Video: Why Greenspring?

The three ways to make a living

Marcus Schafer (00:05)
Jason Zweig from the Wall Street Journal, the Intelligent Investor column. He has this quote that I absolutely love. And it goes, are three ways to make a living. Lie to people who want to be lied to and you’ll get rich. Tell the truth to those who want the truth and you’ll make a living. Tell the truth to those who want to be lied to and you’ll go broke.

I’m Marcus Schafer, Greenspring’s Director of Growth. This is Pat Collins, our CEO, and we’re going to talk a little bit about how that quote resonates with us, why we show up to work every day. So let me read it back one more time. There are three ways to make a living. Lie to people who want to be lied to, and you’ll get rich. Tell the truth to those who want the truth, and you’ll make a living. Tell the truth to those who want to be lied to.

and you’ll go broke. So Pat, I would just love for you to share your reactions when you hear that quote.

Patrick Collins (01:12)
Well, having been in this business for 25 years, think there’s a lot of truth to it. Sadly, there’s a lot of truth to it. I do think that quote probably is true in the short term, but I do believe in the long term, those that are consistently lying or misleading will eventually struggle in this business. But I do think it’s unfortunate that people do tend to prey on emotions and people’s feelings when it comes to investing.

Marcus Schafer (01:43)
Yeah, it’s, you know, those challenges, I think, like, to me, summarize probably why you started Greenspring. So I think what would be helpful today is talk a little bit about why you started Greenspring, why I joined Greenspring, why we’re different than the other options out there for those seeking advice. And most importantly, why it matters, why it matters to our current clients, why it matters to prospective clients.

why it matters to employees, and why it matters to our community at large.

Patrick Collins (02:20)
That’s great. you want to dive into it?

Marcus Schafer (02:23)
Let’s do it. Yeah.

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Greenspring’s Mission – Our goal to help a million people live their ideal life and the progress we’ve made

Patrick Collins (02:25)
Sounds good. Well, maybe I can start off with kind of that why question that you just brought up. I think it’s probably an important one. Really our why, when we think about kind of our big, Jim Collins used the term, BHAG, big, audacious goal. We thought about that years ago. And our BHAG is to help a million people live their ideal life. And so,

you know, when we think about people, we have a lot of different categories there. So clearly it’s our clients. We have our families that we work with. We have our participants inside of retirement plans that we work with, but that’s not it. We think about that cohort. We’re also thinking about our team members. How do we help them live their ideal life? then finally the communities. We have three office locations, all with distinct communities, and we’re really trying to get involved there. I’m sure we’ll talk about that, but we want to help.

people inside the community as well. Maybe even people that never meet us or never have a chance to work with us.

Marcus Schafer (03:26)
Yeah, yeah. mean, there’s so many different ways that you can get to that million people. It’s pretty audacious for a firm that was started 20 years ago. You know, let me read off I have here kind of how far we’ve made progress on that journey so far. So, 1,100 families we work with, about $2 billion in investable assets. Obviously, things like houses aren’t included in that.

in that number, 25 different states are where our clients live, 94 new families so far in 2024. That’s one kind of section, private clients, we have institutional clients, about 175 of those, about 5 billion in assets for them. And then you think about what that means for those institutions, it’s also

their constituents, right? So there’s about 50,000 plan participants. And we’ve actually, it’s really, really cool, we’ll hopefully get a chance to talk about this, about 1500 meetings we’ve done with those plan participants, trying to leverage everything we’ve learned working with ultra high net worth families, and how can we bring that to everybody. $2 million given to charity, and we have about 40 employees. So one of the things I always think about is not the best at math, but I can do simple division, right? That seems like not that many clients relative to employees and that’s something that’s very, very intentional.

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Client Caps – Why we limit the number of clients per advisor to ensure exceptional service

Patrick Collins (05:07)
Yeah, it’s, was something from pretty much day one. We, decided to, make some changes to compare it to maybe the industry. So I came out of a really big brokerage firm, probably one of the most well known. And when I left there, the average advisor had around 400 or so households that they worked with. I just looked at some annual reports recently and found it hasn’t changed much. It’s still in the mid three hundreds, basically.

So for me, one of the things I was really excited about was really kind of being that personal CFO, family CFO to a client. And that was really hard to do when you had 400 households. You figure there’s 250 business days in a year. You’d have to be meeting with almost two clients a day and that didn’t give you any time to prep or follow up or all the other implementation items you need to do for a client. So when we started, we decided to put CAPS in place.

