03 Jan Larry Goldstein and Brooke Goldstein, Beverly Hills, CA
We are pleased to bring you the Summit Advisor Spotlight. These interviews aim to learn how advisors have dramatically increased their production through leveraging tools and services provided by Cetera Advisor Networks LLC and Summit Financial Networks.
This edition of Advisor Spotlight features Larry Goldstein and Brooke Goldstein of Brentwood Financial Advisors, located in Los Angeles, CA. They recently sat down with Josh Gomez, Summit’s Sr. Relationship Manager, and Gordon Jahnig, Summit’s Director of Sales Support. We are grateful to Brooke and Larry for taking time out of their busy day to share their insights. Let’s get started.
JG: Good Morning to both of you. Our first question, and I think this is an excellent place to start: tell me how you got into the business and why you chose this industry?
LG: I was in the healthcare industry for over 15 years, managing and running medical group management companies and hospital systems, mostly in behavioral health. That is what got me to California in late 1988, and ultimately, I partnered with a local physician, and together, we built out one of the largest private practice behavioral health companies in Southern California. We were eventually approached by a large venture capital firm and sold that business to John Foster, a venture capitalist who founded and operated NovaCare. Part of the appeal for his acquiring the business was to use and replicate the model we’d built. I stayed on and ran the West Coast operation, and part of my role was traveling around the country, acquiring other practices, and melding them into our model nationally. Eventually, the behavioral group practice model went public in June of 1994. A few years later, I was recruited to another venture capital-based healthcare project that was developing the first integrative medical groups around the country. The plan was for the venture to grow nationally and become a public company, but instead, after 2 years, they chose to become a private company. At that point, I had to figure out what was next for me. We had been making the physicians we had acquired a lot of money over the years, and most of these doctors were unsophisticated with their investments. As a layperson, I had some familiarity with helping people with strategic investing for themselves, so I decided to transition into wealth management.
BG: I was a theater major and graduated college in 2009, so not a great job market. I started interning at an advertising agency in the production department and worked for three different agencies over the course of three and a half years. At that point, I realized I hated it and wanted out, but I didn’t know what my next step would be. So, I asked my dad if I could be his assistant. I told him I’d do all the grunt work; I just needed a job and time to figure out what I wanted to do. My dad made me get licensed, and I started learning about this business and investing. I realized, as a young woman, they don’t teach this to us. There’s no kind of Girls Club for this, or there wasn’t at the time, and I became very passionate about it. That was ten years ago, and I’m still here.
JG: Larry, as someone who came into this business as a “second career” and has already been successful in an unrelated field, can you talk about how you built your wealth management business.
LG: In 1999, I was in my late 40s, making a career change. I joined Paine Webber, starting from scratch with a training class of 20-year-olds. The branch manager said, “I’m not going to treat you differently than anyone else going through the training program, no special favors. If I was going to succeed, it was up to me.” Back then, I heard this phrase frequently if you worked the first few years like you’ve never worked in your life, you could have a business like you could never imagine in your life, and that was my attitude as someone starting late in life. I needed to accelerate everything because I didn’t have the same time frame as someone younger. I had to be the first one in and the last one out every day, Monday to Saturday, and never miss a day.
The second part of it was as I got to meet my peers, our peers in the business, I realized I could do this as well or better than them. I had to figure out how to leverage my time, how I could get in front of more people, show who I am, my background, and my skill set versus my fellow advisors. If I could demonstrate my ability, people would say, gee, I think I want to work with that guy. For me, that meant doing seminars. I would get mailing lists of prospects geographically around our offices. I didn’t have to expand it much because in Los Angeles that’s a lot of people in our general area. We’d cover the hot topics at the time. I’d find wholesalers or money managers to lead and promote the seminar. I wasn’t selling anything but myself. The seminars started with 10, 15, or maybe 20 people; eventually, they were 50, 60, or 70. It took time, but I was able to build credibility, along with name and brand awareness. We would do it every 6-8 weeks consistently, with success.
I am proud of Brooke, and she deserves credit for this because she’s from a different generation than me. However, she has that same first-in, last-out work ethic. Every day is a new day, and it has something to offer.
JG: Now that we know how you got here, let’s talk about your approach to investing/managing client money. There is a whole spectrum of ways you can help clients in this business. Help us understand what you two are doing?
