5 questions on expanding pathways into the industry

In a new episode of the Financial Planning Podcast, two financial advisors discuss the needs of athlete and entertainer clients and how the industry has changed over their careers.

MGO Private Wealth President Louis Barajas and David Russell, the Irvine, California-based RIA’s head of family office services, work with client bases that include musicians, actors and professional athletes, as well as historically excluded Black and Hispanic Americans. Russell joined MGO last year after more than a decade in private equity and wealth management with J.P. Morgan Chase’s Private Bank. Barajas, a 30-year veteran advisor and business manager, became president of MGO in October after coming to the firm in 2019.

MGO Private Wealth President Louis Barajas is a 30-year veteran advisor, author and business manager.

MGO Private Wealth

He’s also a member of the CFP Board Center for Financial Planning’s Diversity Advisory Group. As the certifying organization and wealth managers ranging from solo RIA practices to the largest wirehouses seek to create more pathways for minority advisors and clients into the industry, Barajas and Russell shared their views on the most encouraging developments and the reminders of the work left to be done.

FP Chief Correspondent Tobias Salinger asked them the following five questions:

For Louis: You told me a story about your first memory of money. What was it?
For David: You and Louis both work with clients who have become wealthy through professional sports and entertainment. What are their main goals and challenges as planning clients?
For Louis: It was not that long ago that you were the first Latino and, in fact, the first person of color to serve on the board of the FPA. What is encouraging to you about the industry’s outreach to historically excluded groups and what are the main reminders of how far wealth management has to go?
For David: You created J.P. Morgan Private Bank’s first program aimed at working with affluent Black, Latino and other minority clients. What’s changed and what has stayed the same in your time in the industry? 
For both of you: We have talked about building more pathways into the profession. What’s one piece of advice you would share with aspiring planners who are either young people or career changers trying to break into the field?

Listen and subscribe to the FP Podcast on Apple, Spotify or wherever you get podcasts.

David Russell is the head of family office services at Irvine, California-based MGO Private Wealth.

MGO Private Wealth

Transcription:
Tobias Salinger: (00:02)
Welcome back to the Financial Planning podcast. This is Tobias Salinger. I am your chief correspondent for financial planning, and we’re really pleased today to have as our guests, Louis Barajas, and V David Russell of MGO private wealth. Thank you so much for joining us today.

Louis Barajas: (00:20)
Pleasure, Toby.

David Russell: (00:21)
You having us

Tobias Salinger: (00:22)
And, but aha is a 30 year veteran advisor and business manager who became the president of MGO in October, an author and advisor to musicians and actors. He’s also a member of the CFP board center for financial plannings diversity advisory group Russell joined M GOs it’s head of family office services in the third quarter of 2021 with a client base, including professional athletes. Russell has more than a decade of experience in private equity and wealth management with JP Morgan’s private bank prior to moving over to MGO. And we’ve got five questions for you today. I’ll just start, uh, for, for Louis. Now you told me a story about your first memory of money. What was it?

Louis Barajas: (01:09)
Yeah, my first memory of money was remembering that I lived in east Los Angeles, right? My parents are Mexican immigrants who didn’t have a lot of money and my dad didn’t have really a lot of money, but he, well, the only thing that he had was a of old coins, right? Dimes and pennies. And I mean, that’s all he had. And one day myself and my sister wanted an ice cream and we hadn’t gotten an ice cream in a long time. And my dad, I remember going to his coin collection and pulling out a couple mercury dimes. I don’t know if every, anybody would even remember what those are and, uh, using his coin collection. Cause he didn’t have any money to actually buy his size Hey, into what was the most sacred thing for him, right. To do that. And I remember now, as I’ve gotten older, the sacrifice that he went through and the lack of money that he had. So, um, that was my very first, uh, money memory.

Tobias Salinger: (01:54)
And for David, uh, you and Louis, both work with clients who have become wealthy through professional sports and entertainment, what are their main goal and challenges is planning clients.

