EP10 - What is peacefulness worth?

There's a question every advisor eventually wrestles with: do I manage investments myself, or do I outsource to a TAMP? In this episode, we look at the decision through a different lens — not performance, not cost, but peace.

Steven Watts and Founders Financial President and CIO Pete Murphy unpack the trade-offs of self-managed and outsourced portfolio management — control versus capacity, scale versus story, brand versus generic experience. They introduce the concept of second-party investment management (the model behind Founders' Freedom Capital Management Strategies, or FCMS) and land on the question that decides everything: what are you convicted in, and why?

More from Founders Financial: 

Freedom Capital Management Strategies (FCMS): https://foundersfinancial.com/tru-enterprise-os/investment-management/outsourced-investment-management/

TRU Enterprise OS: https://foundersfinancial.com/tru-enterprise-os/

LinkedIn: https://linkedin.com/company/founders-financial

© 2014-2026 Founders Financial. Member FINRA/SIPC and Registered Investment Adviser. All Rights Reserved.

Transcript

SPEAKER_01 0:00

From founders, my man. Here's the question every weather eventually wrestling. Do you mind manage investments myself? Or do you want to work to it? Here's the conversation.

SPEAKER_00 0:38

All righty. Good morning. And uh thank you all for joining us today. Um I mean, I think we have a really interesting and thoughtful topic for all of you joining us and all of you listening in. Um, that's really geared towards towards all of you who are thinking about how you can best succeed when it comes to investment management and your practice. But but more importantly, we're kind of having an interesting twist still in today's discussion. Uh, more importantly than just the practical and tactical elements, we're kind of incorporating a bit of a philosophical flavor in today's discussion as we consider investment management in the context of peacefulness and the important and the importance of how that piece uh plays in our daily lives. So um I'm happy to join all of you again. My name is Steve Watts. If this is your first time uh listening in, uh, and I'm the chief growth officer here at Founders Financial. Uh, and I am super pleased to be joined once again uh by founders president and chief investment officer Peter Murphy.

SPEAKER_02 1:36

Yeah, thanks, Steve. Looking forward to the conversation today.

unknown 1:39

Yeah.

SPEAKER_00 1:40

Um for those of you don't uh for again, first time if you're listening in, um, and and the first time you're seeing Pete. Pete has been with Founders Financial since 2012, and he serves as our chief investment officer as well as our president. Uh he really is really focused on driving the strategy or founders' uh in-house investment management platform, uh Freedom Capital Manager Strategies, which is actually super relevant and topical for today's discussion. Um, and he's helped lead it to one of the largest camps in our industry. Uh before coming to Founders, though, Pete Gashi guided the endowment for Notre Dame. And in 2001, he was named our president. Uh, in addition to driving strategy for Founders, uh, Pete spends a lot of time and is really focused and committed to directly serving um members within the Founders community. He spends a lot of his time working with advisors to help them guide their practices and achieve the dreams that they have for it. This includes working closely with them to develop the right investment management strategy that gives them not only the structure they need, but again, I'll go back to the point of today's discussion, the peace of mind that they are very often seeking. So uh again, super excited to have you today. Um, this discussion today is pitting two tried and true methods that advisors use in their practice today when it comes to uh investment management. On one hand, we have self-managed. And these are the advisors who are building and managing their own portfolios, including doing all the research and all the communication and everything that goes alongside it. And on the other hand, we have the rapidly growing case of outsourcing that investment management activity and doing so to a third-party platform or TAMP, as you'll hear us referred to it quite a bit today. You know, both have great merit uh as well as potential drawbacks that we're gonna we're gonna dive into today. But what's interesting about this discussion uh is this concept of peace and finding peace in part by choosing the strategy that makes the most sense uh for you so that you can only run a great practice, but you can sleep easy knowing that the process you've chosen is not creating turmoil for you, your business, and ultimately your clients. So uh, Pete, to kind of get things going and kind of turn it over to you to kind of help lead us in this discussion, um, it's kind of setting things up. Can you expand upon this idea of what finding peacefulness is for advisors when it comes to managing investments? Because kind of a kind of a unique thought, right? I think most people, I I certainly I do, they go right to the practical and tactical uh elements of, you know, is outsourcing better versus insourcing. But if you can kind of tee up this conversation today about the idea of finding peacefulness, what does that mean?

