Ron Carson on Financial Advisers' Trust (Podcast)

Ron Carson, CEO and founder of the Carson Group, started way back in practically in his dorm room in Nebraska, has been one of the leaders in the r i A space, not just through Carson Wealth the sm management business side, but through Carson Partners, which is uh sort of tamp plus for independent are as who were looking for succession, planning and help on the back end of their business with technology, as well as Carson Coaching, which is a program that came about in response to demand

from r I s who we're looking for a little more helping, a little more assistance in in running their their businesses. If you're at all interested in the business off of how asset management is changing, the impact of technology, the impact of alterations to the fiduciary rule, the general trend towards fiduciaries and away from commission based brokers, you're going to find this conversation to be absolutely fascinating. With no further ado, my conversation with Ron Carson vass Masters

in Business with Barry Ridholts on Boomberg Radio. My extra special guest this week is Ron Carson. He is the founder and CEO of the Carson Group, which covers several different companies, including Carson Wealth, and we'll discuss the different business lines. Ron is also the author of Proven in the Trenches and most recently The Sustainable Edge, to best sellers on Amazon. The Carson Group manages well over twelve billion dollars for about thirty four thousand families. Ron Carson, welcome,

two Masters in business. Very thanks for having me. It's a privilege to be here today. So I'm kind of intrigued by your history and your story. This kind of a Michael Dell background. You started Carson in a University of Nebraska dorm room in three am I exaggerating that at all. No. I grew up just north of Omaha on a farm. I thought it was going to be a farmer my entire life. And those that remember the early eighties, you know, interest rates twenty one percent. Farmers

were going broke. My parents went broke, and uh, I was forced to do something else. And I was reading a money magazine article talked about the top professions of the future, and one was to become a CFP and uh, so I thought, you know what, that's what I'll do. And I literally ran three years ago is at the Napa Valley Wine Auction and there's a pre event cocktail party and some ladies said, oh, you're from Nebraska. What do you do? And I told her. She was so,

how did you get into that? And I said, well I read this article. Her faith lit up and she goes, You're not gonna believe this, but I wrote that article. And I'm like, well, then I owe you my career that that's amazing. And I go back to you and I are similar ages. And when I was in college and eight three, I was trying to scrape up beer money. I wasn't thinking about, I know, let me launch a new business in an area that really nobody else is in.

You had to be one of the first independent advisors. Is that a fair statement? I absolutely was, And in those days it wasn't even viewed. I didn't know this. I mean I was totally unconscious and competent. I didn't know what I didn't know. And so I like the idea of being independent and uh but there wasn't a lot of places to even go, you know, the Rooker dealer community was super small, didn't have a lot of technology, sold a lot of product. But that's how I got started,

and you know, to this day it was. It was a great, great growing up experience. I feel like I grew up, you know with the the advisory world. I remember in you know, eleven short years after starting, I was so excited when you know, I realized I could become an r I A and uh and truly be a true fiduciary for for clients and and and as you well know, our space has changed dramatically, you know, several times over the last thirty years, to say the

very least. So so what was it surrounded by farms going broke with interest rates that made you say, I know, I'm going to focus on financial planning. So initially someone told me if I went down to the brown got to play football, and I, uh, my first part of the season, I ended up becoming injured. I was, you know, reread shirted. And but I came from a family where

you know, my parents were struggling. I'd have any money, and someone said, you can sell life insurance and make money, and I thought, well, I've always had a knack for selling things. Even as a kid, I went to auction school, so I told people and let me do an auction for their junk. And you know, I had a little popcorn business. I had a lot of little businesses. So

I always had this entrepreneurial um spirit. And for six months I just called out, called out of a phone book and amical Life had just come out with Life insurance in those days, the fighting to come out with the Universal Life, and I didn't like trying to talk someone into buying insurance whether they needed it or not. And shortly after that, I thought I want to get

my securities license. And I was fascinated by the stock market and and you know, the capital markets and how they functioned, and it just, you know, I feel like I have hardly worked a day in my life. The first few years were tough. There's a couple of times I thought I hated, I was going to quit the business. But once I got some i'll call it, you know, epiphany around just you know, taking care of people and

really putting people's interests first. Not only did the profession become a lot more fun, but I grew incredibly fast and and I've always stayed in this in this line of work. And I've always, um, I've always been a non traditionalist. I've always thought of different ways of doing things and until it allowed me to not only be in a in a business that I enjoyed, but it gave me a lot of, you know, creative space in

order to try, you know, to try different things. I love that phrase that you hardly you've never worked the day in your life. My wife used to tell people I'm gainfully unemployed, which I guess is sort of the same spirit. So so, since you started back in eighty three, you're coming up on forty years soon. Do you recall who was your first client? Do you remember the first person who said, Ron, you seem like a trustworthy guy. Here's all the money I have in the world, try

not to screw it up. I do. UM. I I still they owned UM. They owned a drug store in the middle of um, Nebraska. It was a small, small town, and I remember them writing me a check and uh and I and I pulled. I pulled out a town. Of course, there was only gravel roads in and out of this small town, and I remember pulling my car over. I got out and I ran around it like six times, jumping up and down. You would have thought I won

the powerball lottery. And those uh, the the they he passed on shortly after they became clients, maybe a couple of years, and then she was a client until probably about five six, seven years ago. And then their children are clients to today. And but that was that was the very very first one. You'll never forget the first one. Yeah, that's a great story. Let's talk a little bit about

this division of the Carson Group. Tell us what is Carson Wealth and how does it fit into the bigger umbrella organization which seems to have a number of moving parts. So we have Carson Group and then Carson Wealth. Berry is the very very first, you know, part of Carson Group. It's our retail offering. So we're on a registered investment advisor. We manage you know, close to thirteen billion in assets for you know, several thousand families around the United States.