David Russell: (02:05)
Yeah. So that, that’s a great question. I think kinda to, to, to Louis’ point it, it starts with the family, right? I think professional athletes, folks who are entertainment, right. Predominantly are people of color predominantly are, uh, first generation wealth earners. And so it always starts with building a legacy of family. And so knowing that your father, you know, went into his sacred stash to be able to provide for, for Lewis and his sister, you know, you wanna make sure those people are taken care of. And so it’s that, it’s this finite balance of how do I both help those who helped me set myself up and, and create a better legacy for the future. And so you’re dealing with, you know, multiple complexities as it relates to, to planning and investing, uh, right. And it’s also a mindset shift, right? If you, to Lewis’s point when you grow up, not having to you have, it’s not that you can’t transition. It’s just, it’s very hard, uh, to transition that mindset while you’re also still in those peak earning years. Right? And so it, it’s, it’s a very unique balance that those, that our clients face

Louis Barajas: (03:00)
To Toby, I’d like to add to that what David said, which is disappointed. It it’s also, there are no mentors, right? My dad was not a mentor for money. Most of our clients who are multi-millionaires really, it, it never had the experience, never had mentors, their parents didn’t have money. And so it’s also an issue of, of trust for some, for some of these athletes, who do they trust to help guide them? Um, that will not abuse them because now they’re, you know, they’re, they, they’re so wealthy.

Tobias Salinger: (03:28)
Well, and listeners, we are speaking with advisors Louis Barajas and David Russell of MGO private wealth. We’re going to take a very short break and we will be right back after this. And Rebecca we’re speaking with advisors Louis Barajas and David Russell of MGO, private wealth and Louis. Um, it was not that long ago that you were the first Latino and in fact, the first person of color to serve on the board of the FPA, what is encouraging to you about the industry’s outreach to historically excluded groups? And what are the main reminders of how far wealth management really has to go?

Louis Barajas: (04:10)
Well, Toby, and actually I’ve just been named to the national board of the CFP. We still have a lot to go, right. I mean, especially for example, I just became on the national board of the CFP less than 4% of all African Americans and Latinos are certified financial planners. Right. And we have to actually spend more time educating people, the importance of wealth management and really attracting talented young Latinos, blacks to this industry. You know, David and I are our big role models for a lot of, a lot of people’s, you know, in college, they reach out to us, how do they get started again, it’s lack of not having people in, in and in their world of what needs to happen for them to enter the industry. And so I think David might wanna add a little bit to that as well.

David Russell: (04:57)
Yeah. I think, you know, Louis, he said it, uh, best as it related to the question we talked about our time having mentors it’s I think it’s true on this side as well. Right? Like even as a, as a young black male, like I look up to Louis, um, as someone who’s been in this, in this space, you know, for a long time. And so, um, it’s, it’s being more visible and I’m so thankful we have, you know, opportunities like this to be able to increase that visibility far too often, you know, as people of color, um, in this space and across any industry, you know, you kind of gotta keep your head down and be able to just kind of forge forward to be able to, to make strides. I think now we’re in, in the time where we can start to, you know, kinda pick our heads up, be a little bit more visible and, and that visibility, I think will give confidence, uh, both to, you know, people of our respective communities, uh, who want to be involved, but also access to understanding that this is possible that there is a blueprint that exists.

Tobias Salinger: (05:43)
And for, for you, David, I, I noticed on your bio that you created the JP Morgan private bank’s first program aimed at working with affluent black, Latino, and other minority clients, you know, what do you think has changed since that time? And what has, you know, kind of stayed the same?

David Russell: (06:02)
Sure. Well, I mean the short answer is the internet, right? Um, I remember, uh, the first time that I, you know, moved over to the brokerage world and the guy who was running the office told me, he said, David, a lot of people who work here, you know, they were right place, right time. He said, there used to be a time when the only time you, you get access to a stock quote was you read the paper and it gave you the previous day or you had to call us. Right. And so I just think the access of information that has opened has just drastically, you know, changed the playing field. Um, I think the other thing that has changed too, is, uh, wealth is more visible now. So we talk about it more, you know, there used to be a time where, you know, you kind of knew what some people made, et cetera about whether we’re talking professional athletes, whether we’re talking, you know, corporate executives, right.

David Russell: (06:41)
Income, compensation, et cetera. Like these are not normals anymore. Right. Elon Musk is telling us how much he will, uh, potentially pay in his, his tax bill right. Going into next year. So I just think, you know, this is, this is just a more prevalent conversation. Um, what, what hasn’t changed, um, I think is, I think there are a lot of folks and I’m, again, I’m thankful for, for Lewis to being a role model to myself, but there aren’t enough diverse people in the industry to serve the needs of diverse folks who are making money. And so diverse to me, a component of that is race. A component of that is gender. A component of that is age, right? I think there are a number of different, you know, even when I got in the industry and I think it’s still true, right. You know, the average advisor is, you know, 45 to 50 plus, right. As are some of their clients. And so I just think until some of those things change, you know, we, we won’t be able to fully see, you know, how transformative this, this new and next generation of wealth can be.