SPEAKER_02 4:25

Yeah, absolutely. And and thanks for the introduction, Steve. And thank you all for joining today. And this is a unique dimension or angle on the concept of investment management, this this idea of peacefulness and what it means. And over the past 12 or 13 years at Founders, I've talked to, I've spoken with numerous advisors who have gone through the process of discerning do I want to manage money on my own, do I want to outsource, do I want to do a combined combination of the two? And I always end at the same place that there is no right or wrong answer to this. And it's completely dependent on each individual advisor's situation and circumstances, but even more than that, it's their personal conviction and beliefs. And so I always start with this concept of when you manage money on your own, you have a heightened degree of control, certainly in the terms of the decision-making process. And to many, that's that sense of control brings a degree of peace in the context of if you want to change something, if you want to react to something, that you can do it. On the other side of that, I've also come across advisors who have been running money on their own for a long time, and they've grown weary from it. And as I've listened and tried to understand that more deeply, I think there's a couple a couple reasons for that. One is with the control comes the responsibility. And oftentimes that is a sole responsibility born on the shoulders of the advisor. And in the independent world, many times it's just the advisor. There's not an investment team underneath supporting that advisor. So they're in the full control of every investment decision, the outcome of every investment decision. And then they're also on the front lines of meeting with the client relationships. And so there's this there's this kind of weight that comes with the financial planning, the management of the relationship, the investment management that for some advisors becomes becomes a source of weariness and and and becomes exhausting over time. And so I've begun to understand that more deeply. And for some advisors, they thrive in that environment and it doesn't feel that way, which is a great sense to, which is a great sense of why management on their own works for those advisors. But for many, and and I'd say more often than not, eventually it becomes burdensome to some degree. And that's where beginning to pick your head up and think about alternatives may make sense. I had the conversation with an advisor this morning who acquired a practice. Uh, the advisor had managed portfolios on her own for many, many years, and she did it in a very manual and time-intensive way, and he just found it to be increasingly burdensome. And when I said to him, Do you love it? His answer was no. He doesn't love the managing portfolios, the running the Morningstar reports, the picking the funds. He could do it, he's got the ability to, but he feels it's more of a drain than something that is uplifting to him. And it's also something that he realizes most of his clients don't value the most about his relationship with them. And so we began to have the conversation about outsourcing. And I said to him, the only thing that matters is that you're convicted in the decision. So if you're convicted in outsourcing, you will be successful in outsourcing. If you're not, you won't, because you won't stick with it. And same thing goes with insourcing. So the peace mostly comes from finding the right solution for you as the advisor. And then that decision has ramifications in terms of the implications of it that will drive the outcomes towards is it a peaceful result for you or is it a burdensome result for you?

SPEAKER_00 8:09

Yeah, it makes total sense. Um, you know, Pete, we're you know the the data is showing that that more and more advisors are actually turning to outsourcing, probably because, you know, the things you just kind of mentioned, right? They're they're burdens by they're burdened by all the different stuff happening in their world. So we're seeing more and more advisors start to adopt and outsourcing to their investment to their investment management. It's an upward trend that we've been seeing for for the past number of years. Help us understand why more and more advisors seem to be leaning that way and why the trend is going up uh in this direction.

SPEAKER_02 8:42

Yeah, it's it's a it's a great observation, and it's been an accelerating trend over the last couple of decades, but it but material so materially so over the last decade. And there's a few reasons that I believe is it that there's a few things that I believe are driving this. Um, first and foremost is that, and and Steve brought up a chart here, investment management, if done right, is time consuming. And without the right systems and processes in place, it becomes a major operational burden and headache for an independent advisory practice. And so time is a big delta here. But when we look at that and why it matters, if we look back at the advice industry over the past 30 or 40 years, in the early days, advice was just about managing an investment portfolio. It didn't go a whole lot beyond that. But in more recent times, advice has extended to incorporate comprehensive planning. It's gotten to be a much more in-depth and intentional experience with a client relationship. And a lot of the investment management that many advisors hung their hat on historically has become commoditized to a degree. And so advisors who are who are selling their value proposition through investment management only or largely are really fighting an uphill battle at this point because clients, if you look at all sorts of surveys, they value the plan more than the investment portfolio. They value the service and relationship more than the funds that you own in their account. And so for advisors, as they've had to pivot to offer more extensive, comprehensive planning services and a more rich client relationship experience, they've had to find the time to go do those things that are higher value add to the clients. And one of the easiest places to outsource to free that time up is an investment management. And you see that in the chart here, in terms of how significant the time spent on investment management can be for the average advisor. And if you go to the next the next chart, Steve, and when we look at various studies and we've and we compile them, we see generally speaking, an average performing advisory practice is spending 70% of their time on more process-oriented things, running money, back office service, and the like, and only 30% on relationship enhancing activities, whether that's with current relationships or prospective new relationships. And the advisory practices that we see that are growing the fastest and that are doing the best tend to flip that script. And they're only spending about 30% on process-oriented activities and 70% on relationship enhancing activities. And how are they getting there? They're making investments in their practice either by outsourcing things that are not directly client-facing, or they're making investments in hires on their team to take on things within the practice that are not directly relationship enhancing.

