Will AI Be a Game Changer in Wealth Management?

Intro  0:04 

Welcome to The Future Is Borderless podcast with David Nilssen, we feature top entrepreneurs and thought leaders from around the world, those who bring a global mindset and a unique perspective to their life and business. Now, let’s get started with the show.

David Nilssen  0:23 

Hey, David Nilssen here I am the host of this podcast The Future Is Borderless. We launched this as a way for me to connect with business leaders around the world who embrace what I call a borderless mindset and where we can make space to exchange ideas put a spotlight on new innovations and best practices, and things that are relevant to us as business leaders both personally and professionally. And the goal here is ultimately to help us to lead to grow in a world that is continuing to evolve. Now, this episode is brought to you by DOXA Talent. DOXA helps businesses to source full-time highly skilled workers from all over the world. And as a result, as a result, these companies can scale faster increase margin and improve culture to learn more about how DOXA can help you leverage borderless talent, but at doxatalent.com. All right, well, I’m excited for today’s episode. My guest today is Nathan Donohue, who has 15 years of experience in the wealth management industry. And he co-found Consilio Wealth Advisors, which is an independent wealth management firm catering to the unique needs of technology professionals, particularly senior leaders at companies like Amazon, Microsoft Meta and Google. With their expertise, the Consilio team has helped clients navigate the complexities of equity compensation, stock concentration, risk tax issues, and then empowering them to make informed decisions and ultimately achieve their financial objectives. Nathan and his wife have recently relocated from Seattle to beautiful Scottsdale, Arizona, one of my favorite places in the US, where they’re enjoying being outside and the exciting kind of components of that culture and landscape. Nathan is also an active member in the Entrepreneurs Organizations Arizona chapter. And his involvement in the organization allows him to forge meaningful connections with entrepreneurs worldwide and exchange knowledge much like we do here and experiences that enrich both personal and professional issues. And with that, Nathan, welcome to The Future Is Borderless.

Nathan Donohue  2:21 

Thanks, David, excited to be here.

David Nilssen  2:23 

All right, well, let’s just jump straight in. I think first, let’s talk about wealth management, just in general, because I think everybody has sort of their own definition of what that is and what it means. And so before we go into technology, specifically, it’s gonna give sort of a broad brushstroke on what is wealth management, from your perspective?

Nathan Donohue  2:40 

Yeah, absolutely. So from our perspective, wealth management, financial planning is helping families and individuals with just about any facet of their financial life. But really, what we find is that it’s helping them experience some confidence, then an area that they otherwise might not feel like they have a lot of confidence in, like, money is can use it. It’s April right now, filing your taxes is confusing, right? It feels like a game that you can’t win, you’re losing every single year. And so if we can come in and help them understand their taxes, their investments, their retirement, hey, can you put a plan in place to educate your kids one day? On which insurance do you need? What should you be refinancing your house? What debt should you be paying down just about any single topic as it relates to the financial plan and to be able to give them not a product, but guidance? I think that’s a big distinction in our industry is a lot of people assume that what they’re really looking for is guidance. But most of the time, the financial advisor is going to try and fit specific product into that to try and solve the problem. But true financial planning and true wealth management is guidance and helping people to answer and feel confident and make informed decisions about any aspect of their financial world.

David Nilssen  4:00 

Yeah, and it’s not just the investments, but like you said, it’s tax. It’s, I mean, also even estate planning, which I don’t I don’t believe you said a minute ago, but right, it’s all of that sort of how it all works together. Yeah. Why? I’m a big fan in business of the power of focus, right? One of my favorite books a long time ago is I think The One Thing right, you know, and you guys have been very explicit, like, while you help with wealth management, I’m sure that you’ve taken on clients outside of technology, you guys are very clear that you are your specific practice caters to them. Tell us a little bit about the reasoning behind the decision to focus on technology professionals and why you went down that path in the first place.

