Frank McKiernan: ‘A Client Is a Client’ | Next Gen

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Welcome to Barron's Advisor: The Way Forward Next Generation, a special series spotlighting the emerging leaders shaping the future of financial advice. Twice a month, we'll be digging into the strategies, insights, and game-changing moves that will help you take your practice to the next level. I'm your host, Allison Tucci, and today with me is Frank McKiernan, the founder of Third View Private Wealth, a $1.3 billion assets under management RIA. And today we're talking about his untraditional path to becoming a founder and his investment philosophy and client philosophy. So, Frank, thank you so much for being here today.

Thanks for having me, Alison. Happy to be here.

Yeah. So I want to just hear a little bit about yourself. Tell me about your background and how you got into the wealth management industry.

Yeah. So I grew up very middle class. My father worked in the restaurant industry, my mother in construction.

So mother in construction.

Yeah, construction management. So needless to say, they worked a lot, which was instilled in me at a very early age. So naturally, I was on the job application line to get working papers at 14. So I started in busing tables and waiting tables, which I recommend to any young person starting out. I think the lessons that you learn about people in that industry are invaluable, something you can't learn in a classroom. And then after college, I got a job at a firm called Market, which has since been acquired by S&P Global. Essentially, I was processing interest rate derivatives and equity derivatives. For hedge funds. So the funny thing is I was living in New York City in the Upper East Side, and I'd take the 5 and 6 train downtown to Wall Street. And my first, you know, weekend at work, I bought a book called What Are Derivatives? Because I didn't know what derivatives were at the time.

But you were processing them.

Yes, exactly. So I kind of taught myself that industry and kind of what I was doing every day, which I think kind of speaks to the hard work trumps talent all day. I was never the smartest person in the room. I just was always the most hardworking. And so I did that for a few years. And what I really enjoyed most was the people that I was working with that were on the other end of the phone. So it made me decide essentially what I wanted to do. I wanted to really find something that was at the intersection of people and all the problems that we face as humans every day and throughout our life and financial markets. And that led me to wealth management.

Okay. So how did you go from entering wealth management to founding your own firm? Yeah. That's a huge jump from just going, you know, I'm interested in wealth management to now I'm a founder of a firm. So how does someone else copy that?

Well, I mean, good luck if you're going to try to copy it. But no, I had one of my best friends, and Kyle Germaine, who's actually one of my co-founders now, he was on a large private wealth team at Credit Suisse, one of the largest in the country at the time. So a job opportunity opened up on his team. I took that, and that was kind of my foray into the wealth management business, which was a phenomenal experience. I spent a few years at Credit Suisse and Morgan Stanley kind of learning the business, working with high net worth and ultra high net worth clients, with family offices. And then in 2018, my, the same individual who got me the job at Credit Suisse, we started our own practice at Merrill Lynch. And that was, you know, the beginning of what is now Third View Private Wealth.

So you're founder of Third View and you went through the really the wirehouse channel. I mean, I stalked you a little bit before this. Sorry, but part of the job a little bit. Good job. Sounds like you had a segment of your career also part of an accounting firm. Is that correct? So how does that kind of transition into wirehouse to public accounting to now a founder? And how did you pull those sort of threads through?

Yeah, so I guess my path is somewhat untraditional in the sense that, you know, I started at the wirehouses, which is most people's path, and then I pivoted to what, you know, public accounting firm, wholly owned RAA that, you know, sat with inside of an accounting firm. So I became a partner at Baker Tilly, and I was the youngest partner at the firm when I joined, about 30 years old. And then by 33, my One of my co-founders and I were co-leading the wealth management business of the RIA. So it was just a phenomenal experience overall. Not only are you running your own practice, but you're running a business unit across geographies, managing P&Ls. So kind of different than what a wirehouse advisor would be normally used to. So that was kind of a— I'll call it a quasi-independent experience. And then, you know, we spent a few more years in the fully independent world before we launched what is today Third View Private Wealth.