And where we are today, we have somewhere around 65 households or clients working with each advisor, if you kind of do the ratios. So it’s vastly different than three or 400. And I think that’s been important for us. think one, it’s been important for our success. I think it’s been really important for our client success for us to be able to have the time to think strategically on their behalf and then implement.

So clearly there’s a service component of why we do that, which is to really be able to do true comprehensive planning for clients. We felt like we had to have a limited number, but there’s another reason too that I think is maybe less obvious and it’s more from a business perspective, but if you’re a client, it matters and that’s sustainability. When you have advisors that are building up fiefdoms basically, because maybe they’re good at bringing in clients,

that doesn’t bode well for sustainability because advisors eventually retire. And then at that point, what do you do with these huge numbers of clients that you’ve accumulated over the years? For us, when we have these caps, one of the things that it just inherently does is it creates opportunities for new advisors to grow inside the firm. And I think that’s important from a client’s perspective because you want a firm that

when your advisor retires, if that happens during your lifetime, that there is a deep bench behind that. If you don’t have that, then you’re kind of stuck looking for, what do I do? Where do I find another advisor? So I that was really important to us. We really wanna make sure our clients are taken care of throughout their lifetime. And we knew an aspect of that was going to be having a deep bench of people that could kind of fill, know, next man up kind of mentality that we’re gonna be just as good.

as their advisor maybe that they have worked with for 20 years.

Marcus Schafer (07:56)
Yeah, mean, to me, you kind of brought out two points. It’s if you think on a daily basis how unsustainable two client meetings is with all the additional other work that comes with it. That’s also assuming that markets are predictable, right? What’s going to happen today is the same as yesterday. But what we know in markets is they’re incredibly volatile in the short term and you can’t really predict it. So it’s like,

If you look back at COVID in 2020, markets are dropping 30 to 50 % in span of a month. How quickly can you go talk to 400 different people and think strategically around, going forwards, what does today’s market mean for somebody and their unique situation? Again, I’m not that great at math, but it seems pretty impossible to do that. So I just think it’s…

If you want service, it’s gonna, you know, have to go where you’re gonna get that.

Patrick Collins (09:05)
It’s really true. There’s a couple other points I guess I’d put on that, which is one, when you don’t have caps and you have hundreds of clients that you work with, really the model turns more into ideas. You’re sharing ideas with clients. I have an idea on what we could buy or what we could sell or how we can maybe try to improve the portfolio. I could call 25 clients a day if I just had an idea.

that I want to share or implement or kind of a new stock or new investment that I think we should consider. When you start getting into true financial planning, get deep into tax projections, estate planning, reviewing insurance, reviewing cash flow. They’re also integrated and you need to spend time in each area. that’s where that model falls short. Now, where our model falls short, just to be fair and be hopefully two-sided here, is

you really do limit the number of clients and the types of clients you can work with. mean, that’s not to get into, but simple math, if you had a hundred clients, for example, let’s just say that was near our cap and they each paid you $500 a year, you would basically go out of business at some point. You need to support your firm and a team on that. So what our model really supports and it probably kind of is in line with the client needs, it’s complexity.

the larger the client is from an asset net worth standpoint, the more complexity they have. own businesses, they own different types of assets, they have insurance coverages that are unique, they have very integrated or unique estate plans that we have to consider. They have tax, you all sorts of different assets with different tax ramifications. So typically for us, the higher net worth clients are more attracted to our model.

because of the complexity that they have. And that’s how we built it.

Marcus Schafer (11:04)
Yeah. And it doesn’t preclude us from giving advice to other demographics, right? We do that all the time. Somebody calls in, hey, my friend has a challenge. Can you help them? Of course we can help them. It probably, our fee might not make sense to help them on an ongoing basis, but our phone is here. You know, we’re happy to jump on the phone and talk with anybody around. Here are some ideas that can actually help your situation.

you know, the word idea, to me, I read that as product, right? And it’s like, product is not advice. So if somebody calls you and they say, hey, I have this great product, the chances that that product is specifically designed for you and your benefits, it’s very, very low. Products bring economies of scale, products being great things. But that kind of mentality, I think, jumps into three of the other key things that we think are

differentiators for Greenspring. Fiduciary, fee only, and independence. And product is kind of the opposite of some of those keywords. So maybe I’d love for you to talk a little bit about what fiduciary means and why that’s important.

