Name
Title: Chief Operating Officer
Company: Financial Consulate
Web Address: https://financialconsulate.com/
Mike McCarthy is chief operating officer and chief compliance officer at the Financial Consulate, a fee-only RIA based in Maryland and Pennsylvania.
What services does your wealth management firm offer & what is your AUM (if you wish to share the latter)?
Financial Consulate provides wealth management, financial planning, tax preparation and planning, retirement and estate planning, insurance planning, education planning and small business accounting services, and has $550 million AUM.
What was the personal motivation for you to join (or launch) your firm? Please share some details if you wish, such as the age of the firm, partner info, location/s, investing emphasis, etc.
I started out with a career focus on tax accounting in the investments and high-net-worth family areas. Within a short period of time I realized that I had much more passion for delivering advice and planning to improve clients’ outcomes as opposed to simply reporting on what happened. My first opportunity to make this transition was with the Financial Consulate.
Founded in 1984, Financial Consulate, with offices in Hunt Valley, Md. and Gettysburg, Pa., has over 35 years of experience providing clients with trusted advice. Our team of independent financial planners offers clients comprehensive financial planning and tax planning services.
When I joined the firm in 2008, coming from the highly process-driven environment of an accounting firm, I quickly recognized the need to replace manual processes with an advanced technology solution.
As a firm already dedicated to technological improvement, but still saddled with outdated processes like using Microsoft Excel to trade, completing quarterly billing over nights and weekends, and operating with an off-the-shelf CRM system, we knew the model had to change.
I realized we needed technology that could service our diverse client base in a way that not only empowered our small administrative team, but also allowed for customized options to best serve the full spectrum of client needs and expand the ways in which we could serve them.
What is the average age/gender/financial demos/social composition/geographical location of your client base?
Our clients are widely spread throughout the U.S., and include some U.S. citizens living abroad. Our strongest concentration of clients is in the areas around our home office, primarily MD, DE, PA and VA, and we also have a concentration in FL of clients seeking warmer climates and friendlier tax situations. While we have many high-net-worth clients, most are in the category of mass afluent. We also have concentrations of small business owners, state and federal employees, and concentrations within some local large employers like McCormick.
What financial technology tools/services do you currently use in your practice?
After learning about Envestnet | Tamarac and exploring the offerings with Drew Tignanelli, our President, the decision was made to embark on a new partnership. In 2012, we onboarded three Tamarac solutions—Advisor CRM, Advisor Portal & Rebalancer, and Reporting & Trading (since renamed Tamarac CRM®, Tamarac Reporting®, and Tamarac Trading®)—and we’ve never looked back. As Envestnet | Tamarac has continued to expand its offerings, we have grown right alongside them by implementing some of those new solutions, including the use of MoneyGuide and Yodlee.
Do you feel the fintech tools/services you use give you any sort of competitive advantage over other advisors and/or do they help you retain clients or win new business more easily? If so, how?
As a result of our partnership with Tamarac, we’ve been able to grow our business in a way we could never have before. One of the major reasons we’ve gone from serving 300 to 1,000 households over the past seven years is because the platform allows us to do so much more at scale with high levels of accuracy. Tamarac’s advanced technology provides us with real operational efficiencies, which equips us with the tools to deliver a better client experience and a higher level of overall service. The connection between portfolio data, CRM data, and the ability to create a seamless process using that unified data set allows us to react flexibly when certain planning opportunities present themselves or when we wish to test new ideas.
How have your clients reacted to the fintech that your firm uses?
Since partnering with Tamarac several years ago, client feedback has been very positive. With the Tamarac Client Portal, Financial Consulate has found an incredibly powerful tool and our clients have been appreciative of its benefits. I also believe it has elevated us to the position of a larger firm.
While we’re still a small firm, the ability to use a custom-branded app helps us demonstrate the added value we provide. When our clients are familiar with our brand and philosophies, they’re more likely to trust our services and refer us to others. The firm takes full advantage of the Client Portal’s customization features, such as embedding monthly videos to promote our commitment to ongoing investor education. Clients can find everything they need on the Client Portal—from uploading tax documents to accessing custom reports and aspects of their MoneyGuide Plan.
When it comes to managing client relationships, the Tamarac CRM solution helps the Financial Consulate team provide differentiated client experiences. Because Tamarac CRM integrates with a broad range of data sources, it can deliver key analytics without the need for manual intervention. The ability for financial advisors to perform advanced analytics has been a game-changer for us.
For example, when a natural disaster hits a certain part of the country, the team understands how it can wreak emotional and financial havoc on its clients. Using the CRM zip code search function, the team quickly identifies clients living in nearby areas, builds a database of those potentially affected, and reaches out to provide needed support with things like filing insurance claims, determining if there is enough cash on hand to cover short-term expenses for hotels or transportation, and figuring out if clients need help accessing essential financial documents. We want our clients to know we are here for them—to assist in any way we can. The ease with which the CRM allows us to connect with clients has made a real difference in the strength of our relationships.
The firm also takes advantage of the CRM dialog tool to engage with clients on the highly effective process of “if-then” planning. With in-depth knowledge of its clients and the challenges they face, such as preparing for retirement, divorce, or the death of a loved one, the team builds dialogs and a series of workflows, so that every step in the process is followed explicitly, and documented.
Have your clients requested that you add any other financial technology offerings that you are not presently providing? Do you anticipate adding any new fintech offerings in the next year?
Financial Consulate’s clients truly value the innovative technology that helps them keep track of their financial health. Our ability to update our clients’ net worth statements in a more timely fashion, much more comprehensively than we could accomplish previously on paper every few years, has changed the way they view their financial future. Much of our current focus on expanding the tech we use with clients is to create better online meetings through high-end video conferencing, as well as looking into better scheduling tools that give clients easier access to their advisors calendar.
As Financial Consulate’s business continues to grow, the team looks forward to its ongoing partnership with Tamarac. With Tamarac’s pace of innovation, Financial Consulate will remain at the forefront of integrated technology, allowing our advisors to focus on deepening relationships by serving clients better.
Finally, how do you think fintech will impact advisors in general, and your practice specifically, in the future?
I think fintech is not only making it easier for the advisor to do his or her work in a more efficient way, but is also giving them the tools they need to start more meaningful connections with clients. Implementing technology that facilitates and enhances the advisor/client relationship is one of the best ways to help clients reach their financial goals. Getting clients involved is an important component of developing the most appropriate plan for them and getting them to implement that plan; by getting advisors the technology to better manage those processes and relationships, we are empowering both parties to reach success.
Most recently, Financial Consulate implemented an integration with Envestnet | MoneyGuide, enhancing our ability to provide holistic financial advice. With MoneyGuide, our ability to build comprehensive financial plans has increased dramatically. Additionally, the firm’s integration with Envestnet | Yodlee allows advisors to uncover held-away assets and help clients obtain a full picture of their wealth.