You mentioned that you're covering now different geographies, P&Ls, and it sounds like it got you ready to found your own firm. So what were those sort of lessons learned that you pulled through that led you to say, okay, I'm ready to now be a founder of my own firm?

Yeah, it's a great question. So I think getting that exposure to a big name is important, especially early on when you're in your career. You don't really know, you know, what's what. I think the client experiences also that kind of compound over time. So I think, you know, what we do now is, you know, obviously we do investments like everybody else, but, you know, it's more than that. It's comprehensive planning, it's tax advisory, it's family office services, it's trust and estate planning. To be good at all of those things, I think you really need to have that first-world experience and sitting around the table with a client and a trust and estate attorney and a tax advisor and the family, doing that over and over again and providing that real-world advice. I think that's what makes you a unique and great advisor over time, and that takes time, right? And I think most people start at the wires, but being able to kind of export that and go to the independent world and do that, the universe is so vast outside of the wirehouses, right? And there's no ill will with any of them, but there's so much more for clients outside of just those names that the decision was, was very easy for us. And frankly, it's what our clients really wanted from us, right? They needed more from us as their advisors.

Can you give another example of something that you, that you didn't find in the wirehouse industry that you found in the independent channel?

Yeah, I think like family office services would be one. Things like bill pay, concierge-type services, right, where you're arranging and coordinating things on behalf of clients of wealthy families. It's just something that you just don't really fall into in the wirehouses. They just have their own models. And, you know, like tax advisory is just a whole nother vertical that you're just not supposed to even speak about, right? Or advising on outside investments for clients, those sort of things. You know, I think having been a partner at a public accounting firm really gave me a lot of unique insight into how families think about their tax professional. People, I would say I was a partner in accounting, and they're like, oh, you're an accountant. I'm like, no, not really. I just ran the wealth management business inside of the accounting firm. So I just think that gave us a real unique lens into, like, again, the difference between the wires and the independent world is just so vast.

So what would be your client service philosophy today for your firm?

So we have this belief, and this has been since like day zero, around treating individuals and families like they're institutions.

I like that.

You treat them as if they, you know, were an institutional type of client. Like this idea of a retail client and an institutional client, I've just never seen the difference. Like to me, a client is a client. They deserve to be treated the best. No matter who they are or what they are. So, obviously, you have the accredited investor and QP rules, that sort of thing, right? So, that aside, but everything else—

That's not the regulations.

Yeah, of course, just for the record. But, you know, everything else in terms of how you service them, how you're investing for them, your approach to client service, and just the overall experience, you need to do that because clients deserve that. If they're going to hire you, they have so many options, right? Yeah. Like, what makes you different? So I think that's been successful for us. Today, we get about half of our new business from existing client referrals. So I think that client experience, you know, people attest to that. If they're referring their mom, their best friend, their cousin, and this is after years of working together, right? So you can kind of see it's like, oh, hey, this actually works. And, you know, just to elaborate on kind of what that might look like, if that's helpful for the audience too, is— We only use separately managed accounts within the investment world. We don't use any mutual funds. If we're going to do alternative investments, we're going to go direct where we can. In some cases we can't, but in most cases we're going to do a lot of due diligence. We have a robust research process, just as an institution would, like an endowment or a pension fund. Those entities are not just blindly putting capital to work. How we report on that information is key. We designed our own custom portal at Third View, which essentially was designed through the lens of a single-family office.

So, oh wow, even for your retail clients? I have no—

everyone's, everyone's the same. All clients get the same experience, but it was designed through the lens of as if you were a single-family office. So i.e., an institutional investor, like this is how you should be viewing your trust and estate plan, all your tax documents, your investments, all your performance.

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You're listening to Barron's Advisor, The Way Forward: Next Generation. We're going to take a short break. Stay with us. Welcome back to Barron's Advisor, The Way Forward: Next Generation. Let's get back into the conversation. So do you do trusts all the way down the spectrum? Because a lot of folks, I think when they hear trusts, they only think about, you know, $15, $20 million plus and clients. So how do you think about that?

