Smarter Tech Stack Optimization: Wealthcare Financial Group

Martin A. Smith’s career path as a financial advisor is more than just a job: it’s a life-calling. With this passion as a focal point, he has built a practice that serves a diverse range of clients by age, ethnicity, race, and profession. He’s built a high caliber client base including business owners, entertainment professionals, and non-profit organizations.

As an African American investment professional, he is aware of the need to address the challenge of financial literacy within communities of color. He is also passionate about helping to close the “racial wealth gap” resulting from historical legacies of institutional racism. Martin views the importance of education, engaging in the political process, financial literacy and multigenerational wealth-building as a vehicle for personal advancement in society. 

“After graduating from Howard University and working for a nonprofit in Washington, D.C. I thought I would go into politics,” explains Smith. “My experiences gave me a heart for understanding the needs of people, particularly African Americans and Latinos, who have been underserved by the financial industry.”

He elaborates that today, African Americans are for the most part first or second generation investors due to not having adequate representation within the finance industry. 

“As an example, I was the second person in my family to own any mutual funds,” he says. My mother was the first as she started investing in her employer-sponsored retirement plan when she was in her mid 40’s. 

“Despite these hurdles, African Americans’ participation in the stock market has grown considerably within the past 10 to 15 years,” Smith elaborates.

Smith has devoted his career to embodying the change he wants to see in the world. So he became a financial advisor and started Wealthcare Financial Group, Inc. in 2003. 

“Early in my career, a friend read an article I wrote and said that I have a knack for encouraging people,” says Smith. “They suggested that I go become a financial planner.”

Introducing Wealthcare Financial Group

Based in Peachtree City, Georgia, Wealthcare Financial Group is a firm that specializes in custom-tailored wealth management strategies. Advisors’ recommendations come from a firm understanding of the practical challenges that families face today.

“We are not afraid to challenge conventional wisdom in our approach to investing and preserving wealth,” explains the firm’s website.

Smith built his practice, brick by brick, from the ground up. His entrepreneurial days began in 1994, before he began obtaining his financial planning certifications. 

“I started with a small firm with mutual funds and life insurance,” he says. “I was replacing predatory life insurance that was sold in poor neighborhoods throughout Washington, D.C.. I’m talking about single mothers with maybe 3 or 4 kids who have anywhere from $1,000 to $10,000 of coverage, who were told that her policy is a savings.”

“I would go to them and say, ‘okay you’re spending $300 a month for this. We’re going to give you a $150,000, 20-year term insurance policy for $100. Then, we’re going to put $25/month towards your kids’ college and invest the rest into mutual funds.’”

Over five years, Smith grew his practice of helping low income individuals and families, to 300 clients around Southeast and Northeast Washington, D.C. and roughly $110,000 AUM.

“Educating low income individuals about investing became my personal crusade,” Martin says. “I was on a mission to improve the financial lives of people, most African Americans who grew up in poverty and did not know anyone within their families who had ever owned a mutual fund. Therefore, the individuals and families that I helped were first generation investors for their families.”

I really liked what I was doing,” he says. “So I started learning about Portfolio Theory and economic cycles. I went from opening $25 accounts to $500 accounts and then eventually $25,000 and $100,000. From there, I joined A.G. Edwards & Sons, where I gathered $17M in three years by continuing on a path of helping my clients’ properly diversify their portfolios. After, I went to Merrill Lynch for some time before going independent.”

Martin believes in creating opportunities for future generations. His firm employs 7 people in total  — Smith, four financial advisors, and two life & health insurance agents. He strives to mentor and open career doors for people seeking to advance meaningfully, in life.

“Historically, brokerage firms did a poor job of recruiting and hiring African Americans as financial advisors, says Smith. “Thankfully, broker/dealers have made improvements in diversity hiring, but much of these changes have been within the last 20 to 30 years. The presence of African American financial advisors was fairly low, if not absent among many brokerage firms leading up to the early 1990’s.”

“I believe the poor representation of African Americans and Latinos in the brokerage industry was influenced by the perception of Black people not having direct access to a professional network (or family) of high net worth individuals, by which we could rely on, as support for a new career as a financial advisor.” 

In addition to creating opportunities for employment and mentorship, Martin is continually expanding his education and reintegrating this knowledge back into the Wealthcare Financial business. The firm currently has $30M+ under management.

With Growth Comes a Need for an Optimal Tech Stack

Martin strives to be ahead of the curve when making decisions regarding his clients’ investments given the level of trust placed in Wealthcare’s business. In making decisions, his team accounts for real-time macro-level risks rather than relying on benchmark data. This holistic approach translates into tangible, meaningful results with respect to promises delivered to clients.

Technology is what enables Martin to give clients the attention that they deserve.

“In October 2021, I rebalanced all of our clients’ portfolios to a ‘defensive’ allocation, based on my outlook for the economy in 2022. As a result, we have been able to outperform the Dow and S&P 500 by a significant margin,” Smith explains.