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Fiduciary Duty – The importance of always acting in our clients’ best interest and why it is crazy most of the industry doesn’t agree with us

Patrick Collins (12:24)
Yeah. I think it’s the essence essentially of what we’re doing here at Greenspring. I look at it as putting others needs ahead of your own. That’s really what it comes down to. I’m sure there’s legal terms and standards and things like that, but at least from my simple mindset, it’s I want to make sure in every interaction that I’m putting the clients or my teammate or just the person I’m talking to. How do I put their needs ahead of my own?

And I think for me, obviously there’s first a mindset, but then there’s also structure that you wanna put in place to make sure that you’re not setting the game up against your original intent, which is to be a fiduciary to your clients. I have a quick story on that. think it’s kind of interesting. When I started the firm 20 years ago, I was coming out of a model that I was not a fiduciary. So I saw all the problems that could happen there.

There’s this story that I had read and I just kind of, thought it was a great analogy for what we were doing. So there was an explorer back in the 1500s by the name of Cortes who came from Spain and he came to Mexico basically to find gold and explore and hopefully have riches. And he had a couple hundred men and the first thing he did when he landed on the shores is he burned the ships.

And it was a very specific thing he was wanting to do, which was he knew it was gonna be hard. He knew that, you know, there was gonna, some of them were gonna die and there was gonna be disease and there were enemies and all sorts of things. So they would wanna go back when times got hard. He knew that. So he said, the first thing I’m gonna do is I’m gonna burn the ships and we’re either gonna be successful or we’re gonna die. And that might be a little dramatic for us, but that was kind of the mindset I had when I left my previous firm. There’s an actual license that you hold.

to be able to sell those products that you’re talking about. And when you sell those products, you typically got large commissions. So I knew when I started the firm, it was gonna be hard. I was 27, it was just me in a single office. I didn’t know if any clients would wanna work with me or not. really wasn’t sure. But I didn’t wanna go back to what I came from, which was this model of lots of clients selling them products, kind of earning a commission and moving to the next person.

So I just decided to kind of burn the ships there. And I said, I’m going to drop that license that allows me to accept any commissions. And it’s one of those things where this is either going to be successful being a fiduciary or we’re just not going to succeed. But I don’t want the option when things go hard to go backwards and sell commissions. you know, I’m happy to say every single person that’s joined Gridspring since has done the exact same thing.

And we haven’t gone backwards. Since day one, all of our revenue has come from our clients. We have not accepted any commissions. And I think that’s important distinction when you’re thinking about this term of fiduciary. How is your advisor compensated? Is it component?

Marcus Schafer (15:26)
Yeah. And you know, the definition fiduciary, since you’re dropping history knowledge on us, fiducia, that’s Latin for trusted. And so, you know, people ask me, Hey, what do you do? And I’m trying to tell them we give advice in a fiduciary capacity. What’s that mean? It’s naturally the question. And you kind of describe exactly what you described. And the feedback I hear is like, wait, isn’t that what everybody does?

But what’s wild is I was looking at the stats. Less than 12 % of the financial advisors out there kind of fit this category we’re talking about fiduciary fee only advisors. And I think it’s really shocking sometimes to people as they think about like, wait a moment, how can somebody be giving the advice and not always reacting with my best interest in mind from a legal standpoint?

Patrick Collins (16:23)
It’s astonishing that this has not been codified into some sort of law, but the industry has tried to do that over the years to varying degrees of success. And sometimes it’s through disclosure, which I’m not a huge fan of, because I’m not sure clients read a 30 page document when you say, sometimes I’m a fiduciary, sometimes I’m not. I have to disclose that to you. We’ve just taken the approach of it’s the right thing to do. We’re going to do it at all times. And so clients don’t ever have

worry about, you know, is Green Spring working in my best interest right now?

Marcus Schafer (16:59)
Yeah, and so your advice may be if somebody’s looking and they’re saying, hey, is my advisor a fiduciary? Do they get paid in other ways? To me, it’s people like us, we probably scream it aloud where people get a little sick of hearing it, but are there other ways that somebody can go and look and figure out exactly how their advisor’s paid?

Patrick Collins (17:24)
Yeah, I mean, probably the biggest thing is to just check their licenses. You can go on broker check. If you go into Google, you type that in, type your advisor in. If you see that they have a Series 7 license, that they work for a broker dealer, most likely they are getting paid either through the products they sell you or platform fees, or there’s all sorts of different ways that firms are kind of angling to make money in this business that are very hidden from the client. again,

I think if you’re looking for a firm like Greenspring, the best way to find us is probably through organizations like NAPFA, National Association of Personal Financial Advisors. You can go online there. You can find firms that have basically agreed we’re not gonna accept commissions and we will agree to be a fiduciary at all times to clients. We’re not gonna wear the hat only some of the time and maybe not act in their best interest others. So I think it’s probably a.