SPEAKER_00 11:38

Great, Pete. Great, great, great thoughts there. Um so, Pete, let's let's dig into uh the the options that advisors have today. Um, so you know, we we've we've kind of teed it up now, right? So we've got you can insource, right? Or you can outsource to to a tamp, right? So is it an either or if you're choosing between a TAMP uh or managing your own portfolios? Is you know what what what does that look like?

SPEAKER_02 12:05

Yeah, I would say in terms of mindset, yes. So you either manage portfolios or you outsource the management of portfolios. In terms of execution, I believe you have more options than just in source or outsource. And that's what we'll dig into a bit more today is the execution of the options of in-source versus outsource.

SPEAKER_00 12:28

Yeah, it makes sense. So so let's begin with that. Let's start to dig in. Let's begin with um the advisor who is the portfolio manager, right? So what are those key trade-offs that advisors face when they choose to manage their own portfolios?

SPEAKER_02 12:43

Yeah, so when you're when you're managing portfolios on your own, the benefits are pretty straightforward, right? So you retain control of the investment decision-making process. If you want it done a certain way, you make sure it gets done that way. So with that, it comes the maximum degree of flexibility for you to customize things as needed based on the needs of your clients or the needs of your practice. There's also not an additional layer of cost brought into the equation by introducing an outsourced partner. So there's clear benefits, you know, certainly from a practical and tactical standpoint, to advisors as portfolio managers. On the flip side, the challenges we've spoken about a little bit already. So managing investments and doing it well with a thorough philosophy, a thorough process, it requires a significant investment of time. And it's not just a one-time investment, it's a recurring ongoing investment because portfolios don't stay the same, markets change and are dynamic, and circumstances evolve. So it requires constant oversight. The second is, and I've come across this a lot with advisors who run money on their own, because they can customize for each client, they often are incentivized to do so to appease the needs of the client, but they do that with more of a short-sighted mindset because they don't consider the future operational ramifications of having all these one-off portfolios. And I can't tell you how many circumstances I've come across where I meet an advisor who runs money on their own with hundreds of different accounts that are all allocated differently, no real process or mechanism to monitor them on an ongoing basis, and is operating a completely reactive world where they're not really running money as a portfolio manager. They're literally just reacting to stay afloat and to keep up with all of the very nuances that they've created in their practice over the year. Um, the other challenge that I see is there's this connection when the advisor runs the portfolios, they take a great degree of pride in that. And that becomes a central selling point often in the client relationships in terms of the value out of the advisor's portfolio management. The challenge with that is that usually correlates directly to a performance outcome. And as all of us who know who have been in this business for a while, performance ebbs and flows and comes and goes as markets change and market environments shift. And when that becomes part of the value proposition, you actually lose a degree of control from that because we don't know how the markets are going to perform going forward. And as much as we like to show alpha and benchmarks and things like that, it's not what clients care about. They care is their plan on track and is their investment balance growing over time. And then the final challenge that we come across traditionally, and this is more and more frequent now, is succession becomes a big focal point with the aging of the advisory workforce is uh succession planning. If you've created this special system for managing portfolios, who's gonna run it when you're ready to move on? And if you haven't trained someone up on your own, when someone goes to acquire your practice, if they already outsource, they're gonna view that as a lower value add because they they can't a lower value in the practice because how do they take that on? And they can't do it easily. It's manual, it's time consuming, they may not have the resources. So while you get a lot of benefits and flexibility, control and the like, some of the longer-term implications of that can present some pretty significant challenges to advisors, especially as their business grows and gets more complex and valuable over time.

