WSO Podcast | E65: The ULTRA High Net Worth Game at Top Asset Managers
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Member @mentorX shares his path going from one of the largest technology companies in the world and then using an MBA to pivot into the asset management industry at not one, but two top bulge bracket banks. Learn about the compensation structure and how convoluted it can be at these larger firms to why he jumped ship several times in his career as well as his one piece of key advice to young listeners still mapping out their career.
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WSO Podcast (Episode 65) Transcript:
Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me! As I talked to some of the community's most successful and inspirational members to gain valuable insight into different career paths and life in general. Let's get to it. In this episode, member Mentor x shares his path going from one of the largest technology companies in the world and then using an MBA to pivot into the asset management industry and not one but two top bulge bracket banks. Learn about the compensation structure and how convoluted it can be at these larger firms to why he jumped ship several times in his career, as well as his one piece of key advice to young listeners still mapping out their career. Enjoy Mentor X! Thanks so much for joining the Wall Street Voices podcast.
MentorX: [00:01:05] Yeah, you're welcome, Patrick. It's great to be on, so thanks for having me.
Patrick (CEO of WSO): [00:01:08] Thanks. Yes, it'd be great if you could just give a short bio to the listeners.
MentorX: [00:01:12] Sure. So I live in New York, I've been born and raised in New York and spent pretty much the bulk of my career here in New York City. I started my career originally as an engineer in the tech sector. I worked for a very large tech company that I'm sure all of your listeners visitors would know very well. After the first portion of my career at this tech company, I headed off to business school. I went to Kellogg at North-western. I got my MBA and from there did the Wall Street circuit, so went through a very large financial firm that ultimately failed. Unfortunately, it was like a controlled failure there actually still around, but they went from, you know, an enormously impactful and very significant firm to a like a shadow of its former self. And as that failure occurred after the financial crisis, I moved on through another, another financial services firm that very well respected and very well known in the industry, and ultimately was recruited from there to a third one, which is generally regarded as sort of, you know, the number one firm in financial services and.
Patrick (CEO of WSO): [00:02:26] And so this was on the this was on the wealth management. This was on the wealth management side, right? For all of these.
MentorX: [00:02:31] Yeah, this is yeah, that's right. This is on the wealth management side. Wealth management, asset management, private banking, et cetera. Got it. Ok. Yeah, and after that, I was picked up by a client to run and manage their family office.
Patrick (CEO of WSO): [00:02:44] Great. And that was that's the latest gig, right? And then we'll get to that kind of at the end in terms of what you're up to now, but let's go all the way back to undergrad. So did you know, you know you wanted to be an engineer or technologist kind of coming right out of school? What kind of prompted you to
MentorX: [00:03:04] Kind of be a, you know, it's really it's really interesting. It's a great question. So, you know, ironically, I did know, OK, I say that sort of like, you know, a little bit with a laugh because when I went into the tech sector, it was it was absolutely crystal clear to me what I wanted to do, how I wanted to do it and ultimately where I want it to work. And I absolutely focused every bit of my being on accomplishing that, and it worked out. And I say it's funny because like when I went into financial services, I almost feel like where I ended up within the financial services sector was more happenstance than it was deliberate planning right to start. I mean, it was deliberate planning later on in my career, but initially it was just more sort of like, you know, I guess, luck of the draw, then then the technology part of my career. Yeah.
Patrick (CEO of WSO): [00:03:57] And so in terms of when you were an undergrad, so you're taking all the engineering courses you have like a very specific goal. Is this during the kind of dot com like right before the dot com bust?
MentorX: [00:04:10] Is that? Yeah, that's exactly right. Yeah, I actually finished undergrad not too long before the sort of implosion. I had a few, you know, a few years of rah, as you would say. Yeah, did
Patrick (CEO of WSO): [00:04:21] You think that played into it, though? Or was it something even before then before it got going? Because it was, you know, ninety five to ninety nine is when you went to undergrad, right?
MentorX: [00:04:30] Or, yeah, well, actually, yeah, I finished. Yeah, just around then. So I mean, I think that probably played a part, but it's another great question because, you know, I can I can honestly say that I don't think that that was all of it. And I'll explain. My father is actually a PhD mathematician who, after graduating and finishing his Ph.D., found that the skill set that he brought to the table was very applicable in computer sciences. This is going back like before anyone would have thought of computers and when you had to actually code in mathematical algorithms. So, you know, he was a coder and as literally as a kid, I'd sit on his lap while he was hacking away code at these, you know, IBM mainframe computers in our basement because, you know, he was trying to build a company. And I just had so much exposure to technology like, you know, as a baby, we were playing with, you know, five and whatever inch floppy disks. And, you know, we had that green screen with old clicked keyboard. And well, then it was very modern, but today it looks like a relic. So I had a tremendous amount of exposure to the tech sector because literally my entire life I was surrounded by coders and technologists and software engineers. My father was one and he actually founded a software development company, and that's how he paid the bills. So I don't think it was just because the dot com sort of.
Patrick (CEO of WSO): [00:05:53] Yeah. Ok, so I buy it. So you had a lot of exposure growing up. It was kind of like your father following in your father's footsteps a little bit. So you graduate, you kind of realize your dream. Tell me what was the most surprising thing once you got to this large technology company and what exactly was your role there? Were you specifically in the, you know, as a coder or tell me a little bit about that?
MentorX: [00:06:15] Yeah, no. So I followed a different path. Actually, based on my father's advice, I was all about going into coding as well. And it's interesting because I kind of look back and feel like he could have given me slightly better advice, honestly. But his advice to me was, Hey, look, listen, coding is going to be sort of commodity, which I guess in a way he's right. But in a way it's such an incredible skill that it would have been a good idea. So he said, Why don't you go the infrastructure engineer route? Because that's really, really exploding now. The internet is just, you know, the biggest thing the actual nuts and bolts of putting the internet together, you know, setting it up for companies, et cetera, like being in the infrastructure side of the world could be very promising. So I followed that path and I ended up being an infrastructure engineer at, you know, the world's largest technology company at the time. And even still today, it's arguably number one or number two. And it was a very, very fast paced, very exciting career. It was it was incredible work. And through that opportunity, I ultimately ended up moving into a role. I moved out of the engineering ranks and moved into a very cool role that they had just invented that they sort of thought was going to be an impactful role for their business, which was to take engineers with a specific skill set and certain types of personality, et cetera, and put them on the business side within their largest Fortune 100 client companies. And have those people advised the chief information office on how to invest in technologies and how to invest in infrastructure and how to invest in merger and acquisition activity to achieve certain corporate KPIs?
Patrick (CEO of WSO): [00:07:53] So that's got a couple of years in or was that a couple of years in when you made that transition to that?
MentorX: [00:07:57] Yeah, yeah. It was a couple of years in. Yeah. And listen, it wasn't sort of like accidental, you know, a couple of years into the engineering. So I just I kind of I was looking around the business and I saw that, you know, I guess it was sexy to me. It was it just seemed so much sexier, so much more exciting and so much more dynamic. You know, these business guys kind of running the world and like going out to all these big companies and meeting with the CEOs. And I just thought, you know, that would be a really cool place to be. So in every, you know, quarterly review and every networking conversation I had, I was trying to make my way over to the business side. And then when the opportunity finally came up, it was great.
Patrick (CEO of WSO): [00:08:33] You jumped. So you did that? Tell me, did you? You said something about the personality that code or so like you felt like you were different than most coders?
