Justin Castelli, Founder @ RLS Wealth Management & Co-founder @ the Advisor Growth Network

 

 

 

 

 

 

Justin Castelli is Founder of RLS Wealth Management and Co-founder of the Advisor Growth Network. Justin is one of the most influential young advisors in America, recognised for his blogs and podcasts, All About Your Benjamins and The Entrepreneur’s Blueprint.

We sat down with Justin in advance of Wealth/Stack to discuss his brand, his mentors, staying fit for business, using ETFs and his Wealth/Stack session on how to build your business using social media.

“My brand is just me being myself. Three key things that I believe in are being genuine, being authentic, and knowing that it’s a long game, it takes a while to build.”

Jobs in ETFs (JiE): How did you get into financial planning? You studied Economics. Was it a logical step, by design or accident?

Justin Castelli (JC): Definitely more by accident than design. I majored In Economics and minored in Political Science as my plan was to go to Law school. The summer before my senior year I met my wife and going into graduation I realised that she was somebody special. I wasn’t super passionate about Law school and I didn’t want to delay the relationship three years to go to school again so I graduated having no idea what I was going to do. 

My Dad introduced me to people in the business community in Indianapolis, I did some networking, met with various financial advisors and really liked the idea of working with individuals, solving problems, no two days being the same and felt that it was the path to follow.

JiE: Tell us about your career path.

JC: I started as a financial advisor at an insurance-based firm and while insurance has its place in financial planning, I didn’t want a life selling insurance. I moved to a bank, hated being confined to the branch so joined a 403(b) company and knew immediately that it was going to be my stepping stone to one day going independent.

I don’t like being told what to do and though I was never forced to do anything that was not good for clients at any of the firms I worked for, there were always the pressures of “Do this product” . . .  “Hit these numbers” – not the way that I wanted to operate. I was young, without a client base and I’m not very aggressive when it comes to growing and reaching out to people, so working at a 403(b) company, helping teachers, allowed me to learn the business, get my CFP designation and build relationships with people that one day would follow me into my own practice.  

I had always planned on leaving the 403(b) company to start my own firm but I met a woman with an independent firm in town looking for a succession plan. It sounded like a good opportunity but just didn’t work out and at that point I started my firm, aiming to work with young professionals as well as retirees, doing things my way – that’s how RLS Wealth Management came to be.

JiE: Did you always know how you were going to launch the business? Did you plan to serve young professionals/millennials? 

JC: The only thing that I didn’t know at the time was the name of the firm, that was the hardest decision for me! Late on the day before launch, I still didn’t have a name and took inspiration from my two kids – meaning a rebrand when number three arrived!

I knew that I was going to custody at TD and I knew which financial planning software I was going to use.

I wanted to maintain existing clients. They didn’t have the big portfolios that most financial advisors look for but they were great – my first 30 clients at RLS were teachers that followed me twice. On paper, they don’t look ideal, they don’t have a million bucks but they are conservative, they have pensions and they have a decent amount of money saved up. I was naturally attracting them through referrals and we have become friends.

I wanted to work with young professionals with the major difficulty being that they don’t have any money to manage so that’s where I found the subscription model, helping to fill a gap in the market in terms of how they are served.

Can you give some insight into how the business is split? 

JC: I work with 114 households, 36 of those under the subscription model. With a little over $31m in AUM, less than $4m is attributed to this so AUM is still heavily dominated by retirees, but if you look at growth, that’s faster in the number of clients coming from the subscription side.

JiE: Born an entrepreneur or did it emerge later in life?

JC: Definitely the latter. I grew up living a very privileged life, not in the sense that we were wealthy, but privileged that I didn’t have to do much. My job growing up was to do my best at school and give everything on the basketball court. I didn’t get my first job until I was in college, so it’s not like I grew up selling things and hustling to make some extra money – that was not me at all.

My entrepreneurial spirit has only emerged over the last year and half, spurred by the social media and content creation. Doing that required me to step outside my comfort zone, do things I’d never tried before, be willing to put myself out there, sometimes fail and sometimes succeed.

I wouldn’t even say that I’m overly entrepreneurial in my business. I’m entrepreneurial about the way I’m trying to grow it.

JiE: You have mentioned, tongue in cheek, that entrepreneurship a sickness.

JC: The sickness is the shiny object syndrome where I get an idea and if it feels like it makes sense I want to pursue it. My wife hears all these crazy ideas but she understands that’s just me processing. If you do too much of it you can spin your wheels so some of the ideas I just shut down right away and pursue others like the Advisor Growth Community and the consulting work that I’m doing with advisors. 

JiE: Any low moments and, if so, how did you overcome them?

JC: I consider myself lucky that I can’t look back and identify any specific low moments. There must have been times where there was frustration or disappointment, but nothing traumatic. I think the lowest moment would be losing a client – having a client pass away.

