Manish Khatta is the President and Chief Investment Officer of the investment management & strategy firm Potomac Fund Management. Manish initially wanted to become a sports agent, but after working at Potomac while waiting for law school to start, he immediately fell in love with the industry. He began his career with the company by programming the initial work on Potomac’s mechanical trading systems. A true math geek and quant, Manish worked his way up to his current position, creating and refining trading strategies built on mathematical computations and number crunching along the way.
Manish joins me today to discuss how Potomac doubled its assets in six months under his watch, without a salesperson or wholesaler. He describes his journey in Potomac and its condition from a branding perspective before they implemented his marketing initiatives. He shares his ideas on accessing and integrating technology platforms in an organization’s operations and the importance of being patient and committed when creating content. He also reveals why the only thing that matters more than a client is your employees and emphasizes the importance of sharing your story through content.
“If you are yourself and put yourself out there, you’ll have clients who’ll resonate with you. If you’re proud of what you do and what you offer, go out there and tell your story.” – Manish Khatta
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Manish Khatta 0:06
I think we were prepared for this pandemic before it happened, but the pandemic accelerated everything that we've been working towards. Because we don't have sales people out there trying to take you to Denny's for breakfast. We don't have sales people calling you to check in without an ounce of value-added content. Our goal is to put out content, both marketing and educational, and let people consume that on their home turf, and then reach out to you when they're ready to talk.
David DeCelle 0:37
What's up, Model FAs. Appreciate you tuning in to today's episode. I am very excited to introduce our guest today. Our guests and I actually go back, I want to say a couple of years or so ago. We had come across each other on LinkedIn; come to find out you had spoken with my business partner, Patrick Brewer, a handful of times, so just a small world. I think it shows the power of social media and connection and specifically content creation, because when we came across each other initially, we didn't know who each other were. But as we continue to see each other post throughout the weeks, the months, the years, it really gave us an opportunity to get to know each other. So I don't want to turn a blind eye to the importance of holding yourself out there, building your personal brand, and making sure to be proud of the things that you're doing because other people take notice. Fast forward to today. It could be some business opportunities, but at the very least going to exchange some great content and have a great conversation here today. So without further ado, Manish Khatta is a quant—a true math geek. Manish has spent his career creating and refining trading strategies built on mathematical computations and number crunching. Manish is a lifelong Potomac employee who started with the firm after college and programed the initial work behind Potomac’s mechanical trading systems. Fast forward to today, and he now serves as the President and the Chief Investment Officer of Potomac. Manish is a staunch believer that investment risk is something that can be contained and conquered using quantitative trading systems. Maryland born and raised, Manish currently resides in the sunny beach town of Lauderdale by the sea in Florida, but is a proud—is it Terrapins? Is that how I say that Manish?
Manish Khatta 2:28
Yeah, Maryland Terrapins.
David DeCelle 2:31
Love it. Well, welcome; I guess we can welcome each other to the sunny state of Florida. I just moved down here recently myself on the opposite coast, but Manish, welcome to the show.
Manish Khatta 2:40
Thanks for having me. I appreciate that intro. I hate bios man, right, you got to write those things out for different places. I think I wrote that for Inside ETFs; I was speaking and I had some funny joke bio and they forced me to change it to something more buttoned up if you wish, you know. So that's where that came from.
David DeCelle 2:57
I love it. For those of you who are just listening to the audio and not tuning into the video. One of the things I like most about Manish, and I think the industry needs a little breath of fresh air, is I'm in a T shirt and he's in a baseball hat and a sweatshirt. You know, even though we're both presidents of our companies, he's also the Chief Investment Officer of his as well. So I think it's just a nice welcoming and approachable look and appearance. That's something I really appreciate. So thanks for showing up. chillin’.
Manish Khatta 3:27
Yeah, those times are gone, man, the suits are gone. The first time I see a suit is the first time I don't trust you, and so that era is gone. Especially with our generation; I think we're the same age. It's like, get to know that person, shake hands, talk to them about their business, but the facade of Wall Street is falling day by day.
