. or they just want to downshift into retirement over time. Like they're planning on going part time, which, you know, company like Apple, for example, will allow you to do 20 % I mean, sorry, 20 hour work weeks instead of 40, and then just split your comp in half. And you can do that for as long as you want to, to kind of have a glide path to decelerate into your retirement in the traditional sense. So it depends. But yes, we do also have people that are like in their 40s that have hit Gregory Wilnau: That's nice. Malcolm E: a point in their career that they never expected they would hit, let alone at the age that they hit it. And now they're terrified of their compensation plan and saying, what the heck do I do with this? They're throwing all these numbers at me and I don't know what decisions to make. You help me decide. And so it's a mix. It could be some of both. Gregory Wilnau: Mm. Okay. All right. So, ⁓ before we end here, I just want to ⁓ ask just one more question. ⁓ You know, you struck me as the type of person who puts a lot of time and effort into wanting to improve, learn new things, be better, focus a lot on the things that you can improve upon. And I think this is typical. ⁓ Sometimes it's hard for us to acknowledge the things that we do well or celebrate our wins. I think we have to be more intentional with that. Malcolm E: Mm-hmm. Gregory Wilnau: So I want you to take a moment and kind of put your humble hat on and brag about yourself for a second. What's something that you do for your clients that takes a significant amount of time or energy but that they might never know about? Malcolm E: Hmm, that is a very good question. So I actually appreciate you giving me an opportunity to brag about myself, because if it's one thing I'm good at, it's talking about what I'm good at. So this is a welcomed opportunity. ⁓ think that, so we have, as I mentioned, an annual planning calendar that... Gregory Wilnau: So it won't be hard for you. I take it all back. take it all back. Malcolm E: guides how we offer planning throughout the course of a year. There's like 20 or 21 things on that list of stuff that we're doing every single year, most of it in the background on behalf of a client. So I like the way that you frame that because it's things that they may not ever even recognize that we're being done. ⁓ But I think realistically, if I had to choose one thing that we're doing on behalf of our clients, Gregory Wilnau: Mm-hmm. Malcolm E: I don't know that I can dial it down to one. Sorry, I'm like really thinking about this now. Yeah, I'm really thinking about this and I'm like going through all of the things on that list of things that we do on an annual basis. I don't know what one thing I would extract from that document to help. Gregory Wilnau: ⁓ tricky question. Maybe keeping yourself educated on everything. Malcolm E: Yeah, mean, yeah, that's true. We keep ourselves up to date so they don't have to. Gregory Wilnau: thinking about your clients, keeping yourself up to date so they don't have to. Yeah. Malcolm E: All right, you know what? I think that is the answer. I think that the one thing that we do on clients' behalf on an annual basis that they probably don't recognize is being done, is worrying about their money more than they do. ⁓ And that is the God's honest truth. My New Year's resolution actually for 2026 coming into the year was to stop caring more about clients' money than they do. Gregory Wilnau: Mm. Malcolm E: because like it genuinely burns me up inside sometimes when we go through the exercise of like building a plan, we agree on the plan, we agree on the next steps, and then the client doesn't do their part to actually implement the plan and take those next steps. So we said, we're going to open this account, move this into it, do this thing to solve this problem, to check the box and hit this goal. And then we're continuously Gregory Wilnau: ⁓ wow. Yeah. Malcolm E: pinging the client to do their side of that action item and they haven't taken action and it's been four or five months. Like that burns me up, but I have learned that I have to meet people where they are and I can't care more than the client cares. Gregory Wilnau: Mm. All right, I love that. I love that you care so much, but also that you made a resolution to give yourself permission not to worry about it as much because ultimately it's not your money and you can't care more about your money than your clients, about your clients money than they do, right? So ⁓ I like that. I think that's a good balance between the two. All right, so for someone who's listening, who is interested in exploring how they might work with you. What should they do next? How can they get in touch with you? Malcolm E: Yeah, so the firm is Capital Area Planning Groups. Our website is CAPGLLC.com. I mentioned, I'm also all over social media and the interwebs. And so if they just search Malcolm Etheridge, I probably show up on the first 10 to 20 pages of Google. so either of those is, or MalcolmEtheridge.com even has an option to get in touch with us too, if you want to go that way. ⁓ Gregory Wilnau: That's good. Malcolm E: I'm easy to find. Gregory Wilnau: You're everywhere. I love it. All right, Malcolm, thank you so much for the insights. Really appreciate your time and chatting with me today on the pod. Thank you. Malcolm E: Yeah, thanks for having me.