MentorX: [00:08:41] Yeah, I mean, I don't want to. I don't want to come across sounding a little bit full of myself to the audience. You know, I certainly, you know, I think the world of coders like I said, my father is one, and it's just incredible. I absolutely love that side of the business. I just I there's a certain, you know, there's this quote unquote stereotypical personality of, you know, a real, highly skilled, you know, coder. You can see it in the show, Silicon Valley, et cetera. Yeah. And I wouldn't say I was typical of that. And you know, the business, I would say the business leaders that I dealt with at the company at the time recognize that pretty early on. So as I tried to make my way from, you know, the engineering ranks over to the, you know, to the business side, it it kind of was a natural fit and I had a lot of support for it.
Patrick (CEO of WSO): [00:09:27] Fair. Ok, so your when do you start kind of thinking about getting an MBA?
MentorX2: [00:09:31] So it's a great question. I think I was a little starry eyed at the time when I say starry-eyed, I mean, kind of like with the whole idea of an MBA from a top school because I saw this guy, you know, that worked the company. He came in after I did, and he was just he just seemed to be on the lightning fast track like he came into the company after me, but came in at a more senior position and within, you know, they had tracks like get to be in a certain role for a certain number of years before you could get promoted or move, et cetera. This guy seemed to go through like roles in six months, like he came in at a senior role. Six months later, he was promoted to a more senior role. Six months later, he was running the region and like six months after that, he was running half the country. And I looked at that and I was like, Man, what does this guy have going on, right? You know? And you know, as a good engineer, I started doing extensive amounts of analysis on all the people running the business. And what I discovered was that it just seemed like everything. It wasn't just him. He kind of like the light bulb went off for me, you know, observing his path. But every single senior business leader that I was working with at the time had come out of like a top school with an MBA from the Harvard, Kellogg, Wharton, Stanford, et cetera. And I was like, OK, well, I don't have that. Maybe, maybe that'll help. I didn't think I was in any way being held back. I just wanted an accelerant. I wanted to sort of like light my career on fire and kind of mimic this guy's trajectory and be like, You know what? Two or three years in role? No, no. I'd rather do six months and just start catapulting myself to the senior ranks. So I got a little starry eyed with that idea and started, you know, looking very seriously into leaving the company so that I can go back to business school
Patrick (CEO of WSO): [00:11:12] Was the thought, Hey, I'm going to come back and be have a more of a business or leadership role to in a technology firm? Or were you thinking, Hey, I'm going to go straight into finance? Did you know kind of when you as you were
MentorX: [00:11:24] Thinking, I actually did? Yeah, that's it's another great question. I kind of did. I didn't know that I'd be where I ended up in financial services. What I knew was that for my specific combination of skills, if I added, you know, you know, very significant credential, an MBA from a top school, if I added that to the repertoire, if you will, I felt I had a great, impactful potential story for the venture capital sector within financial services. So, yeah, I was I was very focused on actually. It wasn't on going back to this company. Not that I absolutely love that company, by the way. To this day, I have so much affection for it and the people that I worked with there. But, you know, so nothing negative. I just I felt that, you know, the place I wanted to be was in venture cap, you know, finding, seeding and helping to grow young upstart technology companies. But like you didn't, you didn't market.
Patrick (CEO of WSO): [00:12:18] You didn't. Or at least from what I can see from your background, it wasn't like you jumped into VC or helping upstarts. It sounded like you went really more into the wealth, you know, larger wealth management of these large bulge bracket banks for a while.
MentorX: [00:12:30] Right? You're exactly
Patrick (CEO of WSO): [00:12:32] Right. So let's so let's start. So you get out of your at Kellogg. You know, you kind of start school when you're during the depths of the financial crisis and you come out or, you know, it just 09 to 2011. So you come out, it's, you know, the economy still not doing great. It's kind of on its on the mend and you end up at a wealth and wealth management practice. Tell me about that or what was the thought process there something we're like, Hey, I'm good, I'm good at sales, I'm good at building a client base, or how did you go about thinking about that?
MentorX: [00:13:05] So that's a it's a great question, so that goes back to where we started the conversation, I believe a little bit, which is that I didn't actually intend to end up where I ended up. So you put your finger on what was probably, you know, the I would say, the energy in the financial services sector that ended up guiding me in the direction that that I went. So I did. I came out at business school like right after, you know, the absolute depths of the financial crisis and discovered as many people at the time did that even graduating from one of the world's most, you know, you know, prestigious business schools. The opportunities you want in that sector may just not be available, and that was the case for me in venture capital. I mean, you know, if you look at 2011 venture capital, the industry shrunk, but I'm just pulling numbers out of the air. But I remember people talking at the time like it just seemed like the industry shrunk by almost 85 percent. Like overnight, you know, thousands of small venture cap funds and firms just literally rolled up and they were gone. And the ones that were left, you know, there wasn't a lot of opportunity. They weren't looking to broaden their teams and increase the size of their firms, and there was no capital really to invest. So there was no opportunity there.
Patrick (CEO of WSO): [00:14:16] But why? Why go? Why go? Wealth management? Why not go invest in banking or management consulting?
MentorX: [00:14:23] Perfect questions, so I knew I didn't want to be a management consultant that I knew for sure because I was already kind of like at a place where, you know, thank God. Like I said my whole life, I kind of feel like I didn't always see things, you know, quite far in the distance, like, like some other people. But at this point in my life, I started seeing certain things and I just knew myself and I said, Look, management, consulting, it's just not for me. I don't want to be on an airplane, you know, three times a week. I don't want to be living away from my apartment four or five days a week. I don't want it. I just don't want that racket. So I knew that that was just completely not an option for me. I wasn't even entertaining conversations about that, but I knew that, you know, venture cap was something I wanted but wasn't didn't seem to be at all in any shape or form available. And so I did. I said, You know what? I banking's probably a very good fit because if I can perhaps find a role within, you know, a team that covers the tech sector, I know these companies like the back of my hand. I actually worked for one and competed against all the other largest ones at the time. I mean, I could be very effective. So I thought that that was potentially a good fit and I started pursuing that. But again, I just wasn't having very much luck. It's not like I was getting interviews and not getting the job. I think I've always interviewed very well. I've always told people, like if I get to interview, I have a 95 percent chance of getting the job. I wasn't even getting the interview. It was really a bad time.
Patrick (CEO of WSO): [00:15:43] Oh, it's just it's just a horrible time. Yeah, that's true. But you're coming from a you're coming from a top MBA. I'm surprised you got no looks, I guess, just because you didn't have the finance background on top of it.
MentorX: [00:15:54] Yeah. So I had an engineering background. And so like, you know, I guess it just wasn't for whoever was seeing the resumes. I wasn't even getting a call. So what was interesting was with my resume and my profile, if you will, et cetera, making its way around Wall Street for these investment banking roles, tech sector coverage, et cetera. It was picked up by a financial services firm that called me and said, Hey, you know, the basic pitch was we typically take people from outside financial services without a financial services background. That's specifically what we look for, who have very deep experience and expertise in a sector and who have a certain profile. And we then train them to do the following, and the following ended up being, you know, sort of this like very cool potential life as a private wealth advisor. Like if you can, you know, if you can translate the, you know, the complex technology world to business people and get a message effectively across to people who are going to be looking to deploy capital and invest in the technology sector from a business perspective, you know, they felt and it was their sort of recipe for success and building successful advisors. They felt that they could train the financial side of things into somebody who was really good at that type of thing in the first place. And that totally
Patrick (CEO of WSO): [00:17:15] That that makes sense. I get that. I guess my question to you would be, isn't that like jumping into wealth management, coming from an MBA? Like, I mean, I know a lot of people coming out of their MBA, they have a lot of debt and they need to like, make money fast. Is it like wealth management? Oftentimes, like you're building your book of business, you're building your client base for like years before you start making any real money? Or is this is this something where? This specific firm helped you kind of scale that faster somehow.