SPEAKER_00 16:06

Yeah, I think the succession point there is a key one. But what also stood out to me in this as you were kind of breaking that down for us is you know, on the left side, the benefits, you you, you know, the advisor remains in control, right? And that that you know, that's that's that makes sense, right? They're controlling everything, it's it's all under under their purview. But at the same time, you you're actually sacrificing a lot of control. You you lose control of your time, right? It's totally, you know, um dependent upon what's going on, and and you don't have the the flexibility in your time to do the things that really matter. So it's this, you know, it's control is tricky in that way. Sometimes you you can have a lot of it at the same time, have very little of it. So pivoting over to the to the other side of this, right? Then the next option, uh, pivoting to using a TAMP. Um, you know, one thing that you know I hear quite a bit, you probably hear it a lot more as much as well as some other things, is um, you know, the idea that outsourcing it could reduce the role the advisor plays in the client relationship, right? Or or maybe said differently, it could dilute the advisor's brand and the value they provide. That's a I think that's a common perception or thing we hear. So what are your thoughts and the pros and cons again on this when it comes to outsourcing um as opposed to managing yourself?

SPEAKER_02 17:23

Yeah, with with third-party management, there's there's a lot of benefits to it, um, which is why we've seen so much growth in in this channel. Assets under management at TAMPS has grown at really an exponential rate um over the last decade or so. And so the first and foremost is TAMPS just make it easier for advisors. Not only do they take take over the time-consuming tasks of investment management, but they put it into a structure that is easy for the advisor to use. There's a lot of resources wrapped around for proposal generation and account service and the like. And it does, it frees up a lot of time for an advisory practice who can lean on a TAMP to take over that time-consuming investment management work and all the operational aspects around it, from trading to account service to raising cash for distributions all across the board. Um, second, it's very scalable and efficient. What a TAMP delivers or an outsource platform delivers is a definable system and process that can be scaled meaningfully without you having to add additional staff to your practice because you've got an outsource partner who's scaled up to do it for you already and has the infrastructure in place that allows you to scale without taking on a lot of in um additional investment within your practice. Uh, third, uh, you get professional oversight. Um, and so having an investment team that you can lean on and speak to as part of your team, it just gives you a broader bench, a deeper, a deeper set of resources to serve your client relationships. And it can also elevate the level of professional perspective your clients may have of your practice, seeing that you've got a team around you supporting you. And then lastly, as I spoke about a few moments ago on the on the corollary to this, it makes succession planning simpler when the buyer of your practice doesn't have to figure out how to manage the money because you've already got an outsource partner in place who's doing it for you. In terms of challenges with traditional third-party management, um, a lot of these are the corollaries to what we spoke about with advisors portfolio managers. So you do lose control when it comes to the specific investment decision making. So when you're outsourcing, if you don't want to hold fund A, B, or C, typically speaking, your outsource manager's not gonna say, okay, I'm gonna rebuild this model or this strategy around that because you don't like it. So it does require you to take a hands-off approach to the investment selection. Doesn't mean that you don't have to do your due diligence on the TAMP, understand the strategies, understand how to put them to work, but your due diligence is a different level. You're looking at the tools of the strategies available through the TAMP, not trying to figure out which funds to buy, what the asset allocation parameters need to be, and the other things that you would traditionally do in an advisor's portfolio manager world. Um, another challenge is that introducing a third party can muddy the client relationship, it can muddy your value proposition. So I'll give you an example of so you have your own practice. Um, we'll we'll we'll use the example of Watts wealth management in this in the circumstance, and and and Steve uses a TAMP to manage his portfolios. So not only does he need to explain the value proposition of Watts Wealth Management, but he then needs to talk about TAMP XYZ and their value proposition. And then within that TAMP, there's typically investment strategists that are made available, big fund companies like BlackRock, American Funds, Vanguard, you name it. So then he has to talk about which strategists he's using within the TAMP. So by the time it gets to the end client, there's a lot of parties involved in this that can be confusing to the client and probably leave them asking, where does this all fit together and why? Can certainly be done. We've seen it happen, but we don't think it's optimal in the context of the client, um, the client's perception of your value add and your and your practice and how it fits into the picture. Um, and that gets into that point that you see listed there of the potential dilution of the advisor brand with all these other parties involved. And then the last challenge, which is the most common one uh that that we come across, is the additional layer of cost. And there's no question that if you're going to outsource, there's gonna be a cost to outsourcing that could be explicit or implicit, but it exists. And you've got to assess that in the context of the end, the end deliverable to your client and serving them in the best way you possibly can. And also in the context of running your practice as efficiently and effectively as you can over the long term. So there's trade-offs with that, but certainly the additional layer of cost is one of the challenges for advisors who want to outsource.