I’m a big believer in mind set, the power of your mind and what that can do for you. It sounds a little pie in the sky but I’ve seen it work throughout my whole life and nobody can convince me otherwise. The way you view life and the way you do things can help. I’m fortunate to get to do the job that I love. I get to work with clients that are all friends and family members. Many of them held my boys as babies, knitted blankets for them – so they are very strong relationships.  There’s very little about my job that ii don’t like, it’s hard for me to stay down if there’s a little hiccup.

I’m an optimistic person, maybe a little bit to a fault but I’m just always able to find the silver lining to turn any negative experience into a positive – certainly something my parents instilled in me and that try to instil in my boys.

JiE: Tell us about early hurdles and how you overcame them.

JC: The biggest hurdle after my first 30 clients followed me, was not knowing where new clients were going to come from but I just kept on focusing on existing clients and creating content. Referrals came, old clients found out I had my own firm, they came back to me and things took care of themselves.

Another real hurdle is the fact that I’ve always been a financial advisor, never a businessman. Running my financial planning firm and managing relationships is easy but running the business is a different story. Now I have a Director of Operations who takes a lot of that off my plate, so I don’t have to worry about it.

JiE: You mentioned your Dad instilling confidence in you. Are there other mentors in your life?

Definitely my Dad – one piece of advice that sticks with me is just always to do the right thing and treat people right, something he told me from a very young age and exhibited regularly.   

I recall going to pick up a new car at the dealership as a young boy to find out that somebody else wanted that same car. Dad recognised him and knew that he had just come back from serving overseas in the military so he just walked away, didn’t even negotiate on it, just explained that he deserved it more than we did,

From a professional standpoint, whenever this question comes up I will always shout out Josh Brown. His blog, The Reformed Broker, was the very first financial blog I found and it hooked me on wanting to write a blog. I just enjoyed what he did and thought it would be a fun way to prove myself as an advisor but also put myself out there as an expert.  

Over the last four years he had become a mentor from afar, whether through his writing or taking phone calls. We went to dinner last year and he has become a very influential person in my growth and goals for my firm. He has been generous with his time and his advice and become a friend so I’ll always shout him out first.  

There are a lot of other people that have been instrumental in my growth through the friendships and the conversations that we have. Being financial advisors, especially having your own firm, can be lonely but through social media and creating content, I’ve built a tremendous network of friends that I can talk to at any time. We push each other to become better. We don’t view each other as competitors but as peers in this profession trying to do good things.

JiE: You clearly take time to advise other financial planners. Tell us about the Advisor Growth Community that you have launched with Taylor Schulte. What are the goals and what are you excited about?

JC: Taylor and I created this selfishly. It’s something we both wish we had access to earlier. It’s only for financial advisors, for advisors that are looking to grow their businesses but also develop personally.

Every month we’ll have a guest speaker. I’m really excited we’re having Rory Sutherland, author of Alchemy, as one of our first. The goal with speakers is to have a mix of the people we love in finance and people outside finance, like Rory, who can bring a fresh perspective.

Our common interest is the future of the profession, where it’s going and taking a leadership role in that process. We don’t want to be an echo chamber because we can get that on Twitter. The key to success will be the collaboration within the community. If you’re not looking to share, you’re not going to get much out of the community. The more we share, the more we learn.

Getting together and seeing other advisors as peers and not competitors will help us grow and make the profession better. I enjoy spending time talking to other financial advisors instead of networking at the golf course. I get new ideas that I can take back to my clients and make them happier or I get a new ideas as to how I might be able to attract a new client and a new way of doing things. If anybody thinks I can help them I want to talk to them and the funny thing is I probably get just as much out of those conversations as they do even though they came to me for advice.

JiE: Can you define your brand?

JC: I don’t really like the word ‘brand’ but it is what it is. My brand is just me being myself. Three key things that I believe in are being genuine, being authentic, and knowing that it’s a long game, it takes a while to build.

I love hip hop so there’s lots of hip hop in my content. My family is very important – the boys are part of it. Everything that I’m interested in, and can find a way to connect with my professional life, I do.  

I rarely wear suits now, I love to make and wear t-shirts that are financially related. If you come to my office, you’ll see Kendrick Lamar CDs decorating my wall. I just want people to know who I am and I’ve realised that if you’re able to put your true self out there your listeners are going to know who you are before they ever reach out to you to work with them.   

When people do reach out it’s likely to be a great fit because they understand your philosophy when it comes to planning and investing and they like something about your personality. It makes the process of converting from a cold lead to a client a lot quicker because by the time they call you, they already know they want to work with you. Clients expect transparency from a business standpoint but also the more transparency from a personal standpoint the better. 

You have to make sure that the persona you’re putting out on social media and in content is who you are when people meet you. You can’t have a disconnect. Being yourself allows you to get that right.

JiE: How do you manage the pressures of being an entrepreneur and the responsibility that you have as somebody with a defining role in clients’ lives? How do you stay mentally fit? I can’t all be Crossfit!