And our mission is to be the most trusted for financial advice. And if I'm driving down the road and I don't know anything about our profession, I'm listening to this, I'm like, well, doesn't everybody you want to do that?

And I would say, maybe, you know, how many. I don't know how many people consciously think of it, but we're in a profession unfortunately that that you know, in financial services is a huge category berry, but sixty of Americans do not believe that their advisor or the institution they represent, we're going to put their interests ahead of their own. And that's really the mission of what we're trying to do. Nobody owns the space, and it's so

fragmented to this day. There's two thousand financial advisors. There's roughly a half a million in the mid nineties. Of the two today, nearly a hundred eleven thousand are going to retire. UM we call them rich and tired. Most of them made a lot of money and they just don't want to keep up all the technological change. And we see that as a real opportunity to UM grow market share, but do it the right way. You know, we've we have quite a few offices around the country.

We have you know, are proven process We have very specific ways of of delivering you know, the value proposition. But you know, ultimately, you know, I feel that we have a real shot at owning or co owning that in the future. You know, when you think about Vanguard owns and as far as a brand low cost investing fidelity owns. You know the retirement plan market, um, but no one really owns the trusted wealth management market. Quite interesting. You alluded to something that I want to circle back

with you because you went by it so quickly. Six of the public do not believe that their financial institution has their best interest, Yes, and barried to this day, most people do not know. So I travel around the country pre COVID. I probably give sixty seventy talks a year, and many of those to retail clients of ours. And I always ask the question, who in here can tell me the difference between a produciary and a broker, and

anywhere from zero to one, hand will go up. I mean I was speaking at a CEO institution last year. There was sixty CEOs from all over the world. Not one of them knew the difference between a puduciary and a broker. And and to this day of broker is not required to put at your interest first. It's only suitability, that's it. I mean, if they disclose it in a you know, one thousand page perspectives and it says they

can do it, and they can charge it. It makes it quote unquote legal, and and we have a son of Carson. Just because it's legal doesn't mean it's right. And I think we still have a massive gap between understanding produciery versus brokers. And I will open those talks to say, listen, if you get this one thing right, do you understand a true producer versus a broker? And you pass it on to someone you love and they get it, You've given a true gift that will give

for the rest of their life. Now here's one of the really interesting things about the R I A industry. Over the past twenty years, a lot of who we think of as big brokers you b asked Mary Lynch, Morgan Stanley, a big portion of their employees have moved either to be hybrid broker r i A S or just registered investment advisors. Are days, is the fiduciary side of the street is the fe only no conflict of interest versus the brokerage sales commissioned side. Is this side winning?

Do you see that as the trend that's taking place? I do. I mean the trend is accelerating. Marry, And let me just say something because I think this is a fact that gets lost on a lot of people is everybody has a conflict of interest, right, you can't

help it. I'll use an example. Let's say you've got it um an R I A who has a hundred million dollars under management and his largest client has fifty million dollars with them, And his largest client comes and says, hey, I'm thinking about taking fifty million dollars out and buying this business. That advisor has a conflict because he realizes if he loses that client's asset, he may not be able to stay in business. But we all know that the conflict is are you gonna do? Remember what I said?

I said put the client's interests that of their own interests. So this adviser to say, listen, yes, let's do that and give them the best advice, even at the demise of his own company. Is it's a conflict, but it's at least a conflict that the client I think consciously knows are going in. Am I going to get the best advice because this could hurt his business? And there's also conflict very unfortunately even on the fiduciary side, more so that are more nuanced, like cash you know before

when we're back, we had yield. There are some fiduciaries that, in order to they would not take the time or effort to sweep a client into the highest yielding cash and let it set somewhere where they weren't earning a lot of cash. That's a conflict, especially if you've got a custodian. It's going to charge you or the client some additional fee if they're not making the return on the account. I still think our profession has quite a

ways to go. The fiduciary is the future. But I think even as fiduciary areage, we can get better at putting the client's interest first and being more transparent. I love that story of the sweep and some time ago, um, I know you must have a ton of war stories.

I do. Also, we figured out, you know, very often you run with a little bit of cash an account in case a client asked for a disbursement or something, whether it's forty or fifty or sixty basis points, it's something relatively small, and very often when the market is going higher, it's a slight drag on performance. And we figured out a long time ago it was much better to sweep the cash into one of the higher yielding

money market accounts. We figured out, we did the math, we analyze that, We sat and played with it and said, net net, this creates a few hundred thousand dollars of positive gains across all our clients. But we're relatively small shop like yours. Sweeping cash into a higher yielding money I could account. Have you ever sat and figured out the math on how much additional gains that generates for clients? Yeah?

Last year alone, we estimated, you know, it was in the high single digit, you know, seventy eight million dollars, you know, directly to our clients because we we we did the sweep and very How crazy is I think about banks? They'll pick on banks for a second. Most clients, if you go do you love your bank? Go? Yeah, I love my bank. What are you getting on your

cash and your savings? And most of them are getting almost zero yet to think can turn around and get you know, let's sake nineteen of the Fed funds rate. I said, can you imagine if they were crediting you that and at the end of the year they said, hey, we want our fee to be what you made. You know, clients if they were writing that check back would go crazy. But because they never see it, it's a huge hidden drag on their performance that they really don't consciously think about.

And that's one of the things we want our clients to think of, every single penny of they're paying, how they're paying it. And and we you know, and I know we're big planners. You know, people will make an investment in their future, but no one wants to pay something and not see value beyond a doubt for the investment we're asking them to make. And I think cash

is a great example of that. You know. I want to follow up with what you're saying with the issue of free trading, and let me point out neither of us have a horse in this race. If trading is eight dollars, or of trading is free, it's essentially the same thing as far as I'm concerned with the average portfolio size. However, when you look below the surface of all the companies offering free trading, that cost of carry, that return on cash is where they make all their money.