SPEAKER_00 21:44

Yeah, that that makes total sense. Good, good breakdown there. So, Pete, it it's clear that uh there's pros and cons on on each side, right? And and and I think, and I'm curious if you agree with this or not, um, this is where a lot of advisors get stuck on the decision they We make, right? Whether to insource or outsource or something else. On the surface, you know, there's no one lopsided direction that just makes a clear, easy decision, hey, I should go do this, right? There's nuance to both, right? So I want to bring this back again to the point of this discussion, not only comparing insource and outsourcing, but in the context of peacefulness, right? If advisors typically start managing their own portfolios, and that's an assumption I'm making in the conversation, if they start there, um in the context of finding peace and harmony, do the benefits of using a TAMP and going the outsource route, do they outweigh the trade-offs an advisor might experience?

SPEAKER_02 22:44

Yeah, so this gets back to what I said at the opening. I don't think there's a black and white or definitive answer to that. It's going to depend on the circumstances of each individual advisor, what you're convicted in, what's important to you. And most importantly, does it resonate and align with the mission of your enterprise? So I don't think there's a there's a black and white answer to there it being better or worse. What I've come to experience and appreciate over the years is that making the right convicted decision for you is the most important thing. The one thing that I've seen that doesn't work particularly well is when advisors kind of say, Well, I'm going to hang on and manage investments to some degree, but I'm going to outsource a little bit. And you get into this world where you're operating in both realms to a small degree. That to me is usually the worst outcome because you don't get any of the scale and efficiency benefits of outsourcing because you have to keep all the other systems in place to run money on your own anyway. And your your conversations get muddied, which clients go where gets muddied. That doesn't seem to work all that well, which is why it to me it boils down to get convicted in what's right for you and your practice and then commit to that. Don't try to dabble in it, is what I've learned through the experience of talking to lots of advisors over the years.

SPEAKER_00 24:01

Yeah, that that decisiveness is key, right? So makes total sense. All right. So we we've we've uh kind of introduced a third super secret option here, but then we're gonna call it that in the course of this conversation. Uh Pete, when you began leading freedom capital management strategies here at Founders or FCMS, you were introduced to this idea of second party investment management, right? And I don't think this term is uh I don't think too many advisors are familiar with this term or heard maybe heard about it in large scale. But can you take a moment to explain what second party investment management is and why it's different from the more traditional concept of third party you were just talking about, and maybe how it's positioned compared to uh the different outsource options that are available to advisors today?