 “I did the same at the start of the pandemic. We went defensive on February 25, 2020 when the Dow was approximately 27,000 points. Our model portfolio consisted of corporate bonds, consumer staples, utilities, treasury inflation protected securities and commodities. As the market fell from 29,000 points to 19,000 our model portfolio increased in value. Subsequently, our assets under management increased as word began to spread by some of our clients to their friends and families. By going defensive early, when the market recovered, the value of our model portfolio grew even more.”

Given this high-precision approach to investing, Martin needs tools that can keep up with his high-caliber intellect, judgment, and methodology. 

“I use technology that is interactive and integrated,” he says. “For example in 2006 I became tired of looking at file cabinets. I decided to go completely digital and by 2007, I had no more files and of course, got a smartphone.”

With this foundation, he started piecing together the ideal solution set and as of 2022, hasn’t stopped looking for optimizations to help his business run better. 

Establishing a Virtual Foundation

Wealthcare’s technology stack is a foundation for the business to operate. Since 2006, Martin has been building systems for orchestration with CircleBlack as a command center for establishing the right foundation.

“My apps speak to each other,” says Martin. “Our CRM speaks to our portfolio reporting and performance reporting software. Both of these systems speak to my retirement planning software, in addition to my video software. Everything is interrelated technology wise.”

This technology stack has helped him run a nimble, 100% virtual operation. 

“If I needed to, although I haven’t done this a lot, I could run my entire business — including compliance — through my phone,” he says. “It would be a bit tedious on my smartphone window with a stylus pen. But if I had to, I could do it. Through the use of apps that are integrated with one another, I have built a practice that is technologically very efficient.”

This foundation for business continuity and mobility gives Martin peace of mind. No matter where he is or what he is doing, he has the ability to provide oversight to the business that he is running.

Streamlining Operational Expenses

Every dollar matters for financial advisory businesses. In building his company’s wealth technology stack, he is careful to ensure that he is not overpaying for features that his team does not need.

“Every six months, I scrutinize the software that I use,” says Martin. “I ask myself what’s working and what’s potentially a waste of money. I also evaluate whether technology is too expensive, in addition to meeting its highest and best use for my practice.”

Prior to implementing CircleBlack in 2022 Martin was using software from a larger company.

“It was very comprehensive,” says Martin. “It had a lot of features — lots of bells and whistles. But I was only using it to run performance reports and billing. It didn’t make sense for me to keep the subscription.”

He discovered CircleBlack in a marketing email and decided to replace his current solution with it. The ultimate judgment call was that CircleBlack made it cost-effective for him to service his smaller accounts.

“There was better reception from my clients when they saw it,” Martin. “The advisors at my firm liked it better. It’s more streamlined and integrates better with all of my different tools. It’s helped me save money, improve efficiency, and get more adoption from clients compared to our prior solution.”

Martin estimates that CircleBlack enables Wealthcare to save approximately $15,000 per year, according to a recent valuation that he conducted for the business.

Relying on Strategic Integrations

One of the integrations that Martin relies upon most often is CircleBlack’s integration with Wealthbox, a popular CRM. Wealthbox’s integration with Riskalyze is especially important for Martin and his clients to get on the same page. With Riskalyze + CircleBlack,  Wealthcare’s investors can get a more accurate view of their risk tolerances.

“For the sake of compliance and accountability, CircleBlack helps me protect my clients as well as my firm”, says Martin. 

It’s about strengthening trust with his clients.

“The people I’ve helped most are those who take my advice and listen well,” he says. “They understand that my approach to portfolio management comes from looking at the economy.”

CircleBlack provides Martin with a data-driven educational foundation to better communicate with investors.

“For example, when I said we’re going to go defensive, they know it’s because I’m looking at economic cycles and event risk,” he says.

Staying Calibrated and Forward-Facing, in Any Market Environment

In addition to helping his firm’s clients build long-term, multigenerational wealth, Martin is laser focused on keeping portfolios stable.

“We are really focused on asset class diversification, looking at economic cycles, and optimizing portfolios based on where the economy is headed,” he says. 

With a foundation built on results and client stability, Martin has been able to sustainably and strategically grow his business. 

Two of his recent endeavors has been a colaberation with his younger brother, Daniel J. Fountenberry, who also happens to be a technology entrepreneur. While brainstorming, the two conceptualized and launched two fintech startups to help close the racial wealth gap: HBCU Legacy, LLC and WealthVillage.

HBCU Legacy, LLC is a digital investment advisor (i.e., “robo-advisor”) serving the investment needs of a global alumni community of historically Black colleges and universities graduates. He was recently granted trademark protection which effectively ensures that no other financial services or investment related firm, — whether virtual or “brick and mortar” — can formally brand a financial or investment related marketing initiative to the HBCU marketplace.

As an entrepreneur, Martin is able to continue stepping into his full potential as a leader, systems-builder, and change catalyst. 

“I’m glad to have found technology that fits me like a custom suit,” says Martin. “Now it’s going to grow with me.”

 

Learn more about CircleBlack

CircleBlack is an all in one management platform for the wealth management industry. You can think of it as an operational dashboard to better connect financial advisors and their clients around a shared perspective. The outcome is better collaboration.

To learn how our software can help you build, manage, and grow your wealth management practice, get in touch to request a demo.

Disclosures
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.