So we do trust, obviously we're not drafting, but we have, you know, resources nationally. You know, our whole business is national. We have clients from California to Texas, Wisconsin, Michigan, Florida, up to the East Coast. So we have resources in every geography that we utilize for trust and estate or tax and, We work with those different types of trusts, whether it's IDGTs and SLATs and GRATs and do all the alphabet soup there. But we generally recommend that, you know, clients with an excess of, you know, $2 million should probably have some sort of trust document in place. At a minimum, a basic estate plan, right? Your healthcare proxies, your durable power of attorney, all that stuff. And that's part of our process. Like I said early on, like, you know, yes, we do investments. That's where I cut my teeth. That's where I got started. That's what I know like the back of my hand. But our process is much more planning-oriented, right? We're taking the investments, we're pairing that with the trust and estate advice, the tax advice, because a lot of times that ultimately is what drives, you know, a lot of the pain and the fear and all those negative emotions with clients is the other stuff, right? It's the, what if I were to pass away today? What would happen with my kids? One of the biggest expenses that clients will incur over their life is taxes. How are we, what are we doing to mitigate that, right? Are we being smart? And so this is, people always say around year-end reviews, this is where we do tax, like, no, tax planning is all year.

Yeah, it should be. And I think you hit the nail on the head. So I want to underscore this. Investments has been largely commoditized. I think we all sort of think about that in the wealth management industry. And what normally keeps clients up at night are not necessarily investments, to your point, it's all the other aspects. But you have to get the investments right. Like, that's foundational. Of course. So let's dive into that for a second. Your investment philosophy. You said you cut your teeth there. So, tell me about it.

We have this notion that we don't invest in stocks. We invest in businesses.

OK. More Buffett style? Thematic? Long-term investing?

Yeah, not thematic, but we take this idea of stocks have this— people think trading, buying and selling. We're long-term investors through and through. But we look at a company and we say, is this a business that we want to own for the next decade? If it's not, then why do we own it? We want to invest in management teams that are thinking in decades, not quarters and years. So there's just this phenomenon, obviously, with the rise in trading and having it be so democratized. Everyone's doing it on their phone. Just being able to access information as quickly and as readily available as it is. I think that's changed and added a little bit of a short-term gratification component to the market, which historically historically was never there, but now it is. But why change? Pick any company. If that's a business that we want to own today, we think it's attractive for the next decade, just put it on the shelf and forget it. We do that for clients and we try to educate them on why we think this is how you should be thinking about investing longer term. Alternative investments, the same thing.

I was just about to say, public and private markets, the rise of the private markets in more, I would say, retail, you know, even though you don't bifurcate between retail and institutional, has been, has been huge. So how have you really thought about it that way? If you have long-term investments in a private markets that's consistently changing, what private markets meant last year is very different than what it is this year and the access is different. So how do you think about that?

So you got to think about it in terms of risk. And, you know, our view is that risk varies inversely with knowledge. OK. OK. So the more you know about an investment, the inherently less risk you're taking.

OK. So just doing more research.

Yes. Knowing what you own, right? If you're making investments and you don't know a lot about the investments you're making, you're taking a lot of risk. And yeah, maybe there's a chance it works out, but, you know, there's probably a greater chance it doesn't. So we try to avoid those. Don't hit any icebergs along the way. You know, we've been, I think, fortunate enough to, We've been active in venture capital for our whole career, pretty much. And sometimes it doesn't work out, but I think given where the world is at today, I think we've been fortunate enough to get exposure to certain things that have really worked out, names that you know and everyone would know, in the private markets that have really compounded the overall portfolio experience for our clients. And that's what they rely on us for. It's going back to that institutional investing for individual investors is how do you Right? That's what the endowments and the pension funds and sovereign wealth funds are all doing. They're doing that, right? So how do you bring that experience to the everyday client? So that's where, you know, our job is, is really to go out and find those partners and those resources to bring that to our clients.

Can you give me an example of that to just bring it to light for the audience?