David DeCelle 3:45
I gotcha. I agree, man, I agree. Well, I am curious to know, you had mentioned and we're going to talk about customer service and experience, we're going to talk about how his firm has actually doubled the amount of assets that they have in just a mere six months, without the salesperson or wholesaler, which I think is amazing. So we're going to talk about how those two things go hand in hand. And then on the Fintech side, we're going to take a look at how we should be thinking about the technology platforms that we all have access to and integrating them into the business. But before we get to that, Manish, give us a sense of your backstory. I'm intrigued. I think your bio said you started as an intern with the company and then worked your way up to President and CIO. So I'm sure that wasn't necessarily by accident, and you've been working your ass off, quite frankly. So give us a sense as to your journey up through today.
Manish Khatta 4:38
You know, looking back, I can't believe it's been almost 18 years or 19 years since I started. But I came out of school when my dream was to be a sports agent and I had applied to law schools across the country. I got into a bunch of them and I had graduated a little early. My dad was overseas at the time and he's like, look, dude, you're not going to sit around and drink until law school starts, you’ve got to go get a job. Like go get one. I mean, my intention was to sit around and do nothing, right. I mean, you get out of school and go into law school, you don't want to get a job in between. And so funny story, my brother's sitting there; he's like, Dad's not playing around, man, you got to go get a job. And he circles this company in the classifieds called Potomac. He's like, just go get a job for nine months and quit and go to law school.
David DeCelle 5:17
Literally the classifieds?
Okay. We're not the same age.
Manish Khatta 5:23
Well, when did you when you graduate college?
David DeCelle 5:25
I graduated college in 2012.
Manish Khatta 5:28
Yeah, so we're not the same age, you’re right. Yeah, so literally the classifieds in 2001 is when I graduated. And then so I go, and I apply for this job, I get the job; I had no intention of sticking around, and I kind of fell in love with the industry. I was a finance major; I had some programming background. I mean, I'm Indian, so it's like that's in our DNA, is to be able to program. My parents were disappointed that I didn't do computer science or engineering, so I was like the black sheep of the family, because I did finance. And I just fell in love with the industry, working with advisors, trading, developing systems, and I kind of grew with the firm from there. I was lucky enough to have people above me who sold me shares, so I bought 10% in 2007, another 10% in 2014. And then finally, in 2017, I was able to buy majority share of the company. And so it's been that journey where you start with a company that was essentially, I guess, a startup. There wasn't a lot of marketing, there wasn't a lot of getting the story out. And so me coming on board and growing with the company, I had different thoughts on how to expand the reach. We’ve talked openly about being the Gary Vee followers where it's just about getting your story and getting your brand out there. So that's the journey we've taken on for the past couple years.
David DeCelle 6:38
So if I'm a new advisor, listening to this, what I'm trying to wonder is, hey, I just started at this firm. I’m a couple years in the business, I'm a year in the business, I'm brand new in the business. I can see that there's other partners in the firm, I can see they've been around for a little while, and I would love to be in their shoes. And one path certainly is, stay there for a handful years, learn, and go do it on your own. And the other path is doing what you did, which is rise through the ranks. So what advice would you have for advisors who are in a similar situation that you were in, which is, an established firm, brand new, intern even, to now a majority shareholder in the firm? What would you suggest that they do along their journey to give them the opportunity to do something similar?
Manish Khatta 7:27
There's a lot of talk on Twitter about this, where people are like, you have to reward your company with stock, and I just think from an ownership point of view, no one gives away shares. And so my advice would be to cut the check; like, put your money where your mouth is, approach your senior advisors, and offer to buy a percentage. And that's what I did. I think that's the quickest way to not only show someone that you have skin in the game, but that you're serious. Like when I bought my first 10% at 27 years old, in 2007, I had enough for the down payment. And then I use 0% balance transfers to cover the rest until my first K-1. No one knew that, I didn't tell them that. I just said, hey, I want in. I know I'm going to be here, I know this is my future, I want in, I'm ready to cut the check. But what I see is a lot of people with their hand out saying, look, I work really hard, there's sweat equity, let me get some shares. I just don't think that's reality. Advisors who grow their practice, maybe in some cases, but they're not willing just to hand out share. So, cut the check is really the advice I'd give.