And it turns out free trading, when you look at the numbers, is pretty expensive. Bury and then you've got order flow payment and invisible tax that you know, consumers don't see. Like I said, there's a lot I think we can still do as a profession to become even more consumer friendly, you know, than we are today. I don't disagree at all. Let's talk a little bit about your coaching business. What is Carson Coaching? So Barry and

and I guessaid. I started a retail in nineteen eighty three and nineteen ninety three I was giving a talk in Boston at the organization at the time called the i a f P. I don't remember that, International Association of Financial Planners. And I was talking about the different things I was doing in my business, and two gentlemen came up and said, hey, we do coach us. And I said sure, And that's how my coaching business started.

In in n I launched Carson Coaching UM. I had seven people come out to Omaha, Nebraska and I, you know, and we've and we've had quite a following over the years. I mean, we have around twelve hundred offices today that we provide UM consulting services and coaching services to. We have tens of thousands of alumni. People that coming in out of there will be in our program for a year or two, come back out, come back in again.

And a lot of a lot of independent advisors are they feel like they're isolated islands out there, and they really want to have community. They want to have best practices, They want to have places that they can bounce ideas off of. You know, today we have I think we have eleven executive business coaches, just specialized in a variety of different areas and uh and and I have learned a ton from having our coaching organization. Always like to say, you know, we're better together. None of us is as

smart individually as we are collectively. And just this group has pushed me to get better. I've learned so much from them. But it's really a cool community that's all committed to continuous improvement. Quite interesting. When I was kicking around your website, I came across a page of Carson Group Partners. Are those folks affiliated with Carson Coaching? Are they affiliated with Carson Wealth? And by the way, that page was just scrolling scrollings. It's hundreds of people along.

So coaching is different than partners. So we have our sert, so we have our retail, we have our coaching, and then we have Carson Group Partners and what I learned through the coaching business, Barry and you, I think you appreciate this as many years you've been around being a mentor to people, either directly or indirectly. Is that old thing you can lead a horse to water, but you can't make them drink. Is you can give them all

the ideas but very few people. I used to get questions all the time, like Ron, how can you give everybody your secrets? I said, well, first of all, I want a profession to be better, and I believe it's us against the evil empire out there, the conflicted model. But number two, most of them won't do anything with it, and it's not a real competitive threat. And that's why Partners was launched in twelve. Is a lot of these clients of ours that say, can't you do it for us?

So then we evolved into a model today where we are a succession Solutions. So a lot of these firms have become Carson. We bottom, or we own a minority or we own a majority. We are very flexible, but we do their technology, we do their trading, we do their compliance, do their marketing, We do everything, with the exception of actually sitting down and meeting with the client.

We have CPS, we have attorneys on our team. We have a trust department, I mean, we have insurance department where we can provide all of that in one single pain of think of an Amazon experience. And most of the smaller independent advisors can't begin. They're so stuck in the whirlwind of trying to run their business day to day they can't really emerge and then think creatively and proactively. And that's really what Carson Partners does for them, and

we do it together. It's bottoms up innovation. They come up with some amazing things that that's what we implement into the model. But we also I date top down because there's a lot of none of us knew the iPhone was possible until Steve Jobs came up with it. Right now, we all love it, can't imagine a world without it. So we've also ideated stuff that they're going, wow, I didn't even know this was possible, and it's it's been really an exciting partnership with our partners around the country.

So this is a TAMP. This is a full turnkeysset management program. Is that right? It is correct? Yes, and a Camp, Mary, it's it's everything else. I mean literally, we will right there RFP, we will present to an endowment, our foundation. It's not like, oh, they have access. Our team in Omaha is their team. And if you go to our partner's website you'll see that. You know, a lot of them are branded Carson. Some of them continue to go under their own brand, but it's you know,

a lot. I think of its Tampa providing just asset management. That's one of ten services we provide to our partner offices. Quite intriguing, how many different offices are you working with with Carson Partners, Because it looked like, right now I have a hundred and thirty five offices. Yeah. Did you ever expect coaching and partnership to develop into two completely

different businesses from financial planning? Obviously related, but totally different aspects of the business, Verry, No, And I never expected the success I've had. I mean, I've throwned myself with really great people and it's really their success that has allowed this to happen. And No, I never dreamt in a million years that you know, we would be doing

what we're doing. And and because of that, you know, and group is really focused on impact, you know, local impact, community impact, national impact, global impact, and we spend you know, considerable amount or I said they spend. We make big investments. You know, my wife and I make big investments into

our communities, and so does Carson. And and I can't say I can't talk about our success without talking about what I feel are are Our personal obligation is is to you know, to lift people up that that struggle. And you know, I think when I got started in the eighties, um, you if you worked hard, you could go out and you could make it. And there's parts of the world today, and especially there's even parts here in the US it's really hard, you know, to emerge.

And so you know, with that success comes, uh, I think an obligation that we've been braked, you know, to have as big an impact on our community as we possibly can. Quite fascinating. So the future of the asset management industry. You talked earlier about technology and how challenging that is. How has technology changed the landscape currently and what does this mean going forward? So Barry, I go

to a place called Singularity University. I've done it for the last two years and it's out in Palo Alto and it's Peter Diamantes and Frank Kurzweil and you know, just people that are talking about the things that are that are coming. And Frank made a comment two years ago, he goes, you know, the technological changes nothing up to this point. It's been a trickle and the avalanche is near.