Nathan Donohue  4:43 

Absolutely. The original impetus for it was just because of by default proximity we started living in Seattle, my business partner and I we just started to accumulate a lot of Microsoft clients led Amazon clients, a lot of medic clients, so and they’ll move around, they might move to Salesforce or Oracle. So we started to get a lot of these books. And I’m also personally kind of a tech nerd. Like, I was like watching tech reviews on YouTube. And it’s just a topic that I find personally interesting. And then I watched a presentation through EO there was an EO member who talked about the riches, there are riches and niches. And he had a b2b company where he served. He said, I wanted to create, I did business to business for general contractors, owners of general contracting companies that are between the ages of 50 and 55, that are in Washington, Oregon, and California and ride motorcycles, like hyper, hyper, hyper-specific, right? I was like, That is fantastic. And he talked about how they went from getting 20, or 30, prospects a month to only six or seven, but others, six or seven, five of them became clients, just because they were hyper-focused, their marketing was very specific. And when those people they were looking for saw, they’re like, this is my guy, these are my people, I’m going to start working with them. And that’s a lot of what we try to emulate. And so when folks go on our website, they don’t see the couple of walking down the beach holding hands or like the couple on a sailboat like they don’t see kind of the cliché, stock imagery that you normally see it says, Hey, we do financial planning for tech professionals with equity compensation. And the goal is like, hey, people, we start to create some empathy there and speak.

David Nilssen  6:30 

I love that I think there’s certainly makes it clear who you’re speaking to. I mean, you go to websites, oftentimes, and you’ll see like, the messaging is kind of confusing, because they’re trying to speak to so many different people about so many different things and the clarity that comes through focus really important. How did you make the jump, like I wrote a book a long time ago called Making The Jump into small business ownership. And my The reason I did that at the time is because a lot of people had thought it had come to me and saying, hey, like, there’s great books on management, great books on HR, but they’re like, what if I’m like, I’m sitting in my corporate job, I’ve got this itch, I want to scratch it, but I’m just not sure what the next steps are. So many people fantasize about starting a business, but very few people do it. So tell me a little bit about how that happened for you, and where you went from, like, being in the wealth management business to saying I want to have my own.

Nathan Donohue  7:21 

Yeah, so we were with a very large, independent broker-dealer for about 12 to 13 of the 15 years of experience. So we just launched Consilio as an independent company, we’re coming up on our two-year anniversary this June. And we had a phenomenal experience with the last insured with the last broker-dealer. But with most large firms, you have walls up, right? They say, okay, these are a process, these are the tools you get to use. These are the way you can run your portfolios. This is the type of guidance, you’re allowed to give your clients this type of guidance, you’re not allowed to give your guidance. And it got to a point where what we wanted to the vision that we had for the company, and that the services and value that we thought we could convey to the clients we couldn’t do inside of the walls of that organization any longer. And so it was like, hey, if we really want to reach the vision and accomplish the vision that we have, we have to be able to be independent and have the freedom of those choices.

David Nilssen  8:21 

Yeah. By the way, speaking of freedom, when I was on your website, you guys have a message on there that says you’ve worked too hard to let your money steal your freedom. Yeah. Tell me a little bit about that. What does that mean?

Nathan Donohue  8:35 

Yeah, I think to say it another way we really try to help clients live their life and spend their money. thing a lot of times you work with your financial advisor, and they say, oh, you need to save, save, save, save, save. Most of the folks we work with, they’re great savers. We’re not people like we have to twist their arm to max out their 401 K or do the right things. But they also come from it from a certain place of fear, like, oh, am I going to have enough? Is this going to be enough? Most of the clients that we have are first-generation wealthy too, like they don’t typically come from money. Like they worked really hard. They got a good education, they got a good job, they saved a lot of money. They just did things right. And our job is in a lot of ways, we don’t want them to feel like money is this handcuff where they’re confined and they have to accumulate it just to accumulate it. If you’re on pace to be financially independent, one day, if you’re on pace to give your kids a college education, spend the rest. You know, like life is about accumulating memories, not dollars. And I’m pretty confident when you’re 85 years old, looking back, you won’t care how much is in your investment account. You’ll care about the memories you had with the people that you’ve spent life with. A story I like to tell is my partner was working with the client. And for years they had this vision taking their entire family on vacation, like, parents, kids, siblings, these, I want to take my entire family on a vacation for a week or two to go somewhere. And we ran his bike, but I’m nervous. I don’t want to spend the money ever so fiscally conservative, like, that’s a lot of money. But I want to create this memory, ran the plan multiple different ways. And so not only can you do it safely, but I want you to buy everybody a first-class ticket, like go to your entire family, I’m not only taking on vacation, you’re all flying first class, and we’re going to have a tremendous once in a lifetime experience. And that’s really what it should all be about.