LG: Vegas, baby! We just roll the dice. (laughing)
We don’t have a “model”; we have a process. Our process is that we really get to know our prospects and clients and build a relationship. There needs to be trust and dialogue. It’s personal, and we are trying to find out what truly matters to them and how we can help achieve that goal. We create a financial plan for our clients, and Brooke does a great job building those. So for us, whether the goal is getting to retirement with the ability to maintain a certain income level or protecting the assets, a client has already accumulated and maintained a fair return. We find the appropriate investments to meet those needs. For example, we’re in California, a high-tax state, so tax-free income is a big part of our business. We build bond portfolios and are able to add value for our clients that they wouldn’t achieve simply by buying a generic bond fund. We also believe in alternative investments and non-correlated assets. Our focus is understanding where our clients want to go and finding the right investments to get them there. We are less concerned with relative performance or beating the market. The only benchmark that matters for us is our clients’ personal benchmarks.
GJ: Larry, you had mentioned the ability to access products, especially in the alternative investment space. I don’t think many advisors have gone into the alternative space the same way you have. Specifically, I know you use hedge funds, private equity, and managed futures-type products. How have these types of products helped your clients achieve their portfolio goals not only in a volatile market but also in the longer term?
LG: I said this before – it’s about getting to that financial goal, and you can do those many different ways. You can go the traditional route of not using alternatives and non-correlated assets. This year is a perfect example. We can also use 2008 as an example, where you have markets that are down 20%-50%, the client’s account might only be down 15%. So, in that scenario, the client is beating the benchmark by 5- 45 %, but they are still losing money, and that’s not what you want to achieve in investing. Investing is about making money on the money I have today, and by using alternative investments and assets non-correlated to the market, it’s about absolute return vs. relative return. One example is merger arbitrage funds which are solely focused on making a spread when one company purchases another. They can stack a number of deals and create a return that is not tied to market direction. The same idea applies to private equity, which I’m a big fan of, at least for the managers we use. When we want to invest in a company on an equity basis, the goal is to find cash-flow-positive businesses with earnings growth that will continue to grow revenues. When that occurs, and you own a part of that company, the value of the company increases, and generally, so does the value of your ownership. When you’re in the public market and stocks, trade every second but report earnings quarterly, the current share price doesn’t always reflect the company’s intrinsic value. In the private equity space, you don’t have that same noise.
JG: Brooke, our industry is seeing an increase in the number of female advisors. Would you talk about your experience and/or the challenges of being a young female advisor in Los Angeles?
BG: Yeah, there is definitely a shift in advisor demographics. I’d say the challenges for me are what you would expect. I’m young, I’m a woman, and those can be barriers at times. Being young is a bit more of an obstacle since it correlates to inexperience, so it can feel like I don’t get taken seriously initially. It can be overcome from my experience, it’s just a slower process and involves nurturing the relationship. Once they understand who I am, my values, and that I am knowledgeable, it’s easy. Then I start getting the comments like, can you help on this? Or, what are your thoughts on this situation? On the flip side, maybe because of my personality, age, or gender, I am way less intimidating than my dad, so people will come to me with certain questions.
JG: The two of you are one of a few offices we have in which the advisors are also family. Can you talk about what it’s like working with family? What are the pros and cons? Do you have any advice for advisors who might be considering working with a family member?
LG: Don’t ever do it. Ever. (laughs)
BG: For us, we’re both dominant personalities. We’re both strong-headed and stubborn. When you have those types of personalities in a room without a filter because of the family relationship, it can be chaotic at times, and it can be exciting. Just depending on who’s witnessing it.
That said, there’s something about knowing you have a partner you trust implicitly. The knowledge that our goals for how we are going to treat and handle clients and not having to worry about ulterior motives are reassuring. That’s something you can’t really get other than working with family.
LG: let me add to that is that one thing, it’s not just working together; we’re partners in this business. There’s joint ownership, so she doesn’t work for me. We jointly own this business, and so she has a vested interest in our success.
JG: Larry, I know from previous conversations that you want to grow and expand the business. Tell me about what you are hoping to achieve?
LG: First, we want to have continual organic growth, always. We want to go deeper and broader with the current base. At the same time, within six months of joining Summit Financial Networks, we brought in another advisor who has worked out really, really well. We hope to continue to find folks like that, ones that are with larger firms that are unhappy working in that employee channel. We know there are advisors with low payouts who are obligated to use firm products, and we believe we can offer a better situation. Also, going back to my healthcare days, we want to acquire and merge to build economies of scale on the administrative side and create a win-win for everyone.
