I had the pleasure to interview Fred Hubler (Mr. Retainer). Fred is an accomplished financial advisor with more than 18 years of experience in the financial services and technology industry. He is the Founder of Retainer-based Academy, located in Phoenixville, Pennsylvania. To learn more about Retainer-based Academy, please visit www.retainerbasedacademy.com.
Thank you for joining us! Can you tell us a bit about your backstory and how you got started?
I began working at a Fortune 500 information technology in corporate America for a few years. Following this, I decided to move onto financial services. I quit my job to become a financial advisor, and after six months, I got my license. I started working right around when 9/11 occurred, so my career as a financial advisor began at a very significant time in history. I worked for a national brokerage firm for about two years before making the decision to move out on my own.
What was the “Aha Moment” that led you to think of the idea for your current company, and can you share that story?
I was taking some time out of the office and having a cigar, and I thought, what would my life have been like if I never left the executive world? I realized if I had remained at my Fortune 500 company and didn’t go out on my own, all of my money would likely be in my 401(k) at work, but I would still have my kids to worry about, and life insurance and rental properties and other moving parts. I wouldn’t have investible assets to hire someone, and I would also have a situation a little bit more complicated than simply having a financial plan and meeting with someone once a year to review it. This is when I had the “aha” moment of retainer-based planning and charging for advice rather than requiring clients to buy a product from my company or bring money over to my company. This was the start of retainer-based planning, which we call the milestone clarification process.
Can you share a story about the funniest mistake you made when you were first starting? What lessons or “takeaways” did you learn from this?
While I was in training at the brokerage firm, they were training us to cold-call people. What’s interesting is they told us that we’d probably never really talk to any of these people again. Of course, this is back when cold calling wasn’t as restrictive.
My instructor recommended I tell them a different name, so instead of being Fred, I was “Kevin.” Cold calling can be nerve-wracking since there are real people on the other line, but we were just here to call and introduce ourselves, and using a different name was meant to make it less intimidating. I had a list of people to call and I accidentally misread the name for one of the guys I was supposed to call. I thought I was calling Dave, but it ended up being John. So I call and I say, “Hello is John there?” And he responds, “I’m sorry this isn’t John, this is Dave.” And I, as instructed, had introduced myself as Kevin, so I respond, “Well it’s alright because this isn’t Kevin, it’s Fred.” We both laughed, and I explained to him the situation. Needless to say, I didn’t know the instructors were outside of the room listening in a closet on headsets, and they found this hysterical. I think, ironically, the guy became a client later on. Meanwhile, everyone at the office referred to me as Kevin, even though we all knew I wasn’t Kevin.
Prior to this job, and my first ever job actually, I was in charge of putting frozen patties on a conveyor belt that would cook the patties and come out the other end, perfectly cooked. Unfortunately, the machine was broken, so what ended up coming out were only pieces of the cooked patties. I still went ahead and put them on buns and wrapped them up, and a woman bought a few and came back and complained that there’s something wrong with her burger. Naturally, the cashier didn’t want to deal with it, so he asked me, the one making the burgers, what was going on. I went up to the woman and told her that was our new “puzzle burger.” She looked at me and looked back at the burger that was all in pieces. She ended up ordering six to take home because she thought it was an awesome idea. My manager ended up making me shut the machine down, but he appreciated my quick thinking.
Age, the ease of quickly earning a vast amount of money and lack of financial and business awareness are often stumbling blocks for professional football players to make long-range plans. How does Creative Capital Wealth Management Group go about changing their mindset? It seems to be as much psychological as financial.
We meet them where they are, and we respect where they are. For example, if they’re an entrepreneur, we know they have a lot going on and they’re being pulled in a lot of different directions. We work with them to understand the outcome, and we do this upfront. The conversation usually involves us figuring out what the client needs to be going on in a client’s life a year from now for them to be happy to have hired us. During this conversation, they either really don’t know what they want, so we flesh it out, or they tell us what they do want, and we determine what is and isn’t possible. If they’re an entrepreneur or an executive, or even when we worked with football players, you know there are things that are going to be similar among each group. Understanding that in the conversation beforehand and letting them know you know where they’re coming from, helps in getting their mindset to go where it needs to go to help them get there.