David Nilssen  10:36 

I love it. I am 100% Confident. I’ve never heard a wealth management professional say life is about cute accumulating memories versus cash. I think that’s an awesome way to sort of frame it. Is there a place? I mean, as you’re working with, you know, executives, entrepreneurs or your client, are there places that you see people consistently do not pay enough attention to?

Nathan Donohue  11:02 

It’s really good question. I think if there’s one area where most folks probably don’t, not that they don’t pay enough attention, but maybe they don’t understand closely enough, and that they don’t understand how much they are in control of is their taxes. Like the tax code is such an intricate and complicated game, we like to call it a game that and you can control a lot of the levers that you push, and you pull and how that creates outcomes for you and your family as it relates to your finances. But there’s very little I can do to control the markets, like a lot of advisors, and a lot of people think what’s going to happen in the market over the next six months. And unless you’re really concentrated or taking crazy risks, in the grand scheme, it actually doesn’t matter. But if you’re really specific on how you control your taxes, and the decisions you make around tax planning, you can actually have very specific outcomes that you can control. Whereas with your investment portfolio, you have actually very little control for the most part.

David Nilssen  12:14 

Give me a working example of how you would because you guys are not obviously a tax firm. Right? So how do you work with your client then? And maybe there are other advisors to make sure that you guys are guiding but not advising in some of those areas? Or maybe you do.

Nathan Donohue  12:32 

So guiding but not advising expand on that?

David Nilssen  12:34 

Well, I guess maybe that should have been a question versus an assumption. Are you actually advising the client on different tax strategies or you believe them and their outside professionals to do it?

Nathan Donohue  12:45 

Yeah, we are both so you’re we always believe in partnering with the outside advisors. So if you have a CPA or your estate planning attorney, you have your property and casualty insurance broker like we want to work with partner with those people and have open lines of communication. I’m not going to file your tax return. But I understand the code enough to be able to identify certain opportunities I understand the code well enough to know okay, Mr. and Mrs. client, if you want to sell X amount of your Amazon stock. Let’s make sure we’re harvesting losses selling is bases positions first or David, that’s you want to make a charitable donation this year to Boys and Girls Club are united way. Don’t write it out of your checkbook. Let’s take your really low bases, Microsoft stock and Let’s donate some shares instead. Because it has a greater tech tax impact for you. And they don’t have to worry about the tax implications of selling that stock. So we’re not going to file your return for you. But as it relates to how your taxes affect your investments in your financial plan. Absolutely. Part of the game.

David Nilssen  13:46 

Love it. Okay, cool. So really more strategic versus transactional in that regard? 100%. Yeah, great. Tell me a little bit about how you sort of want to talk a little bit more about the business versus the advisory at the moment. So tell me a little bit about the strategies that you guys employ to mentor and develop your team to assure I guess that the Consilio services extend beyond just you and your co-founder?