JC: Crossfit is part of it is for sure. If I go a few days without my workout routine, I don’t feel good. There’s a big component of the mental side that is just getting my workout, and also balancing being with the boys. I would be a lot less happy if I was missing out on things with the boys. I don’t miss practices or games. I have the ability to shift the work to odd hours.

Going back to my optimism, there’s not a lot that I really stress over. I take the work that I do for every family very seriously and I also know that the financial plans we’ve put together, if we stick to them, should take care of most of the work. I just need to make sure I’m communicating with my clients, answering any questions they have and just making sure they stay focused on the plan. It’s really about just making sure that I’m able to address the behavioural part of the relationship. They trust me at this point, but that’s not hard part because we’ve worked together for so long and I’ve done the things I said I’m going to do. If you tell somebody you’re going to call them on Monday, call them on Monday. People are blown away when you actually do what you say you’re going to do.

I’ve been through 2007, 2008, 2009, so I’ve had my war wounds as a financial advisor and see that sticking to the plan is the best thing to do. I have the confidence that the next time something like that happens, I’m able to help my clients. Again, I’m lucky in that I don’t stress over a lot. 

I have good relationships with my clients and very clear communication which always helps but the balance between work and home is what keeps me sane.  

JiE: Are ETFs important to you? Are there things that the ETF industry needs to do differently or do more of to be more relevant?

JC: I use ETFs pretty much exclusively with my young clients on the subscription model. One of the main reasons is the no-transaction ability through TD Ameritrade. I can buy their ETFs at a real low cost – total stock market, total global market, just the basic indexes – but it allows me to build a very low cost portfolio that’s not ringing up a commission every time they save into the Roth IRA. 

Almost all of my assets with young clients are in ETFs and I also use an ETF sleeve with my retirees for a tactical component. 

I also try to use them a lot more in non-qualified dollars. Most of my teacher clients were 100% qualified dollars where the benefit of ETF versus mutual fund wasn’t quite as great, but as the firm has grown and taken on clients with a little bit higher net worth, we have taxable money now so I try to use ETFs more there for the tax savings. ETFs will only become more popular within my firm as time goes on. 

The general public still has a lot to learn about ETFs, at least in Indiana. They all know what a mutual fund is but when I bring up ETFs their eyes glaze over. As an unknown, they fear that they are riskier structurally. I have often been asked what ETFs are going to do if we have another flash crash.

Both the ETF community and financial advisors need to drive home more education for the general public. 

JiE: Any trends that you’re excited about?

JC: I’m excited about the opportunity for funds to be very specific. Even though I don’t use them, it’s interesting to see some of the newer funds giving exposure to specific areas, marijuana being a big one. I think ESG ETFs will be exciting because of how specific they can get.

JiE: Wealth/Stack, Stocksdale, Arizona is coming up. Tell us a bit about your session on building your brand via social media. Without giving away the session, share some tips for getting started on content creation.

JC: Our panel is on Sunday and there’s a video out there saying that it’s going to be the best one so we’re excited to live up to expectations! 

Douglas Boneparth is moderating. Nina O’Neil, Dasarte Yarnway and Tyrone Ross Jnr. are on the panel with me – we are all friends. Tyrone, Douglas and I have a standing Friday morning meeting via Zoom. Mina is in my study group and Dasarte was kind enough to ask me to be his mentor so I talk to him all the time.

We’re all growing our businesses through content creation and social media, but we’re all doing it in different ways so you’re going to get different perspectives. 

As far as getting started, the first thing I would tell somebody is just start! Put that first blog post out there. If you’re going to do a podcast, get that first episode recorded, because you’re always going to find a reason to delay.  

Be honest with yourself and determine what the best platform for you to tell your story is. Are you a writer? Are you more comfortable interviewing people and doing a podcast? Are you more comfortable doing video? Select your platform, start there, and if you want to expand to others then you can.

I would not get worried about there being too many podcasts or too many blogs. There could never be too many. Every financial advisor could have a blog and that would be fine because we all have different ways to view and explain things.

If you’re only going to pick one platform and you feel comfortable with all formats, go with video. You can turn one piece of video into multiple pieces of content – into a podcast by using the audio, which in turn can be transcribed into a blog. A longer video can be cut into different segments and used on Instagram, Facebook, etc. in short bursts.

If your goal of creating content, is to help people get to know you, there’s no better way than to be seen and heard at the same time. Video allows people to get to know you best. It’s also the hardest to get comfortable doing, but it gets better with time.

Tell your story through the education that you’re trying to provide. If there’s one reason to start down this path it’s that you want to help educate the public. You want to grow your business, but you’ve got to go about it from the standpoint of an educator – people will see that and your business will grow. I believe it will, I see it happening for other people and it has happened to me.

Early on I often wrote trying to impress other financial professionals. When I realised that the reason to write was to educate the public and grow my business I quit worrying about trying to impress peers and that’s when I started to see traction. I also started getting feedback from the financial professionals I was trying to impress originally! Focus on educating your audience and then the other benefits of doing that will come.

 

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