Warren Buffet admits to a bias in his investments. He calls it “the Moat.” Is Creative Capital Wealth Management Group willing to admit it has a bias, perhaps based on experience over the years? If so, how does this bias influence your advice? And, is there transparency?
I’ve always believed the rich got richer because they knew things everyday folk doesn’t. I also believe when you look at the rules around accredited investors and accredited investments, I can, for the right clients, show them investments that are, in my mind, less risky than some other public options. However, you have to be accredited to even see and know about them. My bias is different is generally better, and my bias is also that investments that are not in the general public stock market tend to outperform over time.
Never has anyone come into my office who created their wealth in the stock market. They all created their wealth through their business or by investing in business privately and turning them around or owning real estate. No one has been a day trader that ended up making tons of money and then hired us to keep the boat running in my 18 years of business, and I don’t know any financial advisors who know someone that’s created their wealth in the stock market yet.
How does Creative Capital Wealth Management Group’s holistic approach differ from other financial planning services that also cover a wide range of financial disciplines?
A lot of people in the financial planning business are sticking with managing investments and cash flow. We add a layer of behavioral analysis to understand what behaviors clients typically default to, in hopes to put in systems to stop them from hurting their finances.
For retainer-based clients, we tell them any sentence they have with a dollar sign and a question mark comes to our office. In that world, we’re dealing with more than just investments. We may be dealing with investment properties, or deals they found out about from a relative that requires some high-level vetting. We also look at where they should put their money.
For example, I have a client that owns multiple franchises. He asked what he should do with a certain amount of money, and I let him know that he should upgrade his own restaurants because he gets a 28% to 32% return when he makes it an open floorplan. Sales will rise when a place is new, and fresh and clean. If I was a normal financial advisor, my job would’ve been to put the money he was offering me to something I could manage for him again and again, and instead, I told him to put it in something we’re not going to pay on, but that was the right answer for him.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company, what were your vision and purpose?
Our tagline is “Unique solutions for extraordinary clients.” I wanted to deal with extraordinary people and help them stay extraordinary. I wanted to bring them things they haven’t seen before that would most benefit them.
Our purpose is always twofold. It’s to do what’s best for the client and educate along the way. What we can do to move the needle is usually things clients haven’t experienced before. It’s risky for us to not have the clients fully understanding what we’re doing. We have a slow process where we don’t rush decisions and don’t rush solutions. Since we deal with similar profiles of executives, high net worth retirees and entrepreneurs, we’ve seen a lot of this stuff before. Although it’s the same strategy for us for the fourth time in a month, it’s the first time they’re experiencing it. We take our time to make sure they’re educated on the good, the bad and the ugly of any decision we may or may not make.
We don’t hide how we get paid and we don’t hide how it works in the world. I always tell my clients, let’s follow the money. One thing I got really good at while working with football players is simplifying complicated things in a way that anyone can understand, which is the opposite of how I was trained when I went through brokerage training. It’s important to meet people where they are and use information and connections to help them understand, that way you’re on the same page. When a client tells me, “No one’s ever explained this to me that way before,” it’s one of the best compliments I can receive.
What do you do to articulate or demonstrate your company’s values to your employees and to your customers?
We live it every day. One of our biggest values is the client comes first. There might be multiple doors to solutions that are both equally good, but we decide which path to take based on what will benefit our clients the most. Sometimes it might not be the best for us as a firm, but it is the best thing to do for the client. That is our office culture, whether we have to send emails on Saturday or work late or tell the client news they may not want to here, we do what’s right for them.