And I share that view. I am seeing what's going on with artificial intelligence, with data um and I see a world where a lot of this is controversial, right, I mean when you when you you know, for example, I have three children, my sons non on social media, hate Google and and because they you know, they read our email. And I'm on the opposite end of it. It's like, I love it. Get to know me as well as you can know me and help me, help make my life easier. So I understand the listeners are

gonna fall in one of those categories. Probably most of them falls somewhere in between. And so we made big investments at Carson last year and the year before into what's known as a data warehouse. So we have all our data. We have very clean data. And the other thing that's cool about that is we call we used to say that we have a high degree of i Q. And that's implementation quotation, because when it's all said and done, more gets said than gets done almost in every business.

But now at a Q as well, And that's adaptability quotation because none of us can possibly anticipate all the amazing technologies are going to emerge out of the garage, so to speak. And and so if if you are in the old traditional way of having technology, if you were going to switch from you know, one application to another, it was a major migration. I mean it was a big deal to make the switch. Well, now at Carson Group,

we've got a data warehouse. All we have to do is consider what's known as an a P I not think the two technicals listeners, but think of a think of it just plugging in a hose and all that information could float any application that we want, and we can switch out an application overnight. And I'll use Amazon as an example. You're an Amazon user, right, Barry for twenty something years already. And how the experience overall, I

would you rate at scale of one to five? Pretty rare that it's not a five each time every time? And and and Barry tell me that from the time you started using Amazon to today. How many different technologies were swapped out behind the scenes that you weren't even aware of. Oh god, it's got to be countless biggest of all Amazon web services. Look at how they took their own infrastructure, empowered so many others. So to me, it's just a web interface, but there has to be

a ba jillion things going on behind the scenes. And you don't even care, right if you could care us you just want to have a great experience, right to go on. It works, It just works, That's all you care about. That's the future financial services. You know, what we believe is we've built this single pane of glass for the consumer to have everything they want. Like Amazon is super simple to use and to see and to interact,

and that is that is the future. But you better have great data because I believe the risk always has been, always will be as far as ruining someone's financial plan. Is a consumer doing the wrong thing at the wrong time. Why do they do that? Because they get caught up in noise and and everything going on, and they make really poor knee jerk reaction kind of moved. For example, it's talking about Donald Trump. You know how many people wanted to just go to cash. Before Trump got elected

in the market had a major run up. Many people went to cash in the middle of COVID because it said the world can never recover from this, or at least since for the next several years, when in fact, if they would have just had the risk budget right. And then taking technology a step further, we get to know when a client's blogging on what's going on in their life, what is they're reading, and we can anticipate now moves that they're gonna make that might be counter

to what's in their best interests. We can get out ahead of it, we can have a meeting with them, we can talk about it. And this is just a very very beginning. I saw, I saw a technology. I spoke at tibern last year in New York and I talked about the future of artificial intelligence, and a lady comes up to me and says, I'm developing that. You got to see it. And I brought this back to my team and they're like, well, we don't think anybody's

that close. They did a demo for Usberry. We were asking this engine financial planning questions and it was giving us answers, and we thought we were talking to another person on the other end. It was that good. And this stuff is going to continue to get better and better. Just imagine today if I if we sit down the client,

we got lots of technologies. It used to take me a weekend really to get ready for a big client and review and all the things we needed to do and talking to their tax profession finals and their attorney and their insurance agent. Now all of that stuff is set in and we can be ready and have a

really productive meeting in an hour. But the future is all of this stuff tacked legal risk, cash flow, all of that's going to be looked at twenty four hours a day, three in or sixty five days a year, and there's gonna be alpha actions that can be generated

because of the technology. That's the future of financial services and it will be mind blowing the kind of value we can we can add and and the consumer is being expected to They want an Amazon and Netflix, a Google kind of experience, and that's what we're going to have to deliver. I don't think each you know, financial advisors look at each other as their competition. It's really those experiences that we're going to continuously be compared against

and compete against in the future. So when the first sets of the various automated advisors rolled out, people call them robo advisors, but I think that's a bad moniker. But shops like Betterment and Wealth Front, there was a general backlash, Oh, this can never do what an advisor can do. Do you think that eventually we'll get to the point where hey, ubers will be self driving cars and financial advice will be some bot telling you what is best for your financial circumstances. I think it's going

to be a combination. So my view very it's technology, it's a higher end where there's more complex needs. Is not to replace the financial advisor, but it's gonna enrich the experience for both the advisor and the consumer and allow us to do a much much better job anticipating somebody's needs before they even know they have them. It's the lower end. I think there are people that in today. I mean I went and signed up for all of those and they you know, they just there wasn't a

lot of substance there. There wasn't a lot of of of wow that was really really good or you really how me? But I think it's a place to get started. I think the future is going to allow people to migrate start there, move up to a hybrid experience as their complexity grows, eventually have a full on traditional kind of relationship. But sometimes a client considers that higher traditional light relationship. There's not a lot of changes, there's not like going on, and then they go, do I really

want to pay act for this? And today the only choice they have is to fire their advisor or to have an uncomfortable conversation about reducing their fees. Under this, I think future model, they'll be able to ratchet down to a different service offering without them to go through, you know, liquidating and all the tax ramifications, all the friction,

even the big and astriction to come with that. And but I think technology is going to give consumers a lot more choices and a lot easier way to measure. Am I getting the value for the investment that I'm being asked to make in a form of a asset management fee or financial planning fee or a retainer fee? Really interesting? You alluded to something earlier that I have

to follow up on. What you talked about a lack of young people in the industry and a number of people retiring, but I want to go a step beyond that and ask you let's let's throw this out in three parts. The first part is how do we get more people interested in financial planning? Secondly, how do we get more women interested in the field? And third how do we bring more people of color into the field.