Nathan Donohue  14:13 

Yeah. It’s a great question. So one of the things that we’ve observed is that especially in financial services, the founder advisor, in many cases gets to become the bottleneck for future growth, like firms will hit these thresholds or these plateaus, about 100 million under management 250 500. They just can’t seem to grow past and in most cases, it’s the founder advisor that’s getting in the way as insured is for most entrepreneurs and other businesses, right? Yeah. So when we started Consilio, we set out to have a philosophy that the firm had to be bigger than us. It had to be bigger than just Chris and I. And that was also one of the big reasons why we didn’t put our names in the title. A lot of times you see Donnie Que Kaminski, wealth partners or wealth associates, right? And studies found that clients don’t care if your name is in the title, but your team actually really does. Because it creates this perceived barrier to partnership, or a perceived barrier to professional growth inside of a professional services firm. If my name is not in the title, there’s this ceiling that I can’t grow past for the team. And we’re like, Well, if the team feels that way, they’re gonna, they’re gonna, they’re gonna feel like they can only grow so far right, like efficient side of its fish tank can only grow as big as the tank, and they’re gonna feel like the tank is a little bit smaller. So even starting with how we named the company. We also believe that our team or financial advisors should be educators, not salespeople, like I said, our goal is just to help educate our clients. So we install very significant education bonuses for all of our team members. 75% of our team members are certified financial planners, just one of the top designations you can get most of the team have other designations as well, this year, we’ll be adding to CFA’s, we’ve got three or four, RICPs, I could just go down the list. And so our philosophy was, hey, I don’t want to pay the team for rather than paying team members commissions for selling a product, why don’t like to pay them to become more educated and become a better educator. And so we if they take classes or do designations, we’ll cover it not only that you get into CFP, you’ll get a bump in your compensation will pay you bonuses. Because our belief, again is just you can become a better, more educated, become a better educator, provide more value to clients, and to help them make more informed decisions.

David Nilssen  16:44 

I love that approach. In fact, I think it’s the first time that someone’s articulated this, for me in this environment. But I love the idea of giving people control over how fast they can influence both the income and the impact that they have with clients. And you sort of instead of saying, hey, like the longer you sit there, the more I’ll pay you instead saying, hey, the more sort of competency and experience that you accumulate in a period of time, the more value you’ll drive for us and our clients. Right. So I think I’d love that. I think that’s awesome.

Nathan Donohue  17:15 

And how great does it feel when you can come to work in a place that’s supporting you and learning and growing? Right. And so one of our core values is we have a thirst for learning. And we just want people to learn every single day, every Friday is a learning day. So every single Friday, we have a monthly learning or we have a learning event every Friday morning, sometimes we’ll have an external speakers come in sometimes we have an internal member of the team come in and speak every single Friday, we’re learning something we’re growing.

David Nilssen  17:42 

Love it. I think it’s awesome. Let’s talk about you personally, for just a second. You know, as we were starting to be ready for this show, you mentioned that you participate in annual fitness challenge. And that it’s influenced your personal growth, I’d love to hear a little bit more about that experience.

Nathan Donohue  17:59 

Yeah, it started a couple years ago, a number of years ago now where the guy for a long time had written out the goals that I have for the year, right, here’s my professional goals and personal goals was that a fitness category as well. And so a number of years ago was I’m going to run a half marathon. And then the year after that was let’s run one every quarter. And then the year after that, it’s like let’s run a full marathon. I don’t recommend, and then it was let’s do the 75 hard program. And then it was, well, I’ve never really written a road bike before. So let’s sign up for a 200-mile road bike race, Seattle to Portland, 206 miles in one day, this year, it’s to run a half marathon every single month. And so it’s fitness and staying in shape and just being healthy is really important to me. But what it’s really evolved to, is to every single year to teach myself that I’m capable of doing something I’ve never done before. And to get comfortable being uncomfortable with that, like last year, I’d never really spent much time on a road bike, but I’m gonna go ride 206 miles in a single day this year. And what that translates to is if I can do that, why can’t I go and grow my business from here from point A to point B? Why can’t I go and get the scary prospect or why can’t I help my team get from here this level to that level? And so every single year it’s as much as it is physical. It’s 100% more of a mental game at this point.

David Nilssen  19:28 

Yeah, well, it’s sort of a similar discipline to building a business right? You set a goal you come up with a plan to help you do that. Now you said 206 is are you driving from or sorry, riding from Seattle to Portland?

Nathan Donohue  19:40 

Get out? Yeah, that was the Seattle Portland ride is 200 think it’s 206 miles in one day. You can break it up into two as well, but we liked it. I like to be hard on myself.

David Nilssen  19:50 

You’re a glutton for punishment. I’ve done the SDP twice, but I’ve done it both times in two days. Yeah.

Nathan Donohue  19:56 

Well, let me know if you want to do it again. I’m done.