David DeCelle 8:30
I was going to ask how you did that at such a young age. So, taking out some debt, and I think you're quite frankly taking a bet on yourself as well as a bet on the firm as well. Because if you didn't believe in what the firm's mission and vision was, then, just again, go do it on your own. So I think that's really cool. So before we pivot over to Fintech and customer service, and things like that, were there particular actions of yours that you had done over that period of time that in the eyes of the then majority owners really elevated you? Like, were you coming to the table with new and innovative ideas? And if that is the case, because I'm guessing that it is, if that is the case, where do you find those ideas? How'd you acquire the knowledge to be able to implement new things for an already existing company?
Manish Khatta 9:19
Ultimately, to me, the best employees make their boss's job easier. That's the literal definition of someone who has the ability to rise through the ranks. And so I took it upon myself to learn every facet of the business. Yes, I was creating trading system. Yes, I was working on the investment side. But I wanted to know the operation side, the sales side, every single detail I could possibly get my hands around. And I think the flip side of that is someone who comes into this thinking, my shit doesn't stink. This is my silo, I'm not messing with operations, or I'm not messing with sales. When you're growing up in a company, you’ve just got to put the work in, and that's it. You know, you just got to put the work in. It's a grind, it's not easy. I worked a lot of hours and tried to learn every aspect of the business, and then of course that serves me well when you start coming into an ownership role. And to this day, I rarely ask a staff member to do something that I have not either done myself at one point or at least look into, and I think that goes a long way.
David DeCelle 10:17
I agree. I think in an ideal world, let's say I'm an advisor and I’m super outgoing. I love talking to people and I can do a great job edifying the firm and/or another person who's next in line to bring someone through a particular process. In an ideal world, that's where you want to end up and that's where you want to spend the majority of your time; but in the beginning stages, to your point, it's a matter of just doing what needs to be done and quite frankly just showing whoever your boss is at the time that you're not above any activities in the business and you're just willing to be a team player. And I think that if the leader of the organization is a good leader, they're going to recognize and acknowledge that and say, hey, I appreciate you helping over here. I don't think that's where you derive energy from and I don't think that that's where your greatest, so let's move you over here a little bit more; but I appreciate you picking up the slack when we needed to do so. And again, that stuff is remembered.
Manish Khatta 11:17
Well listen, I agree, but there's a caveat. I was also an asshole and I mean that in the greatest of ways. Like I would press hard; if an employee left and I knew how to do their job, I would take that on. And I would make sure people, your bosses, understand the task and the roles that are taken on. The squeaky wheel concept is big, not only in sales and marketing but also in your own company, so you got to be able to ask for stuff and prove your worth. Don't ask if you don't have a leg to stand on, but if you do then you got to press hard.
David DeCelle 11:48
So we have a Facebook community, which by the way, if anyone who's listening to this isn't a part of it, just type in the Model FA community on Facebook and join; and there's a couple quick questions to answer but as long as you're an advisor we're going to let you in. There's a lot of good collaboration in there, there's a lot of good Q&A in there, we try our best to post content in there consistently. But what I notice oftentimes is people are always asking questions in terms of, hey what do you think about this CRM, or what do you think about this other software tool? And it's funny because I’ve been a part of that group for a few years now. I often see those same people asking the same questions like a year or two later; and I know that you're fairly passionate on Fintech as it relates to just kind of like picking something and going with it or how the industry should be. People are oftentimes focused on what's the shiny new tool and how does it integrate with what I already have. So I’m just going to keep this question more broad and open ended, just see which direction that you take it; but as it relates to Fintech and the tools in our industry, what are your thoughts about that in general?
