• Kindly give our readers an introduction to your business. Please include what your business is all about, in which city you are located and if you have offices in multiple locations/ cities.
◦ Allodium is an independent, fee-only investment management consulting firm based in Minneapolis, Minnesota. We are a Minneapolis-based Registered Investment Advisor (RIA), and we provide investment advice to both individual and institutional investors. Our firm was founded in 2005, and since then, we have helped many investors with fee-only financial advice. We currently manage over $300 million in investment portfolios.
• Kindly give us a brief description about yourself (it should include your brief educational or entrepreneurial background and list some of your major achievements).
◦ I grew up in Rochester, Minnesota, and then attended Saint John’s University in Collegeville, Minnesota, to earn a bachelor’s degree in business with an accounting concentration in 1982. I subsequently passed the Certified Public Accountant (CPA) exam and worked in public accounting after graduating from college. I went on to earn a master’s in international management from the University of St. Thomas in Saint Paul, Minnesota, in 1989, where I later was hired to teach financial management in their MBA program.
• What inspired you to (start a new business venture) or (to make significant changes in an existing business)? How did the idea for your business come about?
◦ I started in the investment business at age 28 in 1988 at Dain Bosworth (later rebranded as RBC Dain Rauscher), where I worked for 18 years. Working with nonprofit organizations, foundations, and endowments, I learned that the volunteer board members needed guidance as it pertains to managing their fiduciary responsibilities under the law. I attended a course at the Center for Fiduciary Studies in 2003 and earned the Accredited Investment Fiduciary® (AIF®) designation. My employer at the time did not want me to educate fiduciary investors about their fiduciary duties, so I decided to start a new Independent Registered Investment Advisory firm to be free to serve the clients with objective financial advice—unencumbered by the restrictions and policies of a large brokerage firm. I like to say that I had an “entrepreneurial seizure” and started a new, independent firm so that we could do the right thing for our clients.
• What three pieces of advice would you give to budding entrepreneurs?
◦ Here are three things that I would recommend for the budding entrepreneur:
1. Do what you love; the money will follow. This will require you to take some time to study your passions, interests, skills, strengths, and weaknesses.
2. Put yourself in the shoes of the potential customer. Try to get great clarity on what your potential customers want and need.
3. Listen to your customers, potential customers, employees, and other sources of advice. Most of us would benefit by talking less and listening
more. Ask questions and learn from everyone that you interact with daily.
• What would you say are the top three skills needed to be a successful entrepreneur?
◦ There are three skills that I think are needed to be a successful entrepreneur:
1. Passion for doing something to make the world a better place.
2. The willingness to take a calculated risk.
3. Inspiring other people with your vision and mission to motivate them to help you to accomplish your goals.
• How many hours do you work a day on average?
◦ The entrepreneur’s curse is that it is tough to differentiate between work and play. It is hard for many entrepreneurs to “turn it off” and stop thinking about ways to improve their businesses. I would estimate that I work about 40 hours a week, but my wife might give you a number closer to 50 to 60 hours a week from her perspective. It comes down to what you define as working.
• To what do you most attribute your success?
◦ I made a major decision when I was 28 years old that I wanted to work in the investment business and that I wanted to help people with their investments. I liked working in public accounting in my early 20s, but I somehow knew that my unique God-given skills and strengths would be better applied in the investment planning profession. I thought that I was qualified to help people. No matter what happened or how difficult the obstacle became to accomplishing my goal, I always buckled down and worked harder to achieve my vision. Many people told me that I could always go back to the accounting profession if I failed as a financial advisor. I knew that there was no retreat and that I would never go back to working in public accounting.
• How do you go about marketing your business? What has been your most successful form of marketing?
◦ Now that we are an established firm with clients and a dozen team members, our primary marketing objective is to make people aware of Allodium and our services. We currently are focused on three primary marketing tactics:
Credibility marketing to produce high-quality content that informs the investor about specific topics and establishes Allodium’s professionals as credible experts.
Digital marketing to provide prospective clients with an opportunity to find us on the web. This includes a high-quality website, social media activities, and posting our high-quality content so our website audience can see and experience our expertise.
Referral marketing to educate our clients and other business partners about how they can help their friends and family members by making professional introductions to Allodium.
• Where did your organization’s funding/capital come from and how did you go about getting it? How did you obtain investors for your venture?
◦ As the primary founder of Allodium, I provided most of the capital to get the firm started. I wanted to start the firm without any outside investors and so I had to take the risk personally to provide the working capital to get the firm started. We started with eight salaried employees and no clients and no revenues. The first few years were quite nerve-racking, but we eventually were profitable and have been able to manage a consistently profitable firm for many years now. I attribute our consistent profitability to a great team of investment professionals and particularly to the individuals who run the business operations for the firm.
• What is the best way to achieve long-term success?
◦ Do the right thing. Be ethical. Treat people as they would like to be treated. Focus on building long-term relationships with people. I may have learned how to do the right thing from my parents—primarily from my dad, who grew up on a farm in Iowa with rock-solid Midwestern values.