SPEAKER_02 24:49

Yeah, absolutely. And and so to give you a little bit of context on this, it's probably helpful to go back to the the origins of FCMS. So FCMS was was born out of the financial crisis. And a lot of the advisors we serve through founders had been running money on their own for many, many years at that point, went through the financial crisis, which was a very challenging time, and the stress of managing money through that was something that we commonly heard from them. And they were seeking our input and guidance in terms of is there a better way? And that was really the catalyst for the launch of freedom capital management strategies, which we'll talk about in a little bit at founders back in 2009. And so we set out to help resolve the challenges that our member partners shared with us through their experience through the financial crisis and to deliver a turnkey solution to do that. And that was that was FCMS and for us. And so what we wanted to try to do through that was A, we realized at the time that most advisors and founders and more broadly, they're not wired to be money managers day in and day out. They're spending their time serving client relationships, they're serving their time bringing new relationships into their practice, but sitting down, running running money day in and day out, trading and the like, that tends to be more the exception than the role for advisors, certainly in the context of today's environment. And so we wanted to deliver the scale and efficiency that comes with outsourcing, the peacefulness with the advisor, not having to worry about running money day in and day out and make those investments. So we went through all of that and said we can build a turnkey solution. We looked at do we just partner with a with a traditional third-party firm and do it that way and white label it? And we ultimately said, no, we we need to build it our own way in our own unique way. Because one of the things we experienced was advisors were they weren't only worried about giving up control, they obviously had reservations about the cost, but they also were worried about their brand. And if they're not doing the money management, what's their value and how do they position their value? And so one of the important things that that we view as second party is distinct from third party, is that third party really does introduce a true third-party relationship into the equation. And you've got to go through the whole dynamic of how they fit, what's your value versus their value and the like. Um, what we view second party as is different. Um, so we built FCMS uh to only be available to the member partners or advisors of founders, and it's something that is fully integrated into their practices. Everything that we produce and do can be white labeled to them and their firm. So it feels like it's one, it's one story, and this is just their investment philosophy and process that they're delivering with the benefits of outsourcing. And so that's that's kind of the history and narrative of second party in our world and how we feel it fits. And so you can see in this graphic that Steve brought up here, when we look at the landscape of outsource strategies, if you look in the lower right and you look at a model marketplace at a big custodian like a Schwab or Fidelity, those are all great solutions for outsourcing, but you're left with thousands of choices and you're left on your own to figure out which ones to use, how to put them together. And then you don't have any necessarily marketing collateral support about telling how that's being done. So it gives great choice. But what we found is it's kind of limiting to the advisor who actually wants to outsource and get the benefits of scale and efficiency, and also to find this peacefulness we talked about at the outset, which is why we've seen so much growth in the turnkey asset management platform space. And there's really two types of those. There's the third-party ones that give you access to a lot of investment strategists from a lot of the big asset managers, like the like the Fidelities and the Black Rocks and the Vanguards, and then boutique ones as well, all through a centralized TAMP. And then you've got the proprietary TAMPS where they have created their own product and mutual funds. An example of this would be SEI. Um, and through their TAMP, they allocate to their funds and they make everything else easier around it, too. And so tremendous growth in those platforms. But what we found is that they tend to create this third-party relationship and dynamic, which can be a bit dilutive to the advisor value prop. So the advisors, it adds complexity at a minimum to that conversation. And we want to try to find a way to do it in a more streamlined way. And so for us, second party, we've learned that less is actually more. So advisors are outsourcing, aren't looking to be overwhelmed with choice. They're looking for simplicity, but with enough solutions to meet the broad needs of their relationships. And so what we view second party as it's a more intimate relationship between the the TAMP, the advisor, the the branding and value proposition of that, and the simplicity of the delivery of outsource management to the advisor experience.

SPEAKER_00 29:49

Yeah, that that makes um makes a lot of sense. Kind of a blending uh uh of the best of all things, right? So um, Pete, let's let's stay on that FCMS for a little bit because I think it's it's it's uh obviously probably new to a lot of people listening in today. So let's just kind of stay on that a little bit longer. Um, you know, founders has really adopted and grown this second party solution through FCMS uh and your leadership, just as you were kind of describing, going through the history. As I mentioned earlier, today it's one of the largest outsourced solutions uh in the US, and we're super proud of that. Um and it represents this really unique blend, like I was just saying, of uh of the benefits of outsourcing that you discussed earlier, uh, and and keeping the advisor front and center. So can you take a minute to talk a little bit more about FCMS, uh kind of some of the benefits that it provides, how it's structured, how advisors get the the best level of support through it. Um take us through FCMS a little bit more in greater detail.

SPEAKER_02 30:44

Yeah, so so so at its heart, um FCMS is seeking to deliver the scale and efficiency and the peacefulness that can come from outsourcing investment management, but to do it in a way that's much more personal and intimate with the advisor experience. The idea is to elevate your enterprise by liberating your time to grow, but also to elevate it by actually enhancing your value proposition by a story that is fully integrated into your brand and your firm. And so there's really a few things that we've focused on in the build-out of FCMS over the years that we believe are unique and distinct from traditional third-party management and certainly from advisors managing money on their own. The first is quality over quantity. Um, as I spoke about, a lot of the traditional third-party management platforms in the marketplace, they're very good platforms, but they're incentivized to scale and to be accessible to as many advisors as possible. And in doing that, to appeal to as many advisors as possible, you want to have more and more choice to make sure you meet the needs of all those various advisor constituencies. And so, in our experience, over time, that creates complexity, that can create too much choice for advisors, and it can create some challenges. And so we've been very intentional of taking what I'll call a quality over quantity approach. We only make FCMS available to the advisors who are affiliated with founders, the member partners that we serve. And we are not trying to be everything to everyone. So in FCMS, you're not going to see strategies from BlackRock and Fidelity and all these other fund companies, and you then choose who you like and the like. We're seeking to put together best of breed strategies where we select funds for whatever companies that are out there that we think are best in each asset class, and we put together singular solutions that meet those needs. So we're not trying to be a convenience store in the context of a traditional TAMP or a warehouse in the context of a model marketplace to give as much choice as possible. It's a very curated set of strategies that are built very intentionally with purpose. The second is investment management is the product. We do not have a dedicated sales team that is out there pushing strategies, models, et cetera. Um, our member partners, our advisors that we serve, they have direct access to our investment team. And they speak with the members of this team directly when they have questions and want to understand things more deeply. So investment management is the product. And you can see there we've got three CFAs on staff today. We have engagements with several leading independent research providers, such as BCA Research and Ned Davis Research, as who serve as an extension of our team from a macroeconomic analysis. And we are your team. We view ourselves as an extension of your team. And many of our member partners speak to us as their investment team. And it just gives that feeling of a more robust and seasoned team that is that is working together, you, the advisor, and us, the investment committee, to serve the holistic needs of the client relationship. And then last and not least is built by and for. So the story of founders in pretty much anything we've developed over the last 30 years follows this mantra of Built By and Four. And it speaks to the integral role that the advisors of founders have played in the development of not only FCMS, but our technology platform, our compliance, and everything else. It's because of the intimate relationship and partnership we share with the advisor. We understand their needs more richly and deeply. And in that, that is influencing the innovation and development of FCMS over the last, at this point, 15 plus years, and it continues today.