MentorX: [00:17:43] Yep, so yes, on all counts. So that's one of the reasons that like when the guy first called me, I basically hung up on it. I mean, not literally almost kind of like out of a movie. I was just like, Yeah, dude, no, just not for me. And I also don't want to be kind of like molesting people's, you know, back pocket for their wallet and sizing them up. Just the whole thing turned me off. It just wasn't for me. Yeah, but he was very persistent. He was very persistent. He was like, No, no, you should just listen, hear this out, called me back, et cetera. Kept talking. And ultimately, you know, at the time, you know, I'm going on already, like venture capital unavailable. I'm betting he's not going to back, you know, it's like I'm starting to get a little nervous and I'm like, All right, the world is definitely a different place post-financial crisis. Like you said, I have these debts, I have student loans, I have bills to pay. And you know, the more he talked, you know, he started talking about the potential earnings. You know, you're talking about very significant, you know, low seven figures, type earnings potential if you're successful in those roles. And then looking back on it today after so long in the seat and in the industry. It's true. I mean, I work with people who are making, you know, low seven figures in three to five, sometimes seven, $8 million a year, consistently year after year after year at a very, you know, very consistent pace. And so like as I started to do my research on the industry and my research on the firm that he represented and hear the story, you know, it started to actually appeal to me and I was like, Well, you know, it's not what I want, but hey, you don't get everything you want in life. Sometimes you sort of have to, like, make do with what's available given the circumstances. And it's not like the circumstances where I just wasn't qualified for A or B, like the financial services industry was a smouldering heap of what it once was after the financial crisis. Like, we're still getting over it in some ways, you know, over a decade later. Yeah. So, you know, to answer the part of your question about like, Hey, you know, you need to pay bills, where's the money coming from? So this firm paid an extraordinarily impressive base salary. It wasn't a typical wire house firm. It wasn't like, you know, one of the warehouses where they pay you 35 grand a year and then you know, you got to hit the phones constantly and sort of like, you know, bring in a dollar today.
Patrick (CEO of WSO): [00:19:55] Can we can we talk about that? Can we talk about that industry? Because like, there's a lot of that in terms of these smaller asset managers and like you said, they call these wire houses where they pay you, either they're extremely low base or no base. And a lot of it's just based on the number, you know, the amount of assets you can bring under management and they give you, you know, your cut. Can you talk about the economics of that just to explain to the listeners what that means and typically how much you'll have to bring in and what some of these firms look like because I don't know what that well, to be honest.
MentorX: [00:20:25] Yeah. So yeah, so I could I mean, I could talk your ear off about this. Once you stop me, it's like, No, it's going to get to long.
Patrick (CEO of WSO): [00:20:32] Just like just a synopsis, like a summary of like the types of firms, what to watch out for and what's a good place to be. Yeah, it sounds like it's kind of obvious, but because yours had a high base salary, so it's like they're investing in you, right?
MentorX: [00:20:43] So yeah, absolutely. And that's something that really appealed to me, right? I wasn't going to go anywhere. That was saying, Look, we'll give you 35 grand a year. I mean, I was making, you know, multiples of that at the technology company before I even went to school. So to me, it was almost like a joke to hear someone say that right? But yeah, so it comes in the industry, you know, the industry is kind of split. I would say in two sides, you have what was generally referred to as the wire house model and then you have it was referred to as sort of the RIAA or, if you will, not in the Iria space, but maybe in the like, you know, tier one financial services firms out there, the model where they'll pay, you sort of invest in you, right? They'll pay you a relatively significant base salary while you build your book of business. And they, you know, they have all different terminology for how they refer to that salary. Some refer to it as like a forgivable loan. Some refer to it as a draw that you never actually have to pay back. It's like a draw in future earnings. But the dirty secret is you never have to pay it back. So the wire model there's, I would say, far larger numbers of firms out there that work on the hey will give you a stipend effectively, you know, 35 45.If you're lucky, maybe fifty five thousand dollars a year and you have to bring in x hundred x number of $100000 accounts like literally within weeks and then from there up to quarter million and then from there 500000 and then from there a million. And you just really have to very aggressively ramp up how many accounts you bring in, how much money each account has in it. And based on that, you'll earn certain bonuses and that'll get you to potentially, you know, a half decent, respectable income. But, you know, I don't want to sort of sound negative on it for people that are going to go that route because, you know, cuts both ways. My view on it, however, is that that side of the business and that model generally just grinds people out. And there's a tremendous amount of burnout. It's just, you know, within three to four years, something like 90 percent of the people that go into that role in that model are gone, and all of the accounts that they brought in over that time accumulate to the senior advisers that they were bringing them in for. And it very much seems like that old Wall Street, you know, movie model where, like, you know, young people are out there working themselves to death like, boy,
Patrick (CEO of WSO): [00:23:03] It's like boiler room or whatever they call that show.
MentorX: [00:23:05] Yeah, yeah, exactly similar to that. Like, you're not slinging stock, right? Nobody does that anymore. You know, that model is done, but you are literally hitting the phones and making 600 phone calls a day. You know, maybe not literally, but just endlessly. You practically have a phone duct taped to your hand. Mm hmm. And you know, you're just so desperate to get an account in the door. And it does feel great and like if you're young, just out of school or whatever, it's exciting. It's dynamic and the world is your oyster, et cetera. But the reality is, most people don't make it in that model. They just don't. Now there's the other side. The other side is the firms that will say, Look, you know, that's not what we're looking for. We'll pay you a very respectable base salary. We'll recognize that you're coming out of a top school will recognize that you have talents, abilities and skills that are, you know, more significant than what we could probably teach a, you know, an intelligent dog to do.
Patrick (CEO of WSO): [00:23:58] So you're like salaries be like sixty to a hundred k kind of thing or even more as an MBA,
MentorX: [00:24:04] And it depends on the level. So if you're coming out of school, this is going to be much, much higher than that in the salaried side of the model, the salaries for, you know, previous. I'm sorry. Four recently graduated, you know, top business school candidates is closer to just under $200000. Like, you know, looking at probably one, I would say, you know, 140 to 170 is probably the range.
Patrick (CEO of WSO): [00:24:30] So they're really investing in you because you have you're bringing in. No, I I think you're bringing in nothing right to the firm initially, right? So they're really investing you in you and expecting you to stay there for a certain number of years to bring in kind of I mean, are you expected to bring in accounts still or is it more like, Hey, where you're going, we're going to use your expertise to service the existing accounts we have?
MentorX: [00:24:53] So, so it's a little bit of both. So first of all, you're 100 percent right. It really is, I have to say, and that's a big compliment to the business. They are absolutely investing in you. If you multiply that number and the expense of supporting an employee at that level with health insurance and vacation and benefits and everything else. If you multiply that number by tens of thousands, you know, because you know, in many of the big firms, they do that over the years, it's tens of thousands of people. You know, you're talking about an incredible amount of capital that they're investing. So they do actually they expect you at some point in the near future after you're hired to go out there and start bringing in significant relationships. But consistent with this model, where they understand that they're making a long term investment in you. They know that you're not going to be landing these, you know, $25 million type clients the day after you get there. And so your time is going to be occupied by servicing existing relationships as well. And that's where they kind of expect you to cut your teeth, you know, really start to understand how the relationship dynamic works in the business, what it's like to interact with clients, the types of needs, the types of profiles of the clients that they have are, you know, the types of demands that clients make on your time and on your on your human capital, right? Like, you know, they come to you with the very complex or sophisticated problem of some sort, and you have to try and figure it out with the senior advisor on the desk. You are. You're I mean, you're using that individual for a skill set that they brought to the table. That's far more impactful than just, you know, dealing for dollars, so to speak.