A pretty good resource for people at napfa.org is a website they should go to and to take a look at.

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Fee Only – Why we are a fee-only firm and the risks of commission-based compensation

Marcus Schafer (18:26)
Yeah, that’s great. And then, you one of the things you kind of mentioned there is the intertwined nature of fiduciary and how you’re paid, right? So like, when I think of commissions, I just think of, I struggle to think of an industry that I view the other side as super trustworthy. And it’s not to say you can’t find people in an industry that are trustworthy from that model of which you can.

met them, the challenge is that it’s really really hard when you think about real estate agents. In the back of your mind you’re always wondering, hey am I getting, is this person really representing me? If they get paid more, the higher the cost, I buy a house for. That seems like a little backward at least in my mentality. So what’s the interplay between the way you get paid and the type of advice you get?

Patrick Collins (19:26)
So I think probably the interplay would be, when you think about a client that comes to an advisor, they often have questions. Am I going to be OK to retire? Are my investments set up correctly? Am I as tax efficient as I should be? How do I send my kids to college? All those different types of things. So as advisors, we’re basically gathering all this information and then making recommendations to clients. Here’s what I think you should do. You should

this investment product or you should set up this type of tax strategy. From a client’s perspective, like you said, you would think that the advice I’m getting is in my best interest. So I think the main thing is, you know, is the advisor getting compensated to recommend one product over another, getting more compensation to recommend one product over another? And I think if the answer is yes,

And that’s where conflicts of interest really arise, you know, in those types of engagements, because obviously you can kind of do the math. If, an advisor makes three times as much to recommend product A over product B, you have to be somewhat skeptical of whether the advice you’re getting is actually the product. A really is the right thing. If that’s what they’re recommending. Unfortunately, it’s really difficult to figure this stuff out as a client or a prospective client when you talk to someone, because it’s not always disclosed to you.

So I do think those types of decisions and recommendations that advisors are making, they can be clouded by the compensation that they make. I don’t like you said, I think there are really, really good advisors that sell products for a commission. And I think there also can be maybe not great so advisors that don’t sell products for a commission. So it’s not the only thing that you should be thinking of.

But I do think it’s, know, knowing where incentives lie is important for any kind of transaction that you’re doing with anybody, not just in financial arena. So I just think that’s an important thing to consider is what’s the incentives here for the person that’s making this recommendation.

Marcus Schafer (21:31)
Yeah, and if you look at some of the research around behavioral biases, it’s almost like some of this stuff is primed. mean, these are really, really smart companies that obviously charge fees in a certain way because it business, it makes sense sometimes for them in order to increase their shareholder value, which is a little bit, I mean, unique to us. You talk about our mission is to help a million people. You don’t say a million clients. in it, right? We don’t say, hey, we only want to help our clients. We do a bunch of different things out there in the community to try and bring advice and awareness and financial literacy. And one of the big reasons why we can do that is because we are independent or employee-owned. Talk a little bit about what independence means for a fiduciary advisor.

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Independent, Yet Unified – How being 100% employee-owned allows us to prioritize client success over corporate profits while maintaining a unified approach that ensures consistent, high-quality advice

Patrick Collins (22:28)
Well, I think it’s important. I want to go back to maybe I’m going to compare this independence, these firms that are independent with maybe the general broad industry, the big firms, the big banks and whatnot. So some of this is independence related and others are maybe it’s a little bit different. But one of the things that I found moving from that side over to what we have here at Greenspring,

is first and foremost, just a mindset. If you go to a meeting, an internal meeting at a big firm, most of the time the discussion is around, they call it production or revenue or how much fees are you generating from your clients? And that makes sense. That’s kind of what they’re trying to build is obviously much larger revenue base and whatnot. But I think if you come to a firm like Greenspring and there’s others like us and you were to go to a meeting, the meetings are all about

clients, let’s talk about the strategy that we’re implementing for a client or what’s the best way that you would approach this scenario with a client. It’s very much solutions and advice driven is what you really see is just heavy on how are we making an impact in people’s lives. And I think that’s really what drives a lot of people to our side of the business. It’s usually not compensation. you really were

wanted to make as much money as you can, you would go to a place where you can earn commissions because you make a lot of money in a very short amount of time. You make all your money up front. So I think that’s one thing that I would say independent firms, big banks, there’s just a mindset difference on how they approach clients. The second one, and this is going to sound a little bit funny, is that all of us, think, are independent. Everybody, I’ve been on both sides of the business. I’ve seen people that are very independent on the brokerage side, and I’ve seen people that are very independent on this independent side.