SPEAKER_00 34:25

Yeah, then Pete, talk a bit a little more about um, you know, you mentioned earlier that that we really try to keep the the advisor front center relationship, right? FCMS plays more of a uh a supporting role, obviously, but the focus is to keep the advisor front and center in that client relationship. Can you touch on that a little bit?

SPEAKER_02 34:45

Yeah, it comes it comes down to this. Um we view um ourselves as an extension of your team. Um many of our member partners will include the bios of the investment team right on their websites and and speak to us as as part of their team. And then the way that we keep the you and your practice at the center is everything we produce, um, whether it is a brochure, whether it is a portfolio commentary, whether it's web pages that you can add to your website, everything can be fully branded to your firm. And so I remember partners using FCMS, they speak to FCMS as their investment platform and they represent it that way. They speak to us as their investment team. And everything, because it's it integrates with your brand, it goes a long way in terms of it actually elevating your value proposition, not having to talk about all these different parties that are involved and the like. This is your story, which makes it a very unique platform within the marketplace.

SPEAKER_00 35:47

Yeah, that makes total sense. Um Peter, you I think you touched on this earlier. I just pull up a little graphic real quick to kind of show the whole comprehensive platform. This is this FCMS.

SPEAKER_02 35:57

I think you got a lot of this, but for those I'll just take I'll take a moment on this because it's important. Um, I'll oftentimes speak to a potenti a prospective member partner around this concept of FCMS is a platform, it's not a product. So not only do we not have any proprietary products and none of them are available through the platform, it's it's more about this mindset of this is not a product you are selling. These are investment solutions you are delivering to your client relationships to meet their needs. And so to do that effectively, we've got to have a comprehensive suite of solutions to meet your client needs where they are. And so, for example, we have managed account solutions, which is what most people think of when they think of outsource management, but we don't stop there. We we also have custom portfolio solutions where we can have a highly customized approach to each account based on taxes, based on specific security or industry restrictions. So not only do you outsource, but you can outsource with customization when needed. We have a private wealth management program embedded into FCMS that allows you to serve seamlessly higher net worth clients who are seeking full customization with private client service. We have a solution for retirement plans. So if you have business owner clients who have a need for a retirement plan, we've got a turnkey solution where founder serves as a 338 investment fiduciary, and we make it seamless and simple for you to deliver a retirement plan to those relationships. If you're using variable annuities for income guarantees and you're trying to figure out how to select the subaccounts within those, we give you uh recommended asset allocation models to use as a guide. So you don't have to think about that. Um, we even have a way held asset um solution. So if you have a client who's got money managed with you, but they've got a big amount of money in a 401k that's out away from you. They're looking for your help to management. We have a subscription service where we can help them with the allocation of those of those assets as well. And then finally, we've spoken to already the integrated and brand and marketing communication resources. So it truly is a comprehensive platform and suite of solutions that empower you to serve more holistically.

SPEAKER_00 38:05

Yeah, it does a lot more than just check all the boxes, but it certainly does check all the boxes, right? For sure. Yeah. Um, you know, Pete, you know, we're kind of wrapping up here. Um, got a few more things I kind of want to talk to you about. But you know, one thing that um we see is that advisors often lack their own unique story as it pertains to investment management, right? So it if they go the tamp rally we've been talking about, and you've kind of you know hit on this a little bit, it's often leaning heavily into their partner's brand, right? Their processes, et cetera, all the different relationships they're incorporating into that, right? So, and if they're managing their own portfolios, the story, you know, they're there's still certainly their front and center relationship, but maybe the story isn't as refined or it's not as articulated as as they would ultimately like it to be. So can you share with everyone why having your own unique story is so important when it comes to serving client relationships?