Patrick (CEO of WSO): [00:26:26] So should I think of it as like the wire house oftentimes is trying to attract individual high net worth individuals, high net worth individuals versus the larger firms you're paying you. The higher base are typically going after institutions or other types of clients. Or is that?
MentorX: [00:26:44] Yeah, no. So the way? So the way it would, the way it breaks down is, I would say, think of it like this. So there's what's, you know, sort of referred to in the industry as, you know, the mass market wealthy, right, which is, you know, call it 500000 to like a million dollars in investable capital. And then you have the five million in investable capital that's generally considered a high net worth individual. And then you have 10 and up, which in some firms is still what's referred to as like high net. And then you have 25 and up, which is considered ultra high net or super high net. And then from there, I mean, 25 and up, they don't continue to slice and dice the market. But you know, you have people with six, seven, $800 billion in investable capital. You know, those are those are sort of the whales that everybody's, you know, dreaming about every day in the business. But yeah, so you know, the wire houses are typically looking. And by the way, in each one of these firms, even in the wire houses. There are different groups, so the bulk of the activity is happening in the groups that are looking for the 250 and $500000 type investor to, you know, call it a million, two million, three million. That's where like if you look at, for example, like what used to be a Merrill Lynch 16000 advisers,
Patrick (CEO of WSO): [00:27:58] You know, that's who they're doing. They're dealing up all those individual messages or
MentorX: [00:28:02] Over 85 to 95 percent of the people in that 16000 500 adviser pool are literally just, you know, dealing out, looking for people with a few hundred grand to invest, maybe a million dollars to invest. Now within Merrill Lynch, there was always other groups. You had these groups that were like, you know, the private, you know, bank type thing within Merrill Lynch, which is now part of the. Same thing with Morgan Stanley. You know, you had tens of thousands of advisors and then within that pool, there was, you know, this top tier where it was, you know, only the ultra high net worth only the super wealthy. So yeah, that's sort of how that side of the business broke down.
Patrick (CEO of WSO): [00:28:39] How do you get into that ultra high net worth tier? You just become you build a huge book of business at the lower tier and then they say, Wow, you're really good at this or is it something else to get you to that top?
MentorX: [00:28:48] So there's a couple of paths, right? So you could look for a firm that basically only deals with the super high net worth where, you know, a 500000 or a million dollar account. It's not reality in a firm like that. Firms that generally deal with, let's call it, 10 to 25 million and up where I worked, we were looking almost exclusively for people with 25 and up. And so you can look for a firm like that because then from day one, you know, again, the firm is investing in you. You're not just dealing for dollars, you're actually using your, you know, you're using your mind and your brain, and they're leaning on you to really help be an integrated part of a team and bring a lot of value to the table. So how do you how do people start your career? How did
Patrick (CEO of WSO): [00:29:33] That? How do people figure out where and where can you find a list of firms like I know we have a company database on debut or so, but I don't think we have it based on. I guess you could do some Google searches in terms of ultra ultra high net worth, you know, asset managers or, you know, I guess.
MentorX: [00:29:47] Yeah, that's exactly right. That's exactly right. But you can do that. And you know, there are firms out there without, you know, mentioning any names that sort of everybody knows only deal with the super rich like, you know, they don't they don't take small accounts. And there's again, we're not I don't want to in any way sound like we're denigrating a pool of capital that's smaller or larger is greater. No judgments, zero judgments. It's just, you know, absolute numbers. There are people with 25 and up, there are people with 10 and up, and then there are people with 10 and below. And different firms build their model to service those types of clients differently. And there's a reason that it works that way. It has nothing to do with, you know, you know, viewing the person as any better or any worse. It's just how the model works.
Patrick (CEO of WSO): [00:30:30] So let's go back to your story a little bit. So you're you kind of join at a school. You get convinced this is something for you. They're going to invest in use. You're at least getting a nice base salary to help pay off some of your loans. And you can survive. And I assume you were in New York and pay your rent or or whatnot. And and then so you're, you know, you're there for a year and a half. You go to a bulge bracket, you're there for a couple of years, you go to another bulge bracket or there. Is this typical for someone to jump to a few places. I know I've heard, like you can bring your book of business. What was the case for you, for your specific story? Yeah.
MentorX: [00:31:05] So that's for the for the listener. That's also, I would argue, a very good question. The shortest answer I can give you is no pre financial crisis. It certainly was not typical in the asset management space and the investment management world. The name of the game is longevity. The longer you stay in a single seat at a single firm, the higher the probability that you will ultimately get into that seven figure earnings bracket. And the reason for that is because significant investors people with 10, 20, 30 plus million dollars to invest or even people with, you know, two or three million or even 500000 when they're looking for an advisor to manage their capital and invest their capital on their behalf. They're looking for a story of stability, consistency and strength in a seat, right? So actually kind of works against you now as many of your listeners will probably already know or perhaps learn after they listen to something like this, you can just look around and see that advisors jump from firm to firm. There's a reason for that. After a certain point in your career, you can jump from one firm to another, or at least you used to be able to. And the reason that advisors did that is because Firm A, you know, where they're sitting, they've reached a certain point. They're making a certain amount of money. Firm B comes along and says, Hey, we will pay you forward for your book of business. If you can demonstrate what the revenue looks like and how much you know we'd be making off of it, we'll pay you, you know, x number of years in advance to come on over. And when a book of business is generating a few million or. A million, three million, $5 million a year in revenue for the firm, just take five, it's an easy number to multiply. You know, if a firm comes to you and says, Look, we'll pay you four times your annual revenue to move your book of business here. You know, you're talking about $20 million up front and you know, they structured as a forgivable loan. Your responsibility is to move the book of business, and a lot of it is sticky, you know, doesn't always move, which is what a lot of the firms that were doing this for a while learned. But yeah, so that's why you'll see a move now for me. So why arrivals from A for A, B and C.. Well, Firm A, as I said earlier, failed like they kind of were on the brink of literally receivership. So, you know, that wasn't by choice. So I went from there to firm to firm to was an absolutely wonderful, fantastic place to be. But the model from a compensation perspective, there was unique. The compensation model, there was salary bonus. It was never based on, you know, entirely on the amount of revenue that you generated. So in other words, you had a salary and your bonus was based on a complex formula of whether or not you hit a certain number of metrics from a revenue generation perspective on these different buckets of investing options for clients. So it was very complex and you couldn't really control like even if you had an absolutely gangbusters year, you know, let's say you brought in, you know, this just absolute enormous amount of capital, but that capital didn't get fully deployed in that year or even if it got fully deployed, it didn't get deployed across the specific investments that the firm was more interested in seeing clients in. You still weren't going to be able to achieve the types of numbers that you thought or hoped that you could give
Patrick (CEO of WSO): [00:34:26] Me or give me a range there for that. So like, what was what were you seeing at your first place? I mean, I think you were getting high six, you know, or you're getting six figures, you know, one fifty one sixty base at your first firm that ended up failing. Where did you get any bonuses before you left there? Or was it just all going downhill by the time?