I actually think in some ways that could hurt clients in general. So when you think about if you had 30 advisors in an office and they all are very independent minded and they said, I’m working with my clients the way I want to work with them. Well, that works for a period of time. But when you have two, three, 400 clients and you’re going to do this independent custom strategy for every client, what happens after a while is it gets so

difficult to oversee that because you have thousands and thousands of positions that you’re managing. have thousands of different strategies that you’re thinking about. And ultimately what happens is, is nobody really works. You it doesn’t really work out. And, and then you do that across an entire office and everybody’s got their own kind of opinion on how they’re going to work with their clients. Where firms like Greenspring are a little bit different is we’re really building a unified firm. So if you were to ask a client of, you know, one of our advisors,

and then another client of a client in a different office, tell me a little bit about your experience working with Greenspring. You would hear very similar stories. would hear they have the same investment portfolio per se. Now, they may have different allocations. So one might risk averse and one might be risky or one might have different stage of life. But if you look at the holdings that they have, they would be very similar. When you ask them about financial plans, like they would all have a financial plan that they would be kind

pointing back to whether they’re on track to and what strategies they’re implementing. So it’s a little bit different. while we all are very independent minded, we’ve also recognized for the benefits of the client, for the benefit of the client, we have to have some unified strategy so that we can bring the resources of the firm to each of these clients and not be kind of so scattershot that it’s so custom that nobody really gets.

great service because there’s no kind of underlying resources to be able to support.

Marcus Schafer (26:18)
Yeah, and it’s about what do you think is best? if you have a hundred different portfolios, which one is best, right? And I imagine if I’m a client sitting on there, it’s like, hey, I came to you for advice and I don’t understand why the advice I’m getting is different than the advice somebody else is getting, right? And I think that’s something that people have to be willing to do is say, hey, I want to go to an advisor.

coach, I want your opinion on what’s best and that opinion should be singular. But the fact is a lot of clients come with existing situations and you got to figure out the right way to transition this. there’s just so much. So I love that kind of framework of how to think about independence, how we think about independence. You know, one of the things I hear from

prospective clients is when you hear a bigger name firm, there’s a perception that they have more services and there’s this easy use, right? Like why do we shop at Amazon? Oftentimes it’s not because you get the best deal, it’s because it’s very easy. So just moving to a more independent, a smaller, a more boutique firm, does that limit the services and how do we try to

make sure we’re bringing relevance to every conversation with the client.

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Breadth of Services – How we, as a boutique firm, can leverage our independence to offer a similar range of services as household names

Patrick Collins (27:49)
Yeah, it’s a great question. think there probably was maybe more truth to that 20 years ago. I think that’s changed a lot with technology, some of the platforms and whatnot that are available to independent advisors. But I always got to chuckle when I would talk to an advisor and they would say, well, you can’t offer this. We have this on our platform at, you know, name the firm. And I always joked and I said, why wouldn’t that be available to us?

They said, well, it’s only available to clients of pick your firm, Goldman Sachs, Merrill Lynch, Morgan Stanley, wherever it is. And I said, if I thought it was a really good option for my client, I would just open an account and buy it through you guys. Would you not take their money? And they always say, no, we would take it. So that’s the beauty of independence is we are not stuck on a platform. Those platforms typically are what’s available to clients is

products and firms that have agreed to pay the firm that has the platform usually. So it is the one, one nice thing we saw this a lot early on, there were, there were investments that I really thought were great investments when I worked at this big company, but they didn’t have selling agreements with the firm that I worked at because they wouldn’t share revenue with them. And so we were just weren’t allowed to buy it. So I always kind of chuckled that the options are less. actually think they’re way more.

at an independent firm because we’re not limited to what the firm says we can buy or buy for our clients. So there’s that element. think what you’ve started to see over the last 10 years or so is the technology has vastly improved on the independent side. things like investment reporting, estate and tax planning tools. In fact, there’s stuff that we’re using that just I’ve never seen a big firm use.

for probably a number of reasons. So I think there’s that. And then there’s kind of the, maybe some of the ancillary things that you would expect out of a big bank like lending services. And even that has now really opened up quite a bit. I think my guess is that as more clients and advisors have been attracted to this independence model, there’s more assets.

big firms realize we want to tap into that. So they start offering more from lending, insurance, all the different areas. So I really have not come across a scenario where there’s something we can’t handle as a firm that could be handled at a big firm. I’m sure there are some, but for the most part, we really haven’t seen that. And I guess the last thing I would say is firms like Greenspring, we don’t hold clients’ assets directly.