SPEAKER_02 39:01

Yeah, absolutely. And and this has been one of the most unexpected uh value ads of FCMS in our experience the past 15 years. So oftentimes when I'm speaking to a prospective member partner and they manage money on their own, one of the first questions we'll ask them is that's great, what's your investment philosophy? And I rarely get a coherent answer to that question. And it's something that they just hadn't thought about. Um, it doesn't mean they're not managing portfolios. Well, they're probably doing it just fine, but they don't have a philosophy they can articulate. They may have an investment process, but then I'll ask them, well, is it documented? Is it something you share with your clients? And the answer is typically no to that. And one of the gifts of FCMS that we've we've come to appreciate is the gift of a story. And in FCMS, we do have an investment philosophy, and it is something that we follow and build strategies around. You see the pillars of that here and active oversight, modern diversification, and risk management. And if we continue on, we also have an investment process that is documented, definable, and repeatable. And so we can speak to this and we also execute on it on it consistently. And that's one of the gifts of FCMS is the gift of a story through the philosophy and process that they can rely on through our team without having to try to try to figure it all out on their own.

SPEAKER_00 40:20

Yeah, Pete, it reminds me and kind of more more my field um and area um is is people really are attracted to your why, right? They're really attracted to to why you do something, the story behind it, uh, and and less about what you do or how you do it, right? So that story that that projects you know who you are, what you stand for, and all this thing. That that's that's super critical when it comes to growing and enhancing those relationships that we've been talking about. No question. All right. Um so I hope everyone really enjoyed that from Pete Pete. Great job kind of breaking down FCMS. I want to spend some time on that because second-party investment management is is probably a little bit new in terms of a term for a lot of people listening in. So thank you for breaking that down and sharing, you know, not only the story of FCMS, but how how we've tried to introduce something a little bit uh different than what they find out there uh to kind of set up um different options for the advisors uh if they're looking, exploring what makes sense for them. So uh for the audience list for the audience listening in, um, if you're interested in learning more about FCMS, uh please visit our website at financefinancial.com and click on the investment management link. Um but in addition to second party, I know we talked a lot about that today. And again, Pete went through all that. Um we do help advisors um looking to go down any of these paths, right? We have solutions for for all three of the paths you see on the screen today. And we'd love to uh to talk to you and learn more about kind of what your unique needs are and which path ultimately is gonna um uh you know be more attractive to you. All right, Pete. So we're gonna we're gonna bring this home now and we're uh with an answer to the to the the question that we started this whole thing with, right? Uh the battle between TAMP versus self-managed portfolios. Um, what do you want our audience here to remember when it comes to choosing the solution that's ultimately going to give them the setup they need and again the peace they seek? What is that big takeaway that if they remember nothing else, they're gonna remember this from you?

SPEAKER_02 42:26

Yeah, it's a it's as simple as this. And it's it's to you, the advisor, uh what are you convicted in and why? Once you answer that question, the rest of it will be very straightforward and simple. And yeah, you need to understand the pros and cons of the different paths and and the like, but at the end of the day, it's about your conviction and what is most important to you. And if the answer to that is you take great conviction in managing money on your own, and that's a huge part of how you want to invest your time, then that's absolutely the right path for you. If you're managing money because you feel like you need to, you're managing money because you feel like you need to reduce cost, you manage money because you feel like you need to differentiate that way. I would challenge you to think differently in the context of what's the highest purpose use of your time and where does your convictions lie? And if you get those aligned, the rest of it'll take care of itself.

SPEAKER_00 43:23

Yeah, great, great parting words there, Pete. Um again, great job as always. And I always thank you for coming on and and talking to everyone and and sharing your wisdom and insights on on this incredibly important topic, uh, as well as the other ones that you participated on in the past. So uh thank you so much. Um uh in the meantime, thank you all for coming. Um, have a great rest of your week, and we look forward to seeing and talking to each of you again here soon. Thank you.

SPEAKER_02 43:50

Thanks, everybody.

SPEAKER_01 43:52

Thanks for spending time with us on the building and money. If this conversation resonated on the money, too.