MentorX: [00:34:44] Yeah, no. There were, no, but they were very generous to us. Actually, I'll say like they did the right thing. They paid us out six months when we left, which was very nice to them, but there was no bonus. Got it on
Patrick (CEO of WSO): [00:34:55] The way out. And then so when you get to the second place, what was it a similar base or was it lower or higher? What was what was it looking like?
MentorX: [00:35:01] Yeah. So that was another sort of like trick of the trade at the time. They'd ask you for your W-2 and they would say, All right, well, this is what you were earning there. This is what we'll pay you here. You didn't you didn't really achieve any any bump, unfortunately. Ok. You know, there was no way to, there was no way to increase it. Everyone was just kind of doing the same thing. Now you can't do that anymore. I think in New York, it's legal. Companies ask people for their W-2s anymore, which is actually, I think, a good thing because I felt it was unfair. I felt that like, look, you know, if you're if you're able to negotiate a better salary for yourself on any decent basis, why should you be limited by what you were paid yesterday? Why not just pay me what the value was? I think I bring is instead of saying, Hey, that's what you that's what your pay check was yesterday. That's what it will be tomorrow. Got it. But yeah, they matched it.
Patrick (CEO of WSO): [00:35:46] So OK, so they matched it. You go in and beat this complex bonus structure. What did end up actually coming out to be those couple of years you were there? So was it another fifty thousand one hundred thousand? What was
MentorX: [00:35:57] It? Yeah, no. So you could. I mean, listen, you know, I don't want to. I don't want to minimize it. You could do very well, right? The complex bonus structure, et cetera. So you could like listen, if you were making one hundred seventy five or close to 200 grand a year and base salary, you know, you could you could add another in the first year. Typically not, but you could add another hundred thousand. And then the second year, if you did very well, you could add another 200000. And in the third year, around the net, if you if you're there five, six, seven years as your book of business grows and as your team grows, as you start to really figure out how to, you know, make sure that dollars were flowing in the direction that you know, the portfolio managers and chief investment office and all that felt were, you know, the best place for those dollars to flow. You, you know, people, senior people there that have been there a long time that were, you know, sort of operating very effectively. They were making, you know, consistently, I would say, between 500 and 800 thousand a year. They'd have a year here or there where they would, you know, have just a gangbusters whatever year and they kiss their managers. But enough and still the manager, whatever it was like, they'd get like a seven figure bonus, OK? But typically it was like, you know, the steady run rate was somewhere between like four and seven. So average
Patrick (CEO of WSO): [00:37:19] It out. That's fair. Yeah. So talk to me a little bit about. So were you getting those first few years about one hundred k bonus then in this first year? Or was it something where like, you weren't getting it into the right funds? And what were those right funds is something where the firm itself earned high? Higher fees of some sort or what? What were they trying to funnel these clients money into? Specifically, why, you know, why were certain places given higher bonus structures? It's just products they were going to promote.
MentorX: [00:37:47] That's a great question, and I could talk about this one extensively, but I'll keep there's been. No, I'm sure it's possible. Sure. So, yeah, so actually no. Again, remember, let's paint the picture. So at the time, you're still pretty close to post-financial crisis. You're coming out of a firm that basically just kind of like was in a controlled failure. You know, Wall Street wasn't giving out bonuses. They just they just weren't. I was lucky to get anything and I did, and my team did. And you know, it's not like they were literally shutting off the spigot because people would have. Everyone would have bolted. But the bonuses were pretty small. So I think if I remember correctly was going back a ways. I feel like my first bonus there was, you know, it was under 100000. It was somewhere like in the 60 or 80 range. So, you know, again for, you know, relatively young person, great income for the year, we add it all together. It was, you know, just under 300 grand, which I think a lot of people would be very, very happy with and I was at the time. But I, you know, again, like, I kind of like thought it was, I thought I was going to be earning more. I just, you know, based on what I was doing, my activity, what I was bringing in. So, you know, second year similar story, and that's what started becoming disappointing. It was like it just seemed like no matter how successful you are on so many metrics. Yeah. If the firm just didn't want to give out more capital, they were going to find a reason not to.
Patrick (CEO of WSO): [00:39:08] So how much how much revenue you think you are bringing to the to the firm itself? Again, how much revenue do you think you're bringing into the firm for getting that?
MentorX: [00:39:17] So another great question. It all comes down to formulaic approach. So when you bring in money, for example, let's say you bring in, you know, even numbers, you know, a million dollars when it goes on fee, let's use one percent, right? Because that's how the industry typically works. You know, fees are around one percent. That's going to generate X amount of revenue right now. Here's the issue when you bring in a million dollars, what part of the year did you bring it in? Did you bring it in in January or did you bring it in in June? Or did you bring it in October? Because and the reason that's important is because if you brought it in on January 1st, then on December 31st and he got it all on fee on January 2nd, then on December 31st, they look back 12 months and that million dollars was productive for the entire year. And so that revenue is recognized in its fullest capacity for the entire period that they're measuring, right? But if you brought that million dollars in in June and it's just sitting in the account and then you didn't get it invested until call it November, which is possible sometimes, by the way, you've got to have multiple meetings with the client, you've got to structure the portfolio, you've got to get them comfortable, you have to get agreements, you got to get paper signed. It could take months. It could take because you're dealing with large pools of capital. It's not typically a million dollars, it's 10 million or 40 million. So, you know, deploying that type of capital can take time. So, you know, you bring it in in June and it gets invested in November. You know, part of it, right? If it's 40 or 50 million, you know, you get five million invested and you get another eight million invested a few months later and you get 10 more million. So it takes time to deploy capital. It just does. It's a fact of life. So, you know, you don't get really recognized any of that revenue, right? So even if you brought it in on January 1st, if it took you 10 months to get it deployed and then by the 11th month, it's all in and it's all on C, you could literally have brought in $100 million, which would have generated a million dollars in revenue in your mind, right? You know, one percent, 100 million a million dollars in revenue. If the firm was willing to give you a bonus of Exxon, that whatever that is, that's what you were hoping to get. But then you sit in the office with the manager. It's like, Oh, well, you did a great job. You brought in this amazing account. It was $100 million really moves the needle, big bat, big slap on the back. All right. So you're like looking at them expectantly, like, all right. So what's the bonus going to be like? Well, you know, it didn't go on fee until this one this time, and then it didn't really generate the amount of revenue that you know, you would be entitled to earn this type of bonus on and blah. So there were always like, you know, all these explanations for why you weren't going to actually get the bonus that you had hoped for. Now, as far as the other question that you asked, like where the firm wanted the money to go, the answer is unfortunately, yeah. In a lot of cases, the firm wanted the money to go into specific types of investments that, you know, if you didn't always agree that that was, you know, where the money should be going based on your client's best interests, you didn't have to put the money there because you want to do what's best for the client. But if you didn't again at the end of the year, the firm would look at things in buckets and be like, Well, private equity didn't get as much capital in your particular portfolio. As you know, we were hoping, right? Let's say they wanted private equity to be on average, you know, 20 percent of a client's portfolio if the client qualified from a financial perspective, you know, and your client's portfolios were at 15 percent because you were a little bit more conservative, you know, you were penalized for that financially. Like they wouldn't literally. Tell you, like, oh, shame on you. Just like, all right, we understand you have a view, they'd respect your view, but they say, look, the firm's view is different, so you know you've lost a little bit of compensation. So it did. It did act as a catalyst to get you to sort of march to the tune of the chief investment office. Now, by the way, just to give another explanation to that, it wasn't just specific investment products. It was also services. And so this is a very, very big firm. And they offered both investment banking credit one, et cetera. And so you were also measured on how much money did you lend to clients, right? If you have call it a billion dollar book or a $5 billion book? The firm expected certain percentages of your total assets under management to be represented as credit, you know, like loans on jets, loans on yachts, loans on expensive houses, loans on art, on that sort of thing. And then the firm also expected a certain amount of that capital to be deployed and other services that the firm was bringing to the table. So if your book of business was an engineered, if you will, to use a phrase from the beginning of my career very, very perfectly to look exactly like what the firm wanted. You weren't going to get your full compensation. You weren't going to get
Patrick (CEO of WSO): [00:43:47] Was the what was the delta not like it could? It could be a difference of like 20 percent, 30 percent in terms of like instead of making, you know, four hundred thousand or five hundred thousand you'd make like it could drop as low as three fifty. Or was it more like on the margin?