Manish Khatta 12:57
You know, actually I have a lot that's changed in the past couple of weeks that will make this a little spicier than we first planned. I think if your business is simple—and what I mean by simple is maybe 15 to 25 million give or take, single custodian, not a lot of unique services or offerings—your best bet is to get an all-in-one technology solution because these Fintech firms are not set up to really customize for anyone's practice unless you have billions of dollars. And we've gone through the gamut with trying to set up a slick user interface, onboarding, proposals—what an advisor needs to run their business. And we've patched it together, and I just think I’ve reached a point where I’m just sick of Fintech lies and vaporware and they promise you the world. You get a salesperson on the phone and it's like, it's on the roadmap, it's coming; and it's gotten to the point now where we are knee deep in three developer calls, where we are bringing on our own developer to build our own front facing user interface. Brewer and I have talked about this for years off and on where it's like, look it's your data, so if you have data at a portfolio management system, a CRM, a custodian, bring all that data into your own warehouse and then create your own front facing experience. And that's really the only way to deliver that. However, you have to be able to afford it and write that check, so I have two sides of this. If you can afford it, I think you've definitely need to build your own software and just use the engine of a bigger company to do maybe performance and things like that; but if you're not, I think you really just need to go with an all in one solution, because I think 80% of something is better than trying to piece together integrations as a small company. You just won't be able to do it.
David DeCelle 14:42
What do you think is—like when should people start thinking about this? Because we have kind of two tiers of clients that we work with. We work with the individual advisor, or an advisor that has a small team that has anywhere from 20 to 150 or so million in assets under management. And then our other consulting offer works with firms that are anywhere from like two to 10 billion in assets. So at what asset threshold, do you think there's enough cash flow being generated to where it makes sense to begin to ultimately explore that?
Manish Khatta 15:16
Well, obviously, that depends on revenue, right? If we're assuming a 1%, give or take, then I would say, what we found is typically the under 100-million-dollar range, it's better off just completely outsourcing it. Once you start creeping over $100 million and you have the wherewithal and the willingness to staff up as well; that that's the other key component. None of this is a Staples, red button; no matter what piece of software you get, you're going to need staff to run it. And I don't care what they sell you out there, it's not that simple. And this is why you can go look at all these portfolio manager systems, and there's all these people that have built custom stuff on top of it. Why am I going to go spend a quarter million dollars to build a custom user interface, on top of what I'm already paying companies? It's just because you need more than what's out of the box. And so yeah, I would roughly say $100 million, is where you can start thinking about doing it all yourself.
David DeCelle 16:08
So you brought up the importance of making sure that your data is your data. So I have a two-part question. One, what data is important to have? Like, what are the non-negotiables that you want to make sure—I guess I shouldn't say have because you still have access to it—but the data that you want, like easy access to that you can use to help you continue to grow and create a good experience for the folks that you're serving, would be the first question. And then why is that data so important for you to have yourself as opposed to sharing with another organization?
Manish Khatta 16:41
Well, it really comes down to the experience that you're aiming to deliver. And so if you have a CRM that has notes about a client, and about when the account was open, when it was funded; and then you have a portfolio management system; and a custodian; you have these disparate pieces of tech and different data that's not flowing. So when people sell you integrations, what they fail to mention is most of the time, only a couple pieces of data flow back and forth—name, email address. And that's essentially useless when you're trying to piece together something. And so what I mean by owning your data is going down the path of, a lot of these companies have open API's, and it's your data, you create your own API, take your data, put it in your own warehouse, where you can then work with it. And this honestly, I'm not kidding, this happened recently, where we just got so frustrated with trying to manipulate data on someone else's platform that we just said, forget it. We want to own this, this is ours, and we want to combine it and present it in a way to our clients that we feel is best versus working around the constraints of another company.
David DeCelle 17:46
Cool. And if you're not very tech savvy, and hopefully I'm explaining this correctly, I'm a niche. But if I’m not, you can explain it better, feel free to jump in. But for those of you who aren't very tech savvy, basically, an API just allows two different software programs to communicate with one another fairly seamlessly. So in case you're wondering what that was.
Manish Khatta 18:07
Yeah, just a line of code that calls your data from whatever system you want it to come from.
David DeCelle 18:12
Cool. So what I'm interested in learning more about is, and you had mentioned, with the data that we were just talking about, that it all depends on the experience and the service that you're trying to provide. So I feel like that's a good pivot into the next portion. So I think it's not overly impressive if someone doubles their assets from year one to year two. But with your company being around for how long? You've been with them for 18 years. So how long is the organization been around?