So we're announcing a major diversity and inclusion and next gen initiative at Carson Bury because I think you know, as a profession we've all sat around and waited for someone else to do it, and and we we've been experimenting at Carson with an intern to higher program where we've gone into colleges and at interns and we really interview them as though they're going to come to work for us, and we do offer them a job at the end if they perform well and they want to.

We asked them to interview us at the same level. But we're we are We're building an office campus here in Omaha. We have Carson University today, so we do a lot of teaching and get young people interested, but we're gonna take that to a whole new level. Um. The other is I mean of people of color, I mean you you it's been a why it's been you and I. Right, it's been you and I in this profession forever, and it's still I still scratch my head and go, why why have we not been more successful?

Because it's people think it's a sales job. It's not. There's so many you know, there's there's so many different tracks that you can take. And by the way, you gotta you got a huge till one behind you. Guys, we have you know, more than half of who's in it today. It's gonna be gone, They're gonna be retired.

And there's more people over the age of eighty in our profession today buried than under the age of thirties, right, And and so we at Carson are going to take a major lead in this, and we're gonna put real money behind it. But I think it's it's um not only bringing people in and training them, but letting them know, here's what your career path can look like, and here's one of five different paths that you can take to

be successful. So I think it really is going to come with in the trenches education and uh and where I guess that we've been working on this UM for you know, a good six eight months now, and we're we're going to be announcing I think a really exciting initiative around this in the next in the next few weeks there. So you're you're timing on that is really good. Let me stick with the idea of all these over eighty, over seventy, over sixty five year old advisors that are thinking,

I think you described them as as rich and tired. Um, are they going to retire? Are they going to hand off their business to somebody junior? Are they going to sell it? What does the and it's a barbell, I think it's like thirty or of the profession is over sixty, maybe even more than that. What are those folks gonna do with their practices, with their businesses? It depends on the advisor. So there's really three different flavors out there. You've got the advisor who has next Gin people there

they can't afford to buy in. And this is where we've been successful in helping the next Gin actually buy out the founder. Our Chicago office is booming, and this was, you know a great example of it was a c P A firm. The founder of the firm was like, I love my clients. I want to take care of my clients. But they but I'm not gonna give my business away, so we're able to cut in and finance them buying out the next next generation. So that's one model.

The other model is you've got some of the same people that retire, but they're not They don't tell their clients they retired. And what I mean by that is, yeah, they're just you know, they're working a few last hours every every year on a daily basis, or playing more golf, more time with the grand children. They're not really bringing anything to science. And if they lose the client or client passes on, they're not really that aggressive about going

out of the next year. And the problem with that is they're not making huge investments, you know, into the into the next you know, into really what it takes to stay competitive, you know, in the field. And then there's a third bucket and they just they want to exit the business like I don't really care about the next gen and I don't care about my clients. I want to get the highest check possible um. And we see all three of those, you know going on today.

Of course, we we focused on the next gin, someone that really cares. We did a deal recently and um, the office was in Vermont, and you know this guy, you know, we are never the highest price, you know, payer was. We're really looking for alignment of interest and and we really want the founder to stick around and make sure that it's going to be a super smooth transition.

And this guy man the due diligence and the way it's like, if I can have a hundred of these, I do a hundred of them, you know, every year, and it's been it's been a super easy transition. He's happy as clients are happy. And he's now, as he will say, entering the third chapter, you know, of his life. So let's talk about that space a little bit because I'm intrigued by it. We get people offering us firms to be sold all the time, and we're not in the business of buying firms. How do you go about

finding these businesses? Do you self finance them? And what do you think about the role of private equity in the roll up slash acquisition space? So, I know, let me just be clear cars that we're building a hundred year firm. You know, I started in eighty three. We're building this new building, and I said, you know, I want to have shirts for everybody. When we move in. At the picture of the building, it says for the next hundred years, because we're we're not building it to

sell it, but a lot of people are. And that's where private equity is. Actually he stepped in and we have a small minority interest in private equity. I brought him in. I plan on keeping control um as long as I'm adding value to the business. I've got two generations of succession. I've got my my next succession you know, already done. Private Equity has been fantastic for coming in and helping us professionalize the firm early on. They gave us an m and a strategy that we didn't have before.

But I think, you know, private equity is like a mutual fund, Barry. They come in so many different flavors summer in. So how can we how can we change? How can we financial engineer you to get you the highest price and get the heck out. That's a totally

different relationship. And when I did the deal with Private Equity, I knew I was looking for some um know how intellectual capital, and I took a much much lower price, but I also got really patient um capital that was willing to give us, you know, pretty much full control on how we run, how we on our business. So really, I think it depends on the type of private equity. So when you I'm I'm talking generally, so you can get as specific and detailed or thirty thousand foot view

as you prefer. When you're looking to do a deal with someone in Vermont or someone in Chicago or wherever they happen to be, is that something that you're funding with private equity dollars? Is it something you drive yourself? What does that deal look like? Is it a buyout? Is it an turn out? Because I've seen a million variations, a ton of different flavors, and I want to hone in on exactly how you guys go about it. Yeah,

so very up to this point. So the private equity money we took with to build all the tech infrastructure that I talked about because it wasn't available, you know, without our profession. We've been fortunate up to this point. We've been able to self fund all of these. But

we're getting to a point. Matter of fact, I had a team with my leader meeting with the leadership group this morning that you know, we're getting enough additional deal to look at that, we're probably gonna have to, you know, either you know, raise a little more um so a little equity or raise cash or we we don't have any debt as an organization and maybe take a modest amount of debt you know, potentially onto the balance sheet. As far as terms go, it depends on the seller

um are. Our preferred deal is to have a minority interest and to have the next have us finance the next gin. As far as buying a h of a firm and then leaving, that's really not that not what we want to do. And if we do do that, it's going to be on an earnout basis because if they're not gonna stick around, they're not going to take care of the clients. We're not going to take the risk on it. And the most important thing very and all of these deals is culture. Is there a cultural alignment?