So like OpenAI, for example. So we invested in OpenAI vis-à-vis a fund of funds through one of our institutional partners in 2023., at a $100 billion valuation. I think current markets are at $850 or so. That's a decent return. Yeah. So I think, you know, again, it was a blind pull. We didn't go out and select that individually, but it just happened to be through one of our managers, our primary VC managers, that we got access to it, or that they got access to, you know, and ultimately our clients got access. Same thing with, you know, Databricks and Anduril and all the private companies that are really driving this proliferation of quasi-public private companies today. I think that's just so important. If you're an advisor and you're thinking about, "How do I add value?" I think, like you said before, investments are largely commoditized. Anyone can go out and pick an S&P 500 index fund. The returns will be fine over time. But what are you doing in the investment lens, in the investment lane, above and beyond that for your clients? I think to some degree, clients want a little bit more than that. They want to be able to tell their friends at a cocktail party or at the country club that, "Hey, my you know, team got me into this or I'm invested in this. So not to say it's— if you're not able to, that's going to be a negative. But I think that's if you're thinking about your value proposition to clients, you really got to be thinking about that because we're in the first inning of this whole game and I think it just started 2 years ago. So I think you really got to start thinking big picture about that.

So it sounds like you have partners that you work with, venture capital firms, etc. Can you elaborate on how you found those partners? And for an advisor who's maybe thinking about, hey, I want to do exactly what Frank is telling me to do, but how do I do that?

You got to say yes to everything. That's been one of my philosophies in life. I'm 36. You know, I've said yes to as many things that have come my way. And I think that has really just been the difference in forging relationships with venture capital firms, private equity firms, CPA firms, trust and estate firms. I think we're all fortunate enough, at least I am, to live in and around I'm from New York, so I get to come here quite a bit, and it's just such a vibrant and active place for networking. And after COVID, you know, we kind of hit a 2-year period, was a little rough, but it's back and it feels good. I've been in events recently and it just feels good that everyone has that same kind of mission again, and it's refreshing to see. So my advice would be to do that, and I can't tell you exactly where to start in terms of, oh, you should go look at this firm or that firm, but I think having that mindset around, Putting yourself out there. And it's— you have to think about like, this is not for you, it's for your clients, right? This is for the benefit of your clients. So I get up every day and I'm thinking about how do I add value to Mr. and Mrs. Smith's life today, right? How do I make my business better that's ultimately going to make their client experience better? You know, it's funny, we had this client had come to us at one point and, you know, it's— I think it's Typical where, you know, you're employed by a client to do their wealth management and their biggest fear is around their money, making their investments work and last over time. But after we start working with clients, that fear changes and it becomes, what if something were to happen to Frank and his team? Right. And that's our mindset is how do we make sure the clients, every single client feels that like their biggest worry should be if something were to happen to us as their team. And I think that's really powerful.

What piece of advice or guidance would you give to an advisor that's maybe either trying to make a jump into founding their own firm or an advisor that is, you know, at an independent and is trying to become that person that is integral to their client's life?

I think that it is just in human nature that we overestimate risk and underestimate opportunity. That could be starting a business, could be— it could be anything just generally in life where that's how we as humans are. So I would say to any person that's out there that feels stuck or doesn't know if they're in the right seat or just, you know, just doesn't know what to do because I've been there. My advice to you would be, if I presented you with a genie in a bottle and the one wish that I can grant you would be, if you can start any business or any venture that would not fail, what would it be?

That's such a great question.

And the answer to that question is undoubtedly how you should spend all of your time and energy on.

Well, Frank, that was such a fantastic way to end this conversation. So thank you so much for today and for being in the podcast studio.

The production team for Barron's Advisor: The Way Forward: Next Generation is Ellie Ismailidou, Rebecca Bisdale, Paul LeBlanc, and Alexis Moore. Jenna Mathis is the director of programming for Barron's Advisor programs. Greg Bertollis is the editor-in-chief of Barron's Wealth and Asset Management Group. Allison Tucci is a freelance host for Barron's Advisor and SVP at AssetMarkt. We'll see you next time.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.