MentorX: [00:44:02] Like, No, no, no. That's exactly right. It could be very significant. You know, if you thought you were going to have a six or $700000 a year, you could end up with. And again, these are again, I know how gross this could sound to the outside world. But you know, just talking absolute numbers if you expect it to have a six or $700000 a year for some reason, you know when you're new to the game, if you will, because if once you have experience in it, you can run the numbers and see what you're going to miss, right? Or, you know, but if you're new, you're like, Oh, you know, you kind of like green and you're, you know, fresh at it, like, Oh, I brought in all this money. I got some capital deployed. I'm expecting like this, you know, making, let's say, 180. And like last year I got another like 80. So maybe this year I'll get another one fifty, right? No, I mean, you could you could end up in the same place that you were the year before, which is what happened to me. And I just walked out of that experience and I was like, Man, that really kind of sucked. You know, I worked really hard.
Patrick (CEO of WSO): [00:44:54] You just really screwed everything
MentorX: [00:44:55] I was supposed to. Yeah, yeah, I'm going kind of screwed
Patrick (CEO of WSO): [00:44:57] Said I'm going somewhere else then. So you started looking right away, right?
MentorX: [00:45:01] So no, I didn't actually, that that was sort of that was blessing. You know, again, I don't want to alienate your audience, but I kind of saw that as kismet. Honestly, I thought I was going to stay at this firm. Despite that, I just said, You know what? I'm going to start tweaking my book and my business and et cetera. And sort of like, you know, I'm going to now that I understand the system. This was now year two, like the first year I was just coming up. Second year I was like, Wow, OK, this was a real learning experience. Third year, I was like, All right, this is the year I'm going to start really like getting this down, and I'm just going to end up reflecting what the firm wants to reflect and client portfolios so that look, you know, the chief investment office is there. It has a function. I don't think I'm smarter than the chief investment officer. And, you know, I'm going to start having portfolios sort of match that model, if you will, a lot more closely so that, you know, I can earn what I hope to earn. And so that, you know, client portfolios perform exactly the way the chief investment office wants to see them perform from a risk and volatility and return perspective. These are all good things for clients. I don't want to make it like, I don't make it sound like we were just doing things just for ourselves. These were honestly like, you know, at the end of the day, the firm was looking to do good things for clients, and that's the model they thought would, you know, fit in order to achieve that outcome. And so I said, OK, I'm going to I'm going to march to that tune. You know, it's important to march to the corporate tune. You're there for a reason if you don't believe in it and don't be there. So I said, I'm going to do that. And you know, time was going on and I went to a I went to a an event. It was an industry event where I was hanging out with a friend of mine who was there with a guy, a very senior guy from this other firm. And we were just talking and, you know, we hit it off really well. We stayed in touch and over, you know, a very short period of time, actually. That firm had started to ramp up recruiting as well. Things were getting a little better right now. Your festival or you're in, you know, the mid-teens and you know, firms were starting to be a little more aggressive about hiring and investing and building the business. So he say, you know, he was like, Hey, by the way, look, you know, just wanted to know if you ever consider moving over here, you know, if you think some of your clients will come, if you don't think the community can have a conversation about it, et cetera. But you know, we generally we're not depending on you to bring your book of business. We understand that, you know, you may be starting from scratch. And so here's how we'll invest in you, et cetera, et cetera. But we really think that you'd be a value add here, and we think we kind of have, if you will, to use an overused term. We kind of think we have the best mousetrap in the business and by mouse trap, I don't mean like just a trap clients, I mean, like, you know, the figurative expression for we think we have a really, really the best model in the business for clients.
Patrick (CEO of WSO): [00:47:47] Why? Why do they say what was the rationale behind that? The technology behind supporting you guys the what the.
MentorX: [00:47:53] Yeah. So it was it was everything this firm actually sees itself, and I say it with affection. This firm sees itself as the firm with the absolute, the absolute lock on the smartest, hardest working human beings in the world. They, you know, and in a lot of ways, they really do have the smartest, hardest working people in the world there. So first and foremost, a human capital advantage, they felt that they had over the firm that I was at. And they feel and believed in a lot of ways that that human capital advantage led to better outcomes for clients. And so the story was twofold. Look, first and foremost, we employ the smartest, hardest working people, and we feel that as a result, we get better performance and better results for our clients. And so therefore your clients would actually be better off here, number one. Number two, we also invest far, far more in our technology than the firm that you're at. Or at least we believe and we think that our technology is superior, the technology being portfolio construction and portfolio management, you know, all the stuff that goes into managing large pools of capital for high net and high net worth clients. And then incidentally, we think our brand is stronger. So you'll be able to attract larger, you know, more call it, you know, more significant clients in your career going forward. And finally, and you know, you know, arguably for a lot of people, a very important part of the story. Our compensation model is all fee based. We will pay you very well for a number of years until you get to the point that you know your compensation cross is over to full only on fee. Yeah, but ultimately, once you get fully on fee, there's no there's no ceiling. So instead of having like this, you know, complex. Yeah, five six hundred $700000 ceiling with a pop once in a while. If you were a really good boy or girl, you can earn seven figures every year. Midheaven figures, you know, over time, consistently, there's just there's no ceiling and you control your business. And by the way, the firm doesn't look for you to to have capital in specific buckets and in specific areas. You construct portfolios however you want, as long as it's in the best interest of the client and you're doing well by the client, the client feels that they're being served properly and everything is above board. You run your own show. You really are master of your own domain. So it was a great story.
Patrick (CEO of WSO): [00:50:17] So why leave after you were there for a while? It seems like, you know, the sky's the limit for someone like you, you know, great at bringing in business. Good talker, good at managing. Know, I assume you're good at managing clients money and doing a great job. Why? Why head out? Why leave? Yeah.
MentorX: [00:50:35] So it's a great question. So twofold. First and foremost, you know, my similar to, you know, as it's kind of the whole story started, I always like had my eye on, you know, let's call it the more senior ranks in organizations. And that's sort of where I always wanted to be. I kind of always wanted to be. I kind of wanted to be running either an organization or a significant part of it. And you know, how much money I could make is important and certainly a motivator, and certainly something that, you know, will catch my attention depending on the story. But it isn't everything. And and so, you know, over time, that's where. So in this in this environment, I was dealing with a lot of very, very wealthy people. In some cases, people with, you know, tens of billions of dollars in accumulated wealth and a lot of them had family offices. And in a family office, you know, you're not part of this big, gigantic firm with all its pluses and minuses, and you get to sort of run the show if you know, if you're running the family office for this person or people and you do get to call the shots, you do get to do sort of like, you know what you feel is best. You don't have to have everything cleared 100 different times by a dozen different people, et cetera. And so there was, you know, there was this thing that was sort of in the back of my mind along the way like, Oh, this is an interesting space, you know, maybe at some point it's something I should look into. And then, you know, if you get into the right situation in a family office environment, you could actually start to participate in investments with the family that you're working with. And there's a lot of there's this a lot of interesting and attractive things about it. So it's something that was sort of in the back of my mind. All right. Didn't think of it for, you know, when it
Patrick (CEO of WSO): [00:52:20] Basically there's a lot, there's just there's a lot more autonomy, even more autonomy than what this bulge bracket could offer you. And on top of that, you have potential other deals and co-investment opportunities almost alongside the family, which provides significantly more upside, I guess. Is what you're saying,
MentorX: [00:52:35] That's that that's in summary. Yeah, that's mostly
Patrick (CEO of WSO): [00:52:38] Right, and is that the is that the reason you felt like? Well, it's just an exciting thing, right? It's exciting because you're it's more entrepreneurial. But is that the reason you feel like you eventually jumped or is just this this specific opportunity?