David Nilssen  20:00 

Okay, I’ll let you know. I want to talk about work-life balance for a second too, because, uh, you know, I interview a lot of entrepreneurs and as you know, a business can take over your life if you’re not careful, so how do you maintain a healthy work-life balance? And how do you sort of, you know, balance the demands between being an entrepreneur, being an advisor, being a spouse, giving back to your community trying to invest in your fitness? Like, how do you think about that?

Nathan Donohue  20:30 

I’m very structured throughout the day, like, every, I have to get up at a certain time, I have to work out first thing in the morning, then you go to work. And then there’s also just certain days that are family time, right, like, tonight’s Thursday, tonight’s date night. And so for me, in my mind, I just have this time is dedicated for certain tasks for certain purposes. So you’ve got workout time, you’ve got work time, you’ve got family time. And that’s tends to be how we do it. I don’t probably much like you, and much like a lot of your guests on here, I genuinely like to work, right, like coming to work. And building something like you’re building a company or building towards a vision doesn’t always feel like work. So if there’s some stuff to get done on a Saturday or Sunday, I’m totally fine doing that. And so because you’re working towards a vision rather than working. So that’s tends to be how we do it. But my wife and I also we love, so we’d love to travel. So I’m perfectly fine sprinting for a number of weeks. I know you’re a big traveler, too. If that means I get to go and take four or five days and go to Mexico or go to wherever, like that’s one of our things that we’re really, really passionate about is getting out and exploring the world. So I got no problem sprinting for a period of time, and then decompressing.

David Nilssen  21:47 

Yeah, yeah. How are you able to disconnect when you travel, you’re able to turn it off for a period of time.

Nathan Donohue  21:53 

It takes me two to three days.

David Nilssen  21:55 

Yeah, I’ve found that too. There’s this cooling-off period. And then unfortunately, a couple of days before I go home, my brain starts to turn back on in anticipation of so that the time we got to be long enough in between to take advantage.

Nathan Donohue  22:06 

Yeah, yeah. Take takes a couple days to decompress. And then yeah, you’re 100%, right, a couple days before and you’re like, alright, what are those? What’s the calendar look like? How do I got to get prepared and get ready to rock and roll?

David Nilssen  22:17 

Yeah. One thing I love to always reflect on is what are the things that have happened to me in my life that have really set me up for success are taught me important lessons that have helped me as an entrepreneur. I’m curious in that, like within that sort of context, what comes to mind for you like what is something that you’ve done experienced been challenged by that is really sort of helped you where you are today.

Nathan Donohue  22:46 

My experience through EO has been a total game changer. I imagine similar for you as well. But I remember when I started an accelerator, so an accelerator, it’s when you only have your between 250,000 to a million dollars of revenue. And all I’ve known before that was the broker-dealer that we were with and kind of their processes and their philosophies. And I go and join this group of people who are, their businesses are just getting off the ground and getting started. And I remember going into what was called an accountability group meeting every single month, these are some of the scrappiest like most innovative, creative problem solvers I’ve ever met. Because if your business only has 250,000 to a million dollars, you only have so much resources to solve big problems, right. And so they were really, really creative. And I remember at the time thinking, I never would have even thought about that, let alone come up with the solution that they did. So I share that story because I think it just opened my eyes to entrepreneurship and how you can get really creative and solve these problems. And now being an EO and having the opportunity now to travel internationally and meet business owners from all over the world, to see how other people solve unique problems and get creative about how they run their organizations and how they run their teams and how it affects them to grow personally has just completely opened my eyes to what’s possible.

David Nilssen  24:15 

Yeah, I love There’s a book out there called the Theory of Constraints, right? It’s the idea that with those constraints, it increases creativity. And so it just exactly underscores what you just said a minute ago. And I think as businesses get bigger, it’s important just to remember, like, unlimited resources doesn’t increase efficiency and or creativity over time. It’s something to consider the oh, I mean, if you look at the Financial Services landscape in general, it’s something that’s rapidly evolving, both because of technology and just because how the world is today, but how do you anticipate that it’s going to continue to evolve over the next call it three to five years and what’s, Consilio is planning to sort of adapt within that.