We are We probably look at eight deals and do one and and the reason we don't do the other seven as there's not a cultural to it. Hey, guys, make a quick comment back on the retirement peace with your wife and this is for everybody out there. You know, I love to say that you know, most of the society is on this unconscious journey to arrive at death safely.

And what I mean by that is, you know, we get into this routine where it's just we live life, and days and weeks and months and years go by, and then all of a sudden, it's all bias and we're like, you know, where did that go? And did I accomplish what I wanted to accomplish? And I teach a thing in my coaching program called blueprinting live your life by design, not by default, And I think most everybody can work their way into that kind of life

with a conscious effort. One of my favorite all time books as an employon Hill You'll Think and Grow Rich, And it's and we're in a in a profession where you know, people want to get to a retirement, which I hate that term, like I'm gonna do all this and all this time doing things I don't love to do. So I get to spend a little bit of time during the thing I love to do when I'm the oldest and I'm not as healthy as I can be. So I challenge people to say, you know, if you

start moving in that direction, you can't change it. Overnight, but you can get there a lot faster than you think. And just to accept this is my life. I don't love it, but I don't hate it. That's that unconscious journey you know, to death. Quite interesting today in confirming my priors, I have run Carson on telling me everything that I believe in and me just nodding my head vigorously in in a sense. Um. So so let me ask you a question you you referenced earlier, UM, that

you don't usually use debt. Let's talk about a subject that's a little controversial, the Paycheck Protection Program. I know your firm participating in this, my firm participating in it. Tell us where you are with your p P P loan and I'll do the veal on ours also. Yeah, so Barry, when this so well? We also have another business. It's an events business that UM really for financial advisors.

We've been doing this for going back to nine three and we had a we had a we had an event we canceled in Vegas hit it hit our company to the tune of four million, almost four million dollars UM. We had eighty other events that we canceled around the country, and we have we have a lot of people that work on the events business and there was nothing to do. And so you know when we when we looked at our Carson Group, are r A doesn't need it, right, but our events business needed it when we have a

transformation business that needed it. And we also were building technology and you know, just with the uncertainty around at one point, you know, our A U M had quite the depth as everybody's did. And we're like, we're gonna you know, before the paycheck paycheck protection program came out, Um, we were gonna have to lay off you know, a fair number of people and we probably would have hired them back at some point and and but not yet

this year. And so the whole purpose of that program, as the government said, was to keep people employed that we otherwise would not have kept employed, you know, through the through the downturn. And you know, there's been a lot of pot shots. There's some gentlemen who have never met back East doesn't know me, doesn't know our business, and he's trying to shame us and to take in it.

And I like, you know, I'd like for you to meet with these families, um that you know, I have have a continue to have a good job, and I want you to tell them why they shouldn't have gotten that benefit. Um, And so we take We took it. We thought it was a good program. By the way, we helped a lot of our our business owner clients. I think Nebraska at least at one point had the high UH success rate relative to our population of anybody.

And we had a big hand in that because, you know, Jamie Hopkins, who works at Carson, really was on top of the care's act and really had all of our advisors very well educated on it. You know, the second there's action could actually be taken. And that's you know, indirectly what I was talking about earlier, being super proactive, you know, with our with our relationships, thinking about things that you know a lot of people aren't thinking about.

I could tell pretty much the exact same story about the non advisor related businesses and our our thought process, my thought process, and this has evolved. Yeah, and this is the pot shots where oh, you're taking money from somebody else. And again I want to know the people taking the shots. Why is one family's employment more important

than another family employment? You know, that's really what they're saying, is we we want to pick and choose, you know, the fan, the fan and all these are people making us in a hundred thousand dollars a year rules rule, those are rules. We are faced with another dilemma this fall. We have, UM, we have you know how this works. We contractually committed for a large conference, the Falling Omaha. We've got five hundred hotel rooms that were on the

hook for because social distancing. We don't have enough room to bring people in and actually to consume all those rooms. So guess who gets to write a check for that. It's amazing to think that. And it's that's before this the second wave comes in. What we're dealing with today, and especially along the Sun Belt has been a spike in infections that's still part of that first wave. This is this isn't even the second wave. I don't think this thing is done by any threat of the imagination,

you know, I think it could. I think it should have been anibled a lot differently. I think we should have quarantined those that were high risk that you know, to put to do what we did to our economy, you know, And of course you know Monday marking, Monday morning quarterbacking is great. UM, and and hey, our leaders, this was an unknown you know, we still don't know, you know, the full ramifications of the of how this

will impact our society for many years to come. If you look at places like Germany and Switzerland and New Zealand's, they seem to have come up with the right balance that were very aggressive, not only with quarantining but with testing and contact tracing, and our numbers are still you know, not going down the way they should. At least the mortality rate has improved. The number of people who are dying from this is you know, it's ticking up more

slowly than it was. It's not accelerating, but it certainly seems like more and more people continue to get infected every day, especially if you back out the early states, back out Washington State, New York, Connecticut, New Jersey. The rest of the country ain't looking so hot these days. I agree. I mean, we've been fortunate in Nebraska, um and you know, we got I still go up to our family's farm pretty much every weekend, and the whole

county up there has five cases. I mean, then you've got to drive, you know, two miles to see another person. So it's been nice having yeah, we've been. We we social distance our whole lives. When we're up there, we don't even know what we were doing. That's right. But before we get to us being around, there's a couple of questions I missed during the broadcast portion that I have to ask you, one of which is what's a day in the life of Ron Carson looked like, how

do you spend your time? Every day? So? I get up super early. I typically, UM, get up somewhere between four and four thirty in the morning. UM. I love my morning coffee. So I get my car, put the dogs, get my coffee, I catch I read. I love to read. I read, I think, I meditate, I do a little bit of breathwork, um, and then I work out, um. And then I move into you know, I've got meetings, um. You know pretty much you know, throughout throughout the day, um,

and then the evening is. I'm so lucky. I have my kids. I have one daughter lives five minutes north of me, and other daughter that lives four minutes west of me. I have a grandchild. I have another one on the way. It's got a son who just graduated, who lives about fifteen minutes east of it, and so you know, we're spending time with family and uh and and I normally sound asleep by ten o'clock at night, So it's uh and I and I gotta tell you