My team makes their own decisions, and there’s never been an issue where they’ve made a decision that wasn’t right for the client. Sometimes it’s not what I would’ve done or thought of, but I’ve never had to question if they’re keeping the client’s best interest in mind, and you can’t train that. Someone’s either ingrained to do that, or they’re not. I think one of the benefits is we have our own system to back up our values. None of us are commissioned. We all make base salaries, which takes out the question for employees “Which option will pay me more?” and leaves the question at “Which option is better for the client?”
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Everything changes. When things are good, you need to know things are going to change and you need to be prepared for it. You need to look out on the horizon and see what’s next or what that change could look like. When things aren’t going well, know it’s not forever. It’s temporary. Even bad things will change. Sometimes what you struggle with during the bad times end up being building blocks for the great times ahead. Be prepared for change, and remember that nothing lasts forever, especially in business. If you’re not changing, you’re dying. That’s one of the reasons we reinvented our office to be retainer-based before anyone even knows what it is. We did before we needed too. We did it because we wanted to, and we did it because this is where we think things are heading. I think in 10 years, there’ll be a lot more people charging for advice and not requiring products or assets.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
Around 9/11, I had been questioning all of the decisions that had to be made to succeed in the finance industry. I was dealing with a lot of setbacks during this time of my life, and it was very frustrating. I was going through a divorce, losing income and I really wasn’t making money. I changed my whole career to do something that wasn’t even needed at the time because, after 9/11, no one was investing money. While dealing with all of this, my mother shared with me that she had breast cancer. I was at a low point in life with a smaller house and living with just my dog and drum set. I used this time to focus on my business. I called a local radio show and asked if I could sponsor for a few days. This cost me $4,997, and I only had $5,000 in my checking account. It was one setback after another, but I did end up investing and soon has 1,200 calls in my tiny row home in Phoenixville, Pennsylvania.
How are things going today? How did your values lead to your eventual success?
Today, things couldn’t be better. Our last year was the best year we’ve had since the year before, so we’ve had back-to-back best years. We’re hiring more staff to handle the influx of clients we’ve had come on board. We’re now in 15 different states doing retainer-based planning which has helped differentiate us in the market. This new model has helped us receive national press because while most financial advisors look the same, we offer something different.
Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service-based business? Please share a story or example for each.
First, think of things from the client’s perspective.
Second, meet them where they are. Don’t make any assumptions, just adjust your approach to meet them where they are.
Third, understand that change is constant.
Fourth, never give up. There will always be times when you want to give up. Don’t give in.
Five, take time out, especially when you don’t think you can. My best ideas were when I wasn’t in the office. It’s almost counterintuitive, but the year was the best year we’ve had, and I didn’t even come into the office on Mondays and Fridays.
Is there a particular person who you are grateful for who helped you get to where you are? Can you share a story?
I had a landlord when I worked for the brokerage company and I had my own branch office in our local town. It was shortly after 9/11, I had downgraded my house and my dog was eating better than me. I had a landlord that owned the building and came in every Friday to vacuum and empty the trash. I sat down with him and asked him bluntly how he made his money. He asked me, “What’s the most lucrative thing you could offer your clients?” Meaning, which product had the biggest margin? I told him I didn’t know. He said that’s my first problem. You need to know what could make you the most money and provide the most value to your clients.
Number two is if you specialize in that, you’ll get really good at it and you’ll be known for it, and people will come to you to do it. This gave me a whole new mindset versus what I learned in sales. The third thing he shared with me is a technique using two different fixed insurance products, which I couldn’t do at the brokerage firm. He was able to get products that paid the client more on the income side and cost the client less on the insurance side because he was independent. This was an eye-opening moment, that if I went to alternative strategies, I would be way more competitive and could help the client’s way more.
If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
I would like people to be more open-minded. If people could understand other’s point-of-view, and accept and understand it, that would be great. They don’t have to agree, just understand. The world we live in is beginning to be very myopic. We need to embrace compromise and work together.
How can our readers follow you on social media?