• Where do you see yourself and your business in 5 – 10 years?
◦ I am currently in the long process of migrating out of the firm as an owner and employee. We have both a management succession plan and an ownership succession plan. The management succession plan calls for me to be delegating more of my daily management responsibilities to other team members over the next five years. Our ownership succession plan calls for me to be selling some of my ownership to key employees over the next several years. While I plan to be involved with the firm over the next 5 to 10 years, my role will change to be more of a mentor and less of a doer.
• Excluding yours, what company or business do you admire the most?
◦ My favorite company is Berkshire Hathaway because Warren Buffett is one of the smartest investors living. I always appreciate opportunities to hear him talk about the economy, the stock market, business, and management. What he and Charlie Munger have accomplished with Berkshire Hathaway is incredible and has helped many of their shareholders increase their personal wealth and financial security over the past 50 years. Warren Buffett is also a decent and polite gentleman with great Midwestern values.
• How important have good employees been to your success?
◦ Good employees are the key to success. At a firm like Allodium, our team of client-facing employees is the face of the company, so they need to be talented investment professionals and excellent client service providers. We also want to have a professionally managed firm, so we select experienced business operations people to focus on running our firm systematically and professionally. We could not have a successful advisory firm without a talented team of employees.
• How long do you stick with an idea before giving up?
◦ If I see a good opportunity to grow the business, I will usually stick with an idea for a long time before I give up. If I have an idea for a new revenue stream, a new service, or a new management idea, I will usually give the idea a lot of time before changing course. I am relatively stubborn and will need a lot of evidence that the idea will not work before changing my mind. Stubbornness might be a good thing for the entrepreneur who has good ideas, but it could also be detrimental to the entrepreneur who has a lot of ineffective ideas.
• What motivates you?
◦ I am motivated to use my unique God-given skills to make the world a better place. When I was 28 years old, I realized that my public accounting background and financial planning skills gave me the tools I needed to help people with investment planning. Daily, I am motivated to help people find a good, objective financial planner. As Allodium has a team of trained, fee-only financial planners, my daily activities often include explaining to individual and institutional investors how they might want to retain Allodium to help them get organized and develop formal financial plans and investment plans. Allodium, as an independent RIA firm, has provided me with the vehicle that I can use to help more investors. I am highly motivated to make Allodium a great firm to help more investors in the coming years.
• What are your ideals?
◦ We value the fee-only investment advisory model because we want to be truly objective financial advisors. Our tagline is “passionately independent advice” because we like to point out that we don’t have the conflicts of interest inherent in the commission-based product provider compensation models found at the banks, brokerage firms, mutual funds, and insurance companies. We are committed to creating a professional investment management consulting firm that provides objective financial advice to our clients. We strive to eliminate the conflicts of interests between the financial advisor and the client that are common in large financial services firms. As an objective, fee-only advisor firm, we have the opportunity to be an evidence-based investment firm that can provide our investment advice based on academic research and statistical probabilities.
• How do you generate new ideas?
◦ I like to think about how to improve the Allodium client experience by imagining that I am the customer. Also, by asking questions about how our team can simplify and improve the financial lives of our clients. Our team members are client service-oriented, and they love to wow our clients. I try to encourage this continuous improvement mindset in our advice and service. Questions allow us to dream about the answers that might be possible.
• How do you define success?
◦ Happy clients who thank us for helping them navigate the complexities of their financial lives. I see success when I recognize that I am already leading a team of talented investment professionals passionate about their service to Allodium clients. Excellent, long-term client relationships based on trust are among the most personally rewarding aspects of our business for our Allodium team members and me. In the end, a large group of happy Allodium clients is evidence that our team is doing their job to simplify and improve the financial lives of our clients.
• How do you build a successful customer base?
◦ Allodium has built a client base over the years by focusing on the needs of each specific client. While many clients might seem to have similar financial needs, as we ask personalized questions and listen carefully to the answers, our clients open up and share with us the needs and wants specific to their unique situations. This open communication, built on a trust relationship, allows us to provide more customized advice and service, which helps our clients to reach their personal financial goals.
• What is your favorite aspect of being an entrepreneur?
◦ Establishing Allodium as an independent, fee-only investment management consulting firm provided my team and me with the opportunity to be able to tailor our advisory services to each client without interference from a large corporation with policies that don’t allow for personalized advice and service. Having this freedom to act in the client’s best interests with a fiduciary standard of care has been a blessing that was only available to me by following my entrepreneurial spirit.
• What has been your most satisfying moment in business?
◦ The most satisfying moment happens to me when a client thanks me for helping them with objective financial advice, or even better when they compliment a member of the Allodium team for assisting them with personalized financial advice.
• What do you feel is the major difference between entrepreneurs and those who work for someone else?