I love you know. I've got my life to where I get to spend my life doing things I love to do very versus the things I have to do. And I can just hear it in your voice. I mean, you're you're a man of passion and uh and it's just you know, it's it's I get out every day, um, with a ton of enthusiasm and I people, hey, do you start getting the snooze button and you hit up more than twice, something's wrong. You've got cancer developing on

your enthusiasm. So, you know, reorganize your life and your day to where you can't wait to get out of bed and and get started with today. I totally agree. And I'm gonna horrify you a little bit, snooze button. If you're still using an alarm clock, you need to change your lifestyle. But that's a whole nother conversation. Um the phone metaphorically of my alarm plots, my iPhones. Yeah, I'm fond of saying this podcast is the most fun I have a week. But it's a pretty high steady steak.

This is this is just the peak of it. Um. And speaking of podcasts, tell me about the Framework podcast. Is this a new venture for you guys? What are you doing with that? It is brand new. Jamie Hopkins Um who joined us you know about a year and a half Agou is running that and very there's so many podcasts out there that it's like, oh my gosh, is a really room for another podcast. And he's done such a great uh job with it. You know, he's

had really an eclectic group. We just had Ashton Kutcher on who um genie and I got to know Ashton Amila through um our. We belong to a thing called the Reserve out in Napa Valley and his technology knowledge and they're very much philanthropist. We had just had them on talking about Thorn, you know, their their company and technology about you know, stopping you know, child sex trafficking.

But then also he's a tech genius. And then all the way over to Tyrone Ross you know, very successful um you know advisor and he like and I'm listening to podcasts, I'm going man, I learned some stuff I didn't know and uh, and it's and he had his you know, Jamie was playing with Michael Felt and had his his coach on and and I learned something there. It's like they never took a day off for five years in training, where everybody says, oh, you need to

take time off to rest. So it's YEA framework has been awesome. It's not around financial services, it's around interesting topics. And Jamie's getting getting a pretty decent following fairly fast with it. I love that. I love that. And then the last thing I want to ask you before we get to the speed round is about your philanthropic efforts. I know you and your wife have a number of different projects underway. Tell us what you do when you

want to spread some some happiness and some inspiration for people. Yeah, so we decided early on that we were going to leave our kids much money. I've seen just the flip side of that and how awful it can be. And by the way our kids have celebrated it and with pride, you know, they know they're gonna I'll take a quote from Warren Buffett, We're gonna give our kids enough they can do anything. But not so much. They can do nothing,

and the rest is going to our charitable foundation. And Jeanie and I are like, well, let's be giving it away while we're alive. And we started a foundation called dream Weaver where we do end of life dreams for the terminate, ill, financially unfortunate elderly. That's been tremendous. We were now funding some projects in the Dominican Republic around coral restoration. Anybody that wants to know more about coral,

there's a great Netflix documentary called Chasing Coral. But it's a crisis and our ability to feed the world Carson. We have UM three schools in Africa that we're feeding, We're help We're involved with Scott Harrison's charity water UM. We're giving you know, over twelve hundred people a day, you know, fresh water from from Will's well. As we've

driven but we're just getting started Bury. I mean, we as an organization UM really want to have impact and and we're looking for more and more ways, you know, to to help people. And I personally believe private enterprise can do a much better job than the government can, you know, and figuring out who needs it and being very efficient and trying to deliver your needs. UM for causes that that can can very efficiently invested. Quite interesting,

So let's jump to our speed rounds. Although we should feel no time pressure. You can answer these um as quickly or not as you like. You mentioned that Netflix documentary about Coral. What are you streaming these days? Give us your favorite Netflix or Amazon Prime Video? What are you podcasting, listening to, etcetera. I love Joe Rogan, so I listened to this podcast all the time with our kids being out of the house. Janie and I we just got through watching the Michael Jordan's The Last Dance.

That would be fantastic and we're good, um Avid readers, and I'm reading UM The Tattoo Us of Auschwitz, which is really really good right now Essentialism, which is another great book UH that I love and UM and I I spent a lot of time going on walks and heights. I think most high functioning creative people can can gain a lot by just going and not having anything, just letting your mind go to wherever it goes. Then, UM,

Carson Partners was actually born on a hike. I'm trying to summit all of the fourteen thousand foot peaks in the US Berry and a lot of them I've done alone. I've been fifty seven. I have twelve left. I got to get a knee replacement before I can finish out. But some of my best ideas have come on these, on these, you know, several day mountain expeditions. You know that I've gone on. You've done fifty seven fourteen thousand foot peaks. Is that what I heard you say? And

it only cost you one knee? That's a fair trade. Well cost me both, but I got to get the other one fixed soon. Here COVID I supposed to haven't done in March, but COVID hit and that didn't happen. So let's talk about your mentors, who influenced your career, who helped make you into the run. Carson, we know today my mom and dad, My mom um growing up, My dad, hard worker, hard farmer, farmer. My mom though she was Ronnie, you can do anything you want to do.