Tobias Salinger: (07:33)
And definitely, uh, we see the demographics of the country changing over time and, uh, any wealth managers, RIAs and other firms in, in this space who are ahead of the curve are only doing themselves favors in terms of their business. Just another, uh, another reason to, to add, to just being the right thing to do as companies for both of you, you we’ve talked about building more pathways into the profession. Uh what’s one piece of advice you would share with aspiring planners who are either young people or career changers trying to break into this field. Louis, why don’t we start with you on this one?

Louis Barajas: (08:13)
Yeah. The, the thing is, one is breaking in and getting through, right. And there are a lot of young Latinos of African Americans that get in, but they don’t, they, they don’t last in the profession. They, they don’t build a sustainable practice. And so my suggestion would be to either find other people that are doing what exactly you’d love to do, find out how you can get mentored, find out how you can go work with them and find out that again, as if you’re, if you’re Latino, African American, it takes you a little bit to build a practice that can sustain you at, you know, so that’s what you wanna do at the beginning because my, my, my problem is not right now, letting people know what that we’re available for them to help ’em out, but it’s how do you get them to be in the industry for a long time? Because that’s what we need as one of the things that we do is with, with David is, is, uh, you know, we will talk a lot, uh, about how we can build not only, you know, our practice, but also maybe in the future bringing other young advisors.

David Russell: (09:08)
Yeah. I, I would add to that by saying focus is so important, right? I think the first intimidation factor for just a young person period, a person out of means you add to it, a person of color, right. Is I didn’t, I don’t know anyone in this space, I didn’t grow up. Right. And so I think people try to literally boil the ocean. I wanna talk to business owners. I wanna talk to, I think you have to, to, to find a focus, but in addition to that, and, and one of the things I think gets overlooked, particularly for he’s a CFP, right? Like he has the certifications to specifically focus on the clients he works with. And so I think develop a niche or focus of who you want to work with, identify, you know, the three or four common gaps that, that, that population experiences, and then become that expert.

David Russell: (09:52)
I mean, there are no shortages of certificates, special, et cetera for you to do. And I, and I think sometimes people often think this is a relationship business and it’s, but I think in order for that relationship to, to matter, you have to show value first and you can show value pretty quickly, uh, by just having some basic certifications, um, et cetera, we have another member on our team. Who’s a certified exit planner and helping people who exit their business. Right. That is a very specific focus. Something, candidly, I hadn’t even heard of until he joined our team. But again, like that’s allowed him to build a practice. And as Lewis said, be sustainable to then, you know, continue to, to, to force his business.

Louis Barajas: (10:26)
Yeah. Toby, you know, one of the things that we, we found that a need, right? Uh, we know people in our industry, whether they’re athletes, um, entertainers, musicians who have made it, but you, you know, we found this need. Now the pro the thing is now that we’re trying to just create a demand for it, right. We wanna be able to say, you know, that we’re here to help you transparent honest people who are highly educated. We, we don’t come outta school selling any kind of products. We come out actually trying to create solutions for our clients that are beyond just what most industry, uh, people tend to think as more product driven, right? We’re, we’re more, we’re more service driven and, and really looking to help our clients very, very long term. So that’s what we’re trying to also attract. We’re trying to attract other people in the profession that have that same mindset, that long term view to really be there for their client and it with a more holistic approach.

David Russell: (11:16)
And I would add one quick thing to that, Toby, not to, you know, contain a labor to point, but this is, this is a lifestyle for us, right? Like, I think kind of going to your other question about what are things that haven’t changed when we talk about diversity or diversifying the industry, right? It’s about checking boxes, right. I don’t know how to be anything other than be black, right. Louis, nothing else other than to be a Latino. So this is like, this is what we do. This is something that is, you know, innate, as it relates to us, wanting to work with folks who look like us and even our clients who don’t necessarily like us. And so I think to his point, we’re creating a demand and showing and co way, and it’s not just, Hey, we, you know, it, it, it comes across very gimmicky. I think sometimes the way that it, that it comes across the way other people kinda do wealth management.

Tobias Salinger: (12:02)
Well, excellent words of advice for a couple of role models, uh, for people coming into financial planning and wealth management, Louis, but AAS and David Russell of MGO private wealth. Thank you so much for joining us today.

David Russell: (12:19)
Toby. Thank you. Thank you to,

Tobias Salinger: (12:22)
And thank you for listening to the financial planning podcast. This episode was produced by horizon with audio production, by Kellie Malone and Wen-Wyst Jeanmary special. Thanks this week to our guests, Louis Barajas and David Russell of MGO private wealth rate us, review us and subscribe to our content at www.financial-planning.com/subscribe from Financial Planning. I’m Tobias Salinger. Thanks for listening.

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