◦ Entrepreneurs understand that you cannot control the world but rather that you can only control your own actions. Entrepreneurs are more likely to take the risk of making a mistake because they know that all improvements to their business will require risk-taking. While entrepreneurs may have fears, they tend to learn how to overcome those fears to take decisive action. People who work for someone else may be more inclined to avoid risk to keep their jobs. Their fears may limit their abilities to take a risk.
• What kind of culture exists in your organization? How did you establish this tone and why did you institute this particular type of culture?
◦ The corporate culture at Allodium is based on seven core values established in writing at the outset of the firm: integrity, service, relationships, professionalism, personal responsibility, attention to detail, organization, and order. We established these seven values to guide us when making difficult decisions. Our focus is on developing trusting relationships with our clients, which requires honesty and transparency. Our clients trust us with hundreds of millions of dollars of their hard-earned assets and they are counting on us to provide them with the financial planning they need to achieve their long-term financial goals. Our core values have helped us create a high-performance team of investment professionals over the past 16 years who are working hard every day to serve our clients.
• In one word, characterize your life as an entrepreneur.
◦ Vision.
• If you had the chance to start your career over again, what would you do differently?
◦ If I could live my life over, I would have started my own firm at an earlier age. I started Allodium at age 45, and knowing what I know now, I would start Allodium at an earlier age if I get the opportunity to live my life over again someday.
• Who has been your greatest inspiration?
◦ John Templeton, who founded the Templeton Mutual Fund company (Franklin Templeton), was my inspiration for starting in the investment business. I read a book about his life when I was 28 years old and concluded that I could (and should) be helping people with investments just as John Templeton had been doing in his life as the founder of the Templeton Mutual Fund group. John Templeton was an intelligent and successful investor, a great gentleman, a devout Christian, and a generous philanthropist. I have often thought about his influence on my personal and professional life during my career.
• What book has inspired you the most? (OR what is your favorite book?)
◦ When I was 28 years old, I read a book titled: Do What You Love, the Money Will Follow by Marsha Sinetar, which helped me think through the things that I am passionate about and the activities that I love to do. Reading this book helped me to understand that I could follow my dream to pursue a career in the investment profession and that I truly had the skill set and natural talents to be successful as a financial planner, financial advisor, and investment management consultant. It was a simple book that could be beneficial for any individual, but I happened to read it when I was at a turning point in my life. The book inspired me to transition from public accountant (which helps people count the beans) to investment advisor (which helps people to make the beans).
• What are some of the biggest mistakes you’ve made in business?
◦ One of my biggest mistakes was giving 25% of the equity in my new firm to a key employee for free. I thought that I was being generous and that the key employee would reward me with loyalty. It turned out that loyalty was not what I got in return for this gift of equity in the firm. This was an expensive lesson for me in time, distraction, and emotional burden. I learned that when you give people equity for free, they don’t appreciate it and don’t value it. Entrepreneurs make lots of mistakes, and I have learned that it is okay to make mistakes if you can learn from them and make your firm better due to the lessons learned from your mistakes.
• How can you prevent mistakes or do damage control?
◦ There is no way to avoid making mistakes. Business owners, managers, and employees all make mistakes. Mistakes and failures happen when you are working in an uncontrollable world. If you are not failing, you are not trying hard enough. The focus is to avoid major mistakes that can bring down the Titanic. I coach my team members that learning from our mistakes is one activity that makes our business better.
• What are your hobbies? What do you do in your non-work time?
◦ I love to work, and I love to be productive. My wife says that I need to get some hobbies. When I take some downtime, I love to read, watch movies, walk, golf, and travel.
• What makes you happy?
◦ I love organizing things for my family, my friends, my Allodium team, and our Allodium clients. Helping people by getting them organized and keeping them organized is one thing that always makes me happy. Spending time relaxing with my family and friends also creates joy in my life.
• What sacrifices have you had to make to be a successful entrepreneur?
◦ When I started my company, I walked away from a very large cash retention bonus program at my prior employer. They designed the retention program as “golden handcuffs” to retain the top talent at the firm. While it was a very significant dollar amount for me and my young family, my dissatisfaction with the bureaucracy of the large corporation was so great that my desire to be able to create my own firm became more appealing than the large dollars that they wanted to use to keep me tied to their firm. Ultimately, my desire for a better way of providing financial advice led to my “entrepreneurial seizure,” so I walked away from the large retention bonus. In hindsight I have no regrets about my decision to start my own firm.
Business Name: Allodium Investment Consultants, LLC
Address: 500 Washington Ave South #4400
City: Minneapolis
State: MN
Zip Code: 55415
Country: USA
Phone: 612-230-3700
E-mail Id: info@allodium.com
Website: https://allodium.com/
GMB Link: https://goo.gl/maps/Mj6hEHavkoCRwz2g7
Facebook: https://www.facebook.com/AllodiumInvestmentConsultants/
LinkedIn: https://www.linkedin.com/company/allodium-investment-consultants/
YouTube: https://www.youtube.com/channel/UC-oM-o60LPdvEevJPemTJcQ