So I think that’s one of the things obviously you should be looking at if you’re a client is where my assets held. Well, because we’re not brokers, because we’re not the custodian of the assets, we need to find firms that can do that. for example, Greenspring uses Fidelity and Charles Schwab. And if you were to look at those institutions, they’re as big as any that you’re going to invest in basically. So, you know, we have maybe a different, slightly different relationship with them being an institutional client of theirs, but

I think that’s important from a client’s perspective is understanding you’re at a firm that has every resource available from the standpoint of back office support and whatnot. So I don’t think this has become, this has become less of a less of an issue probably over the last 20 years, I guess.

Marcus Schafer (31:20)
Yes, I mean to your point, this is what’s great about capital markets. Innovation is connected with opportunity, right? And if we go back to some of those opening stats, over a thousand families, A lot of wealth tied to those. There’s many other counterparties that we can work with that can offer great solutions and are really excited about the opportunity to help people in a way where…

You know, they’re a business like anybody else. have client acquisition costs. And if you can kind of use the power of your client base to negotiate preferred pricing to bring services, that’s an incredible opportunity. You one last thing on independence is also this ownership mentality, right? And it’s, hey, I’m an owner. And what that means for an employee working on behalf of making a

a firm veteran representing our clients. Can you share a little bit about how Greenspring is trying to encourage the ownership mentality across our firm?

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Fostering an Ownership Mentality – How opportunities for ownership drives excellence and accountability within all levels of Greenspring

Patrick Collins (32:30)
Yeah, it’s, maybe I’ll start with a little story here, because I think it relates. I have two boys, both are, one’s 19, one’s 17. When my oldest boy turned 16 or 17, he ended up getting his first car. But prior to that, obviously, we were driving him around everywhere to his sports practices, to visit his friends. And when he got in the car,

It was inevitable that whatever he was doing, if it was sports, he took his cleats off, there was mud everywhere. If he was coming from school, there were papers in the backseat. He just always left in a mess. Fast forward, he got his first car and the first time I got in the car with him, I think I had a drink and he looked at me and he what are you doing with that? And I’m I’m straight. He’s like, well, make sure you don’t make any mess.

you know, if you left anything in the car, he would get upset about it. And so it’s this mentality of when you own something, you treat it a lot different than when you’re kind of renting it or when you’re just, it’s not yours. And I saw that right from the early stages of Greenspring when our first partners came on board. I just saw how they acted a little bit differently than our, you know, just our traditional team members. And I think part of it was they owned it. It was an asset of theirs. They wanted to make sure that it was, they took care of it.

So, you I just saw this, you know, higher degree of care from owners. And so I thought, well, why, why are we only limiting this to just a few people? This is an important concept, especially for clients. You know, when a client is talking to someone and they know they own a piece of Greenspring, like they’re just going to treat it a little bit differently. They’re going to care a lot more about it. And so not only do we have, you know, are we, are we multi-partner? We also have

what we call green units. And so after two years, every employee here are granted green units, which is basically equity in the growth of the firm. And we’re big believers that again, when you own it, you treat it differently. And that’s kind of what we’re trying to do and build is kind of this ownership mentality. We think it’s better for clients because I think the clients are going to get a higher degree of care from, not just the advisors.

But we’re talking about back office, we’re talking about investment research, we’re talking about our financial planners, even people that are handling bookkeeping and accounting. Everybody has the ability to be an owner here and that was really important to us.

Marcus Schafer (34:59)
Yeah, and you know, the ownership tying into independence that enables a lot of the other things that we do just because we think it’s important to be good stewards of the community, right? We’ve given, I think this year we’re going to give an aggregate $2 million to charity and that’s something like 5 % of our profits every single year that we’re kicking back into the community. And one of the only

ways we can do that is because there’s no outside shareholder saying, hey, I’d like 5 % more money, right? It’s everybody coming together thinking about what’s best for our community.