Nathan Donohue  24:58 

Yeah, over the next three to five years, we will continue over the last several years, we’ve continued to see mass consolidation of smaller firms. So you’ve seen a lot of previously independent, smaller shops get merged or become acquired. There’s a huge consolidation effort right now, which helps improve efficiency and the services you can provide your clients. So I think we’ll continue to see that I personally believe that this development with AI is going to completely transform our game, and the services that we provide. So over the last, like 10 years, trading and investment management has very much been automated. You can open up accounts at E-trade fidelity, Charles Schwab, you can trade for free, you can rebalance for free, like all this stuff that you excuse me, you previously had to pay a lot of money to an advisor for is now there’s no cost associated with that. And I think over the next few years, we’re going to start to see a lot of AI-driven platforms to help advisors and to help clients get that advice in real time. And it’s going to just totally propel the value that you can provide for clients, I’m really excited to see how that happens. I also believe that if advisors don’t pick a very specific niche, if they don’t specialize, if they’re not able to provide tremendous value in a very specific way, they are going to be in trouble five to 10 years from now, because what we’ve observed over the last decade of how trading gets automated AI will start to automate a lot of the very generic financial planning that people are doing. And so if but though, for those that get hyper-specific and get very niche focused, maybe it’s around taxes or estate planning, or say, hey, I want to go and I’m just going to serve doctors in California, right? If you can solve their specific problems and add tremendous amounts of value, you’ll be able to leap ahead of somebody who’s maybe a jack of all trades.

David Nilssen  27:07 

I love the fact there’s some people that you run into that have a scarcity mindset, and then others that have an abundance. And what you just sort of laid out is that it’s actually within the wealth management professionals control to either leverage AI as an enabler, or it could be actually to their detriment, I think it’s really smart to recognize that it’s, it could become your superpower or your kryptonite, but it’s 100% control.

Nathan Donohue  27:31 

I think it’s going to completely transform the industry. And I don’t know about you, but I always operate from a certain with a healthy amount of fear every, every day I get up on like, somebody’s going to learn more become a little bit better this tool could put if I don’t embrace it, and grow as a result with it, which it’s going to put a ton of downward pressure on me. So every single day, I operate from a little bit of healthy fear that way. I also observed some people who are like, oh, it’ll never replace me. You know, this will never take our clients, whoever and I personally don’t like that philosophy. I’d like to say, hey, you need to get better, you need to get sharper, you need to stay ahead of the game every single day, where you could very well get left behind.

David Nilssen  28:12 

Yeah, I think a little bit of paranoia is healthy, keeps us motivated. Nathan, I know we’re getting close to the end of our time together. But I always love sort of ending with a question around, you said thirst for learning is one of your values have found that most entrepreneurs are lifelong learners? What’s a recent book you read or something that you’re trying to learn today to sort of invest in your own skills and development?

Nathan Donohue  28:39 

Yeah. A recent book I read, as it relates to what we do was Die With Zero. And the author’s name is escaping me right now. But it was a phenomenal book around like I talked about earlier, the philosophy of life is about accumulating memories, not dollars. And that was very much the purpose. And the overarching theme of the book is that he laid out, if you accumulate a significant amount of wealth you worked so hard your entire life, and then you leave it all behind to your kids, you don’t actually use anything, then you traded work for dollars, but you didn’t have any memories over that point of your life, right. Yep. And that’s phenomenal book I’d highly recommend. It totally goes against what like we talked about what most financial advisors tell people save, save, save, save, save that you should definitely spend your money.

David Nilssen  29:36 

Awesome. Well, I think we’ll end there. We’ve been talking to Nathan Donohue from Consilio Wealth Advisors. Nathan, where can people go to learn more about the work that you do?

Nathan Donohue  29:44 

Yeah, I think go to our website consiliowealth.com, you can contact us there.

David Nilssen  29:55 

Awesome. And we’ll put that in the show notes too. Thanks again for being on the show today.

Nathan Donohue  29:59 

Thanks, David.

Outro  30:02 

Thank you for listening to The Future Is Borderless podcast with David Nilssen. Be sure to click subscribe to future episodes so you can hear from more top entrepreneurs and thought leaders, and we’ll see you again next time.