GJ: Let’s shift gears and ask some less serious questions. This first one has become one of our go-to questions because the answers have been great. It’s also probably more appropriate to ask since the two of you have such close proximity to Hollywood. What is your favorite movie, and why?
BG: I have two favorite movies, and they’re complete opposites. My favorite movie, and I doubt anyone knows it, is called Go. The reason I love that movie is its four characters’ perspectives of the exact same event, a drug deal. It is really, really intriguing to see the same event from four different perspectives. I’ll never get sick of that movie. And then I also love Clueless. It’s iconic and does not age.
LG: It’s hard to pick a single movie. You know, there are classics that I could watch 100 times, but my single favorite movie, I would say, is The Usual Suspects. I love it because any movie that can take me somewhere I can’t figure out where it’s going makes me think and question what I just saw. Then you want to watch it again to see, how did I miss that? I loved it. Great characters, great actors, great story, and the end of the movie, I’m asking, what the hell just happened? I also like anything that David Mamet does. His stuff is very similar in that it makes you think.
BG: I forgot; I have another favorite movie. Donnie Darko
LG: You don’t get any more favorite movies.
JG: What do you both like to do when you’re not in the office?
BG: Drink abundantly and hang out with my cats. No, I’m kidding, except for the cat part. We, as a family, travel a lot together. We have a second home in Colorado, and we are big culture seekers. We love to go to different places and just immerse ourselves in the culture and experience new things. Our last big trip was to Alaska.
LG: When I’m in town, I’m on the golf course. That is my respite, four or five days a week, that’s where I hang out. In addition to that, I’ve always been interested in sports at every level. We enjoy going to Rams games, Lakers games, and lots of entertainment. I couldn’t live in a city where I didn’t have easy access to the type of sports and events we have here.
JG: What’s been the most memorable trip you’ve taken?
BG: Our family trip together to South Africa was incredible.
LG: Africa was a big deal. We had a great trip. We were there for almost 2 weeks, and we did so much. During our time there, we went all over South Africa, saw Cape Town, had a couple days of safaris, and went shark cage diving with great whites. We did a lot.
JG: That sounds great trip. The shark cage had to be an intense experience. What was that like?
LG: It was great.
BG: I would have avoided it. The only reason I got in that cage is because Dad did. I wasn’t going to let my father do it without me.
LG: We stayed at this sort of natural resort on the tip of the continent. When we checked in, the concierge said, we have you signed up for shark cage diving tomorrow, or do you still want to do it? So, when they ask you a question like that, it starts off with, well, I don’t know. So, we asked if he had done it before. Then he says, listen, it’s great, the water’s cold, like 45 degrees, but we give you a wet suit, so don’t worry, and trust me, once you get in, the last thing you’re worried about is the cold. The next day around five in the morning, they take us down to the outfitters, and there’s a group of 30-40 people. They sit us in a room and tell us all the dos and don’ts, and you did not hear a peep from one person in that room, nobody saying anything. From there, they take us out in the boat to an area where these sharks like to hunt for seals, and they start throwing all the blood and guts in the water to bring the sharks over, and before long, we see these big great white sharks; 8, 10, 12 feet long. Once the sharks arrive, we get in the cage, go down there, and do not stick our arms out. That is the intense part before you get in the water. Once you get in and start seeing the sharks, there isn’t a sense of fear or terror before they get close. There is a recognition you’re looking at an animal in nature, and it’s a totally different feeling because they’re not there to attack you. That said, the sharks will come up and bump the cage, and you will see their teeth up close. It was a pretty cool experience. Brooke, were you scared?
BG: Umm, well yeah. When I was asked to take the photos, I was fearful. I couldn’t.
LG: Oh, that’s right. They gave her a camera, and she was supposed to take photos underwater there.
BG: Unsolicited, I didn’t want to do that. I was trying to focus on not dying, and it was like, here, take some photos under the water. I was the wrong person to ask. I mean, these sharks bite the cage. And if my hands are in the wrong area, it’s going bye-bye.
JG: What a great story. Larry and Brooke, thank you again for taking the time to do this, and I hope you’ve enjoyed this conversation as much as we have.
Larry Goldstein and Brooke Goldstein – Registered Representatives offering Securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer, and a Registered Investment Adviser. Summit Financial Networks is a region of Cetera Advisor Networks LLC, Cetera is affiliated and under separate ownership from any other named entity.
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