Patrick Collins (35:44)
Yeah, ownership does matter. I think it’s something I almost never hear from a client, but I think it’s an interesting thing if you are a client of a firm to understand who owns it, who has control, who’s making the decisions here. I came from a big firm that was owned by shareholders. those shareholders had no real tie to the clients of that firm. wanted profits to be delivered every single quarter. And so they’re gonna obviously elect a board

And that board is going to be very much focused on how are we driving profitability. And that might mean we should sell this. These types of products are really profitable. We should sell them to our to our existing client base. So you see that on the big firm side and now even on the small firm side where private equity is entered, you kind of having a similar phenomenon where private equity now owns it. And now they’re looking at, how are we going to deliver for our investors? Private equity typically has a fairly short window, let me less than 10 years.

And so they’re trying to do things to increase returns. I believe as the decision-making gets further and further away from the client, then you have to be careful. firms like Greenspring that are 100 % employee-owned, all the decision-making is done by the owners of the firm that are also the people that are running the business. They’re also the people that are sometimes managing some client relationships. And I think that’s important to have that distinction.

because the decision making is going to be done with the client in mind versus only profits in mind, which tends to happen as you get bigger and you’re owned by someone who’s very much focused on the profits.

Marcus Schafer (37:24)
Yeah, it’s a

Ownership mentality means a lot and a lot of our clients have built incredible amounts of wealth because they’re owners of their businesses and they have an ownership mentality. You need that even if you’re just rising through the ranks of corporate America. That stuff truly, truly does matter. Maybe while we’re just talking about values, maybe share a little bit about

brings core values. Because I think this is really, really interesting. And the story about how we started with our core values, where it’s taken us, I think is super, super

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Core Values that Drive the Firm – The 5 guiding principles that shape our culture, decisions, and client experience

Patrick Collins (38:09)
Yeah, someone told us early on, think this is really, really good advice is that, and just to back up, I was almost a little hesitant to go through this exercise of really articulating our core values because I had come from organizations that I thought were so hypocritical. I would read something on the wall about integrity and then I’d see people treating each other terribly. And I think that seems strange. Why do they have a core value of integrity, but they don’t follow it? So I was really hesitant and

that the advice we got was don’t make these aspirational. When you’re developing your core values, make it who you actually are. And they don’t have to be this aspirational thing. They can just be who you are. And then as you’re hiring, as you’re bringing people on, as you’re really trying to enforce things, these are the values that you’re looking for. And so for us, we were really trying to be deliberate about

something that really is these core values about who we actually are as a firm at the time. So, you know, I’ll run through them. Our first core value that I probably is the most important to us is love your neighbor. It’s just basically, it’s really the idea of fiduciary. It’s we want to put others needs ahead of ourselves. That’s, you know, I think where it’s probably no better seen as our charitable or philanthropy. You know, the owners could have easily said, let’s, you know, take this money and, you know, distribute it to each other.

But we want to be focused on the community. We do believe that having this great relationship with the community is important. So love your neighbor. Own your stuff. We want people to take responsibility for their actions. Do what you say you’re going to do with a client. Do what you say you’re going to do with a teammate. That’s really important. Having a bias towards action. We’re relatively speaking, we may look like a big firm in the independent space, but we’re still a small business to a large degree.

And typically people that don’t do well here, we recognize are the people that kind of sit and wait for work. These are people that really want to dig into understanding everything. They’re curious. They want to make sure they do a good job. people that have a bias towards action is really important. Trust the evidence is another one of our core values. We don’t necessarily have people come in here and say, I’ve got this gut feeling that I think this is going to be a good investment, I’ve got a gut feeling that this is somebody we should hire even.

We wanna use data and evidence to support all of our decisions. And then finally, master your craft. We want people that love learning, that are really curious, that when they hear something and not sure why that’s the case, maybe it’s a tax strategy or an investment, we want them to dig in and really understand it well. That’s why we have people that are just, in my book, believe some of the best in the business, people that specialize in certain areas that I don’t think anybody else in the country does. It’s because they have this mentality of master your craft.

Marcus Schafer (40:55)
Yeah, and those things, I mean, it is crazy to me how coming from a bigger corporation, how day in and day out these are. When you walk down our hallway, Boom. There’s the core values. When you log into Teams, boom, there’s the praise wall talking about everybody living core values. When we do our annual holiday party, boom, there’s the awards for

people winning and being like embodying that true core value. So that’s, I think incredible and you know, it’s, if you’re sitting there and you’re looking at, what type of firm do I want to be associated with? It’s all of those things, right? Of course I want to be associated with somebody that’s proactive. course I want somebody that trusts facts as opposed to speculation. So it’s just,

And awesome, think when you actually see it every day, it matters a lot, especially when everybody knows that there’s a lot of these that are kind of in name only. And if you go around to any Greenspring employee, you know, this is probably a challenge. If anybody actually listens and watches this, you can ask any employee. If we don’t get it right, I’ll buy you a coffee. what I’ll say. I don’t think I will, but.