MentorX: [00:52:51] Yeah, it was a culmination of a lot of reasons, but being in the first firm, that kind of like sort of fell apart underneath me and then going into the second firm where you slowly learn the politics, the games, the bass, you know, the excuses, et cetera. And then going to the third firm, which is like, considered, you know, master level finance. And there again, like not to sound all negative, but you really do you find that like, look, there's a culture, there's a pecking order. You know, there's you know what I refer to affectionately as repatriation of capital to other people at the firm, you know, capital that arguably should have been yours, you know, for work that you literally did and for clients you actually signed. And so that what I found was that in the industry as a whole, that theme was consistent. No matter where you were like firm a firm, be firm. See, that story was just true no matter where you were, no matter what the model was, right? And there's a culture you don't always agree with a lot of things in the culture, you know, and if you know, if we discuss these firms names, people would know instinctively, like, All right, yeah, this firm has a reputation for this or for that. And again, not to denigrate anything or anyone. But listen, there are people who can sit in a seat and swallow that for 20 years and then retire very wealthy after, you know, long time making consistent, significant income. And then there are people like me who honestly, you know, I look at it and I'm like, Look, I don't like limiters on my growth. I don't like I don't like things to sort of like, hold me back, and I don't like to march to the tune of a corporate culture that sort of sees people that start in a certain seat as a source of revenue that they can continue to repatriate pieces of that revenue to other parts of the firm or other people on the floor, you know, because that's sort of just the way it works and it would get up long enough.
Patrick (CEO of WSO): [00:54:41] So it was uncapped, but it was still a big percentage of what you were bringing in was still being kind of shared with the team, even though you were a top performer.
MentorX: [00:54:49] Yeah, well, I mean, 100 percent of what you're bringing in was given to the team for a small period of time, and then once you crossed over a certain number, 100 percent of what you were generating was going to go to you. But then you find that it doesn't actually work that way because if you're on a team, then you kind of have to continue to give the team a certain amount of that revenue because the team supported you while you were getting there. And then once you get past that point, it's like, Look. It, the team is in place, so you have to support the team. You know, it's just you continue to find that as you as you peel back the onion at every different layer, you find another layer where you're like, All right, I get it. You know, you kind of got to be a good citizen. You've got to be a good corporate soldier. Mean, like, all right, fine. I get it. I understand it's still not there. It's still not there, you know? And that's OK. Look, I don't I don't knock it. It's it really is fine and it works. It works very well for a lot of people. I guess I just, you know, where I was in my life and in my career, I just felt like, Look, that's cool. It's good for the people who are OK with it. For me, I think I want, I think I want less limitation, more autonomy, and I maybe I want to be on the other side of the table. So as that, you know, was a growing thought in the back of my mind. I was pretty close with a couple of clients and thought, you know, maybe one day I could work for one of these people or do something maybe a little bit more exciting than managing large pools of capital for very wealthy folks like help them run their business. Like, I had a client who had this gigantic business of doing a billion dollars a year in revenue, and they were manufacturing this very cool thing, literally manufacturing not like, you know, software, but actually making it a thing. And he used to talk to me all the time about like, you know, maybe helping run his company and you're like, Wow, that's actually really cool. You know, I'd like to make something. So, you know, I had that thought at one point and then it just came up one day with another client. He was like, Look, you know, my family offices is grown quite a lot and you know, you've been working very closely with us and I really believe that, you know, we have good energy, good synergy, et cetera. Would you come over and be my chief investment officer and sort of run my portfolio, run my investments, my private investments, my public market investments, et cetera? Build a team, manage it on and on and on everything to do with, you know, very decent sized family running a decent sized family office from an investment perspective. And initially, I said no because I thought there was too much risk still, and I didn't think I was in the seat at this firm long enough yet. But, you know, he continued to push this in the way of my resolve, and
Patrick (CEO of WSO): [00:57:23] He was persistent and he was persistent. He had a, I assume, a high base salary or some, some kickers. He started throwing in to try and get you to come over. Was that?
MentorX: [00:57:32] Yeah. So he offered me more money than I was making at this firm, which was significant. It wasn't an insignificant compensation structure
Patrick (CEO of WSO): [00:57:40] You mind sharing with those around. I'm sorry, do you mind sharing what that was or arrange
MentorX: [00:57:46] What it was? Yeah. Yeah, he was. I mean, he was willing to start me at a half a million dollars a year and that was before bonus and that was before any equity in and things that he was going to be investing in that he said I could ride alongside him with. So, you know, significant a significant opportunity in that respect. And, you know, also sitting in the seat, you look at a lot of these people and you realize like, look, you could get to a place where if you stay at a firm like this and you continue to build your business and you continue to do it, you'll eventually make a certain amount of money. But then you deal with all these clients who I mean, they, you know, they've made billions of dollars or hundreds of millions or tens of millions. You look at them, you're like, Well, it's interesting this, you know, this dynamic. It's sort of like almost like being a glorified bank teller where you know you're making your $35000 a year sitting behind the bulletproof glass and somebody comes in with a $2 million cash deposit and you're like, Wait a minute, what do you do for a living? This is interesting. So it's similar in that way. You know, we were very well paid, very well compensated, very prestigious firm, very great name. And you're making a very good living. But then you deal with these people who have hundreds of millions or billions of dollars and you're like, you know, how do you do that? Like if you're an ambitious person and you want to achieve more from a financial perspective in your life, you almost can't not have that question in your mind.
Patrick (CEO of WSO): [00:59:05] But could you always say, Hey, look, there's always going to be somebody with more money? Like, couldn't you sorry, couldn't you always just look at this and say, OK, well, there's always somebody with more money. So like, that's almost a risk, I would say, of being in that being in that business, right? If you had stayed at stayed at that bulge bracket bank, that top bank and kept going, you almost have a sure thing, right? Versus trying to go be an entrepreneur, for example, or trying to start your own business or helping that client with the manufacturing business or going to run a family office? Don't you feel like there's just inherently a ton of a ton more risk there?
MentorX: [00:59:38] You are a hundred percent correct.
Patrick (CEO of WSO): [00:59:40] That's right, but it's still just more exciting. And you only live once.