I mean, this is being a kid. She had me convinced if I wanted to be the President United States, that was gonna be it. And and uh, and she encouraged me on any any businesses that I ever wanted to do or start, and she was my partner. UM A lot of times she's passed away, um five years ago Mother's Day. And then I, um, I got to know a warm buffet here in town back when I was a business editor and and his nephew was in a YPO forum with me, and you know, just his

his you know, wisdom and advice. And and then there's a gentleman here in Omaha, you know, self made billion billionaire, you know Howard Hawks who really started as business later in life. UM, just really gave me a lot of great advice growing up, uh in the business. And but ultimately it's my partners too, in my my coaching group. I mean you, if you have an open mind and you take the philosophy that you know, the older I get,

the less I know. And I don't defend what I know and what I'm comfortable with, but embrace the unknown. You will learn something new every single day of your life. And a lot of it's very useful. I call it custal cool and useful information. Custal information. UM, as long as you don't think you've arrived or you've figured it all out. I love that there's a poster with an eight scratching his head. It's as soon as I figured out the answer, as they changed all the questions. And

that's so true. You know that, Uh, the questions are changing rapidly. So one of these days I'm going to have to lean on a favor and and my collection of podcasts will be incomplete until I get Warren Buffett under or Charlie Manger under my belt. I don't suspect that's gonna happen anytime soon, given the lockdown. I think I sent them a snail mail about five years ago and I never heard back from them, but it was still early days. I should probably follow up again. You

mentioned a couple of books earlier that you're reading. Now, what about books you recommend to people who say, Hey, I want to learn more about investing, finance, the economy. What books do you recommend for those people? You know, I really have never read any of those books, very attentive because and here's here's why. I mean, I've read I've read a handful of them, but I'm a little different in my beliefs, and that is this is that most people are trying to find a silver bullet of

investing and they're just it doesn't exist. And and the silver bullet is is that if you stick to a plan and you get your risk budget right, you can be successful with deep value. You can be successful with momentum growth. You can be successful with passive you can

be successful EPs with mutual funds. But as soon as you start reading this book, and then you read that book, and then you get distracted and you think that you've got something that's a black box, I mean, trying to happen, to have it happened in a hurry berry just doesn't happen. And my nearly forty years in this business, the clients that have followed a plan not gotten emotional. They got more wealth and they could possibly spent in ten lifetimes.

But I've had those clients that are always chasing the hot dot, or they read this or that book. I mean, I liked um Unexpected Returns um uh, you know the Value Investor UM. I mean, I've probably read you know, twenty books over the years, but I really hesitate to give a book to say this is this is really what you which, which you really ought to follow, because it's the consumer behavior that's gonna drive their success, not what the market does or when not not, what investment

philosophy they have. So just recommend think being fast and Slow by Danny Kahneman and that'll scare them off everything else. Um. So, so what sort of advice would you give to a recent college grad who came to you and said, Hey, I'm thinking about a career in finance. What would you tell them? I had this conversation yesterday, and I try to have them, um any day I can, because I'm lated and I have kids reach out to me all the time, and I tell them this is the the

best time to get into financial service. I said, you don't realize that, but you've won five powerballs And they're like, what are you talking about? And I said, well, let's just let's just count them up here. First of all, you're a mammal. Do you know what the odds are

for you to be a mammal? And then you're a human, And then you're in the United States of America and financial services if you choose at the most disruptive time possible, every single relationship is in play because consumers are starting to look and say, am I getting a return on the investment I'm making? And I and I and I give them the stat that we're going to have a huge capacity issue because we're don't we don't have enough financial advisor. And it couldn't be a more powerful, powerful

hill win. But do it right. Don't go to the wires, don't go to the brokers. Go find an r I A that really is mission focused, that's not building it to sell it. That is really about being a consumer advocate, and you will do incredibly well. And by the way, when you prove your worth, negotiate a way to participate in equity. You know, in that way. That way you

won't have to make it. Don't don't move around a lot, You'll find a place, stick with it, and and don't be afraid to ask, you know, for equity at some point, you know, in the in your relationship. Good answer. And now our final question, what do you know about the world of investing today that you wish you knew back when you were first getting started. I wish I knew my own advice because early on I was doing commodity sutures.

I mean, this is the stuff I was doing on my own account, Barry, And I mean I actually had cattle delivered to me, you know, I never realized that a paper contract could turn into real cattle. And I went through that. Um I if someone would have said, run American businesses are like a yo yo going up a flight of stairs. You know, the market kind of fluctuate, you know, short term. I love what Buffett says. He says, our markets are capital relocation centers. They relocate well from

me in patient to the patient. And I and my own take on that is they relocate well from those that have a plan from those that don't have a plan. And I wish earlier I would have figured that out for myself so I could then apply that to clients and uh and investor behavior will dictate your success, not what the market does, because you know, Barry, there's always that to make money regardless of what's going on in the market. Thanks Ron for being so generous with your time.

We have been speaking with Ron Carson, founder and CEO of the Carson Group. If you enjoy this conversation, well be sure to look up an incher down an inch on Apple iTunes and you could see any of the previous three D plus conversations we've done over the past. Wow, six years, that's a long time. You can also find us at any of your favorite podcast hosts, Spotify, Overcast, Stitcher,

wherever finer podcasts are sold. You can check out my weekly column on Bloomberg dot com slash Opinion, follow me on Twitter at rit Halts, sign up for our daily reads at rit Halts dot com. I would be remiss if I did not thank the crack staff that helps put this conversation together each week. Michael Boyle is my producer. Maroufle is our audio engineer. Michael pat Nick is my head of research. Attica Valve Run is our project manage Here.

I'm Barry Hults. You've been listening to Masters in Business on Bloomberg Radio