Patrick Collins (42:21)
Thank you.

The there’s over the years, there’s things that have kind of come across their desk. So there’s a couple that come to mind. One is there was a really big firm that came and talked to us at one point and said, you guys realize how much money you’re leaving on the table by not selling insurance products to your clients? You make all these recommendations. You do all of this deep analysis to help these people figure out what types of insurance, how to save money on premiums. And then.

you tell them to go buy it if they need it to go buy it from somebody else. And we said, yeah, but if we were selling it, the problem is, is that it’s going to cloud our judgment then. And that was really important. So, you know, for us, things like that is, you know, it kind of falls into our core values. When you think about that, we have a financial planning team that all they do is meet with participants of our 401k plans. You mentioned it before, they’re going to do over 1500 meetings this year.

one-on-one needs. These are people that could never afford to hire Greenspring. They’re worried about how to get out of debt. They’re worried about, you know, setting a budget, buying their first house a lot of times, things like that. On paper, if you looked at that, you would say, that’s a terrible investment for Greenspring. They’ve hired four people that all they do is serve people that’ll never be able to become clients of theirs. But in fact, it follows our core values. It follows our purpose.

of helping a million people live their ideal lives. So I think, you know, that’s kind of the element we’ve got. It’s always together like ownership. I guess if we had outside owners, they would say, what are we doing? Let’s cut that group. can save a ton of money. But for us, that’s helping us fulfill our core purpose. And it’s helping us live out our core values too. So it’s really important. And I think, you know, it’s the old adage that I think Walt Disney said it, when your values are clear, your decisions are easy. And that’s something.

That’s really, for us, when we’re thinking about making a decision, we’re always going back to the purpose and the values, and that drives a lot of our behavior.

Marcus Schafer (44:23)
Yeah, go back to values and go forwards. And to be fair, anytime we don’t do something in house, we’re helping to vet whoever it is we’re asking to step in there. Right. And I think that’s really important too, because you don’t want to send somebody off to somebody where they’re going to get a bad experience. That experience, even though we don’t take it in house, it still falls on us on the strength of our recommendation.

That’s a heavy burden, but to your point, you have to go back to where the incentives lie. If our incentive is to give great advice, not great product, but great advice as the product, these are just the things that we think are kind of non-negotiable. So maybe I’ll just recap and then let you add anything else you want to close out, but if we think about that opening quote, and then we come back to why do we think

work different. Fiduciary, only, independent, client caps, core values that embody who we are. To us, that’s super, super important. It separates the difference between products and advice. And we hope that our clients see that every day. Pat, is there anything else you would like to close out on?

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Why We’ve Grown – Why staying true to our values and fiduciary commitment has fueled our client’s growth, which has fueled our growth

Patrick Collins (45:53)
think the only thing I’d like to say every once in while I have someone ask me, know, gosh, you started 20 years ago with zero and you guys have nearly $8 billion that you manage now. What’s been the secret of your success? And I’ve never really been able to kind of put it into a quick, you know, kind of answer, but I think it’s what you just said. It’s really making sure that we stay true to what is important to us is fiduciary fee only independence mindset.

And then we just do that over and over again and try to get better at it every day. And I think if you’re a client or a prospective client, are things that you should be, these are types of questions you should be asking. Is my advisor truly a fiduciary, are fee only? What does that look like? And not only that, but what’s the values of the firm? What are they trying to build? I think all that’s really important because you want to pick a firm that you’re going to be able to be with for years and years and years.

and not one that in two years you’re gonna have to go find another one. And part of that is gonna be around values and purpose and what is your firm trying to.

Marcus Schafer (46:55)
Yeah. And there’s, there’s a difference there between a firm, right? A unified approach where you can be with somebody that’s going to help you along your whole investment horizon. It’s kind of like, just like in investing, you want to match your investment to your investment horizon, right? You’re trying to think about, how long am I going to need advice for? We think you need advice every single day, every single year. and so you want to find somebody that matches that.

and you can say, I’m confident in 10 years, they’re gonna still be cutting edge. They’re gonna still be putting my interest first. And that’s what we’re all about. And that’s kind of the standard that we strive to live up to every day. So with that, Pat, we’ll sign out.

Patrick Collins (47:45)
All right, you too.

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