MentorX: [00:59:45] Yes. For some people, myself and, you know, in this case, specifically taking that risk. You know, I guess maybe it's sort of like in the blood, right? My father's an entrepreneur. My brother's an entrepreneur. My other brother's an entrepreneur. My sister's an entrepreneur. They all do different things, right? This entrepreneur, it's not like the typical thing. My father was a software developer. He started his own business own company. So I come from an entrepreneurial upbringing. My brother is an attorney, but you know what? He worked for a big firm for a very long time. And then just decided, You know what? I want to work for myself. Started his own firm and has done phenomenally well. Employs very healthy number of lawyers in his practice as an established firm for many years now. My other brother did the same exact thing. My sister is an architect, worked for an architectural firm and then started her own. So, you know, I don't know. Maybe me and my family were just built that way. Like, we'll do something for a while, but then we kind of look around and say, You know what? I kind of feel like I can do this on my own or maybe take a risk and do something a little bit more significant for myself, right? And maybe that's selfish. I don't know. But yes, you're right. It is a lot of risk. And by the way, you couldn't be more right, and it's important for your listeners to hear that if you stick with it. And you go the slow and steady and you stick with the lower risk option, which is to stay in the seat, plug away, sharpen your pencil and just keep going at it year after year after year. And by the way, I'm going to be completely frank. Suck up so much B.S. along the way. Get screwed out of so much income that just gets taken away from you. Literally taken away. They have to hear this because if they're going in, they're going to be disenfranchised. If they don't hear someone, tell them this, you will get robbed, left and right, over and over. But if you suck it up and you understand that, that's the hazing that the industry puts on you for the first and some firms for the first three years and some firms for the first five years and some firms for the first 10 years. That's just the hazing. You've got to figure out each firm's little formula for it. If you stick it out and you get through it and you ultimately persevere, you will steadily make an incredibly, incredibly impressive living and you will be very comfortable. You'll be far better off than actually than most people, and it is the lower risk option. It's just a question of, you know, if you can obviously avoid all the pitfalls of regulations and all that other stuff, don't do anything wrong, never get fired, which is another trick in itself, right? In that industry. Yeah, you'll do very well. You will. And by the way, that's what the I would say majority of people go in trying to do. Ultimately, a lot of them wash out. It's very difficult. They can't bring in the assets they the campaign and the clients. And so, you know, they have to move along and others, by the way, at the firm that I was at. There is a relatively decent percentage. It's not as high as, you know, like the other, it's not like a 95 percent failure rate. But you know, there's a large percentage of people not who fail, who do fairly well. But because you're interacting with such incredibly financially significant clientele, there is an impressively healthy percentage of the population there that over time will leave the firm to go either be CEO of a client's company, CIO of the family office, which is what I left the firm to do. They go into politics in some cases to have, you know, impact on society. They go run very large non-profits. They just do because at a certain point, you know, you want a new challenge. It's the type of person they hire. They hire very ambitious, very driven people. And at a certain point, you know, some people, even if you're making or could make lots of money, they look around at life and say, You know what? Life is not perpetual. I want to do something different. I want to do something that's maybe more rewarding. In some cases, I want to do something and rewarding as a broad term. It could be personally rewarding, charitably rewarding, financially rewarding, whatever. I just want to do something that I feel might be more rewarding. And so people, you know, move on to do other things.
Patrick (CEO of WSO): [01:03:54] That's totally understandable. And so that's what you did. And what's next for you? So before we wrap up, what do you what's the what's in the cards for you now? Do you think you're going to be kind of running this family office doing these deals? Or do you eventually see yourself going out on your own? Or what's the what's the thought?
MentorX: [01:04:12] I do. I'm going to be going out of my own. You know, I think that the time was right for me to leave and run this family office because I kind of felt that I had learned everything I had to learn. And that's not to say like I knew better than anyone. It's just what I felt I needed to learn, right? I wanted to know the business. I wanted to know the industry. I learned the positive side. I learned the negative side. You know, the good, the bad and the ugly. And I added it all up and got to a place. I said, You know what? I think for myself? I know that at some point in the future, what's in the cards for me is I want to just I want to run my own show. And I felt that taking an opportunity, you know, to be the chief investment officer of a healthy size family office was a good step in that direction. And so, you know, I took it for all those reasons. It was, you know, great competition, good relationship with the client, exciting and dynamic things that we could do together. But ultimately, because I wanted to, I wanted to have this be a stepping stone toward stepping out on my own entirely and do something completely independent.
Patrick (CEO of WSO): [01:05:24] And do you know what that that's going to look like? It's still going to be in the wealth management side or as an investment officer still or with your with your own capital.
MentorX: [01:05:32] What's the? Yes. So what? I it's funny because it's kind of like returning to my roots what I'd like to do. And you know this, this may come as a little bit of a surprise to your listeners. So what I'd like to do ultimately is move back into the venture capital space and the role that I was in at this last very large firm and within the family office. And it's part of the reason that I chose this family office. We focused a lot actually on deploying capital. Into the venture space at this last firm, it was more like in the typical Wall Street type way, we've selected managers that we felt really good for specific reasons and we deployed capital to them. And it ended up being that I actually knew some of those managers because I was, you know, connected to them through business school. Right. And so, you know, I started getting that excitement about, you know, the technology sector and deploying capital in that sector and all that. It started just kind of coming back to me. I guess everything was sort of coming full circle. And then this family office, the guy that runs it. He has a tremendous penchant for investing in early stage technology companies. And so it was it was a big part of the reason that I wanted to be there. I wanted to. I wanted to sort of start, you know, getting my finger on flow and getting in front of a lot of young upstart companies and sharpen that skill set again. And so, yeah, the answer to your question is, I think I'd like to set up my own fund focused on early stage technology companies within the fintech space, specifically given my experience and exposure there. And also, I actually do have a passion for, you know, perhaps doing good for humanity and society. And so I would like to bifurcate the focus one half on fintech and the other half on biotech, specifically within a certain disease category. So that's what I'd like to do.
Patrick (CEO of WSO): [01:07:21] That's awesome, man. Well, it sounds like you have an exciting path ahead of you, even though you've already been through a lot.
MentorX: [01:07:28] Hopefully, hopefully, it'll be another exciting and successful chapter
Patrick (CEO of WSO): [01:07:32] We'll have to have you back on. Yeah, and in a couple of years where you're at, but. And really, thank you for taking the time. Anything else you want to share with the listeners before we call it anything you'd like, look back at your younger self and be like, What are you doing? Don't do that.
MentorX: [01:07:48] The only thing I saw, I would say, and the only thing is forget money. Forget, you know, the prestige of a brand name firm. Forget all of these things. At the end of the day, we're all given a certain allotment of time in this world. None of us knows how much time that'll be. We don't know if it'll be 90 years, 20 years or 40 years. We have no clue. However, we can absolutely know for certain that there's only a certain amount of time. I would say the most important thing that I've come to in my life is to recognize that with that time, you want to use it in the most impactful way, and money doesn't factor when you think of life that way. Sure, you've got to pay your bills, you want to do well, you want to be busy doing things that are productive, et cetera. I'm not saying dismiss it completely. But what I am saying is think real, long and hard about what you're most passionate about and why, and try to focus your efforts on occupying yourself with something that you're extremely passionate about, irrespective of what the financial side of that story is. Because if you do that, not only may you look back on your life and feel that you contributed impactful in some way or other meaningful way or other. But you'll have enjoyed it every step of the way, and I know that's so stereotypical, but it's it couldn't be more true.
Patrick (CEO of WSO): [01:09:14] Yeah, I think that's absolutely a great thing. It's great advice. I think to many people, especially on so focused on the narrow path and I got to I got to be on that path or it's, you know, and hopefully this series of interviews opens everyone's eyes that there are many different paths to success and success. Looks comes in a lot of different forms, so hopefully that hopefully your story is just another piece of that puzzle that that opens people's eyes. So thank you so much for taking the time.
MentorX: [01:09:42] Not at all, Patrick. Thank you for having me. This was a pleasure,
Patrick (CEO of WSO): [01:09:44] And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis dot com. And till next time.
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