Since 1987, so a while. And you had shared with me on our call that we had previous to the podcast, that you guys have more than doubled your assets in just a mere six months? I'm sure you're not referring to the six months in 1987? So share with us where you were and where you are now regarding the assets, and let's start talking about why that is. Because one of the things that you had mentioned is you had done so without a dedicated salesperson or without dedicated wholesalers going around to gather these assets. So let's first begin with the numbers just for context for the folks. And then let's talk about why that was accomplished, or how that was accomplished.
Manish Khatta 19:25
Yeah, absolutely. So, from a business history prior, when I was at this firm before, and under different ownership, I'm not throwing shade or anything, but the simple fact was there wasn't a focus on branding and marketing. It was just about, you manage money. If people liked the performance, they see your name, work with a couple broker dealers, and there wasn't that focus on putting yourself out there. It was more about just being vague, not saying anything too provocative. And the thing that I wanted to change is, I'm a big believer in putting yourself out there not only as a brand personally, but as a company. I always use the analogy of these large companies that put billboards or naming rights in an arena; they don't really have to do that. But they do it anywhere for branding. And so in 2017, when I took the reins, initially, there was a little bit of struggle as the industry was consolidating and changing, we're traditionally a TAMP. And so we rely on agreements with other broker dealers. And in 2017, we started losing those agreements. And within six months of me signing the deal, we had six broker dealers that terminated us, because they were changing how they delivered TAMP services. And I just took a step back, and I sat there, and I had this huge SBA loan. We lost, I don't know, maybe $60 million in assets from like, 180 to 120. And I'm like, what am I going to do? I have this loan, I'm bleeding assets. And I just said, I have to double down on what I believe. And what I believe is that it's about content. It's about delivering that content. It's about doing it at scale; it's about doing it to the platform and marketing in the now. I took that concept and said, alright, this is going to be a two to three year process. We're going to have to start laying the foundation of putting out content out there. And it was a struggle boss; there were times where I'd record a podcast, write a blog, and I'm sitting here like, what am I doing? Why am I wasting my time with this? But we just kept head down, head down, spreading the word, spreading the word. And then earlier this year, we really changed up the TAMP business and started releasing new versions of the software, adding new managers, and it all kind of came together. Because what we saw is, as we were making these changes, we had some good articles and PR hits. We started seeing website traffic increase and video hits increase. And it all kind of led up into this perfect storm where we went from roughly 130ish to, I think last time I checked it's more than double now, it's like 315/320, or something like that, since June. And I'm not saying like, I don't want someone to walk away from this and say, you raise all that assets because of a couple videos. That's not the case, right? You know this from a marketing point of view. It's everything. It's the new product, it's how you release it. It's the consistent dedication to branding and marketing that gets the story out there. And so I think that's the Genesis; I think we were prepared for this pandemic before it happened. But the pandemic accelerated everything that we've been working towards, because we don't have sales people out there trying to take you to Denny's for breakfast. We don't have sales people calling you to check in without an ounce of value-added content. Our goal is to put out content, both marketing and educational, and let people consume that on their home turf, and then reach out to you when they're ready to talk. And the cool thing about that is when they come to you, they're already pretty much qualified. I have people come in to us saying, oh, man, I love that podcast on direct indexing or HSA plans. I don't have to put you through a webinar deck; you already know everything about us. And that's the beauty of what we've rolled out.
Unknown Speaker 23:03
Hey, Model FAs, I know you're enjoying this conversation. But I wanted to take a quick break to talk to you about the Model FA Accelerator. This is a unique collaboration between us and you, where we help you build a financial advising practice that you can be proud of. We focus on the foundational concepts around how to pick a niche or a specialization, how to price your services, how to construct an offer that people are going to buy, and then how to market it and sell it in a way that will get people to sign on the dotted line and become clients of your firm; all while giving you the information to scale and set up workflows and operational processes that will allow you to reclaim your time and build a practice that doesn't run you. So if you'd like to hear more about that, go to www.ModelFA.com/accelerator or www.ModelFA.com. Hover over Work With Us and click on Accelerator. Hope to see in the program.
David DeCelle 23:53
So there's two main things that you just said that stuck out that I want to talk a little bit more about. So what I'm impressed about is you started off on the journey. So I want to start off with timeframe, and I want to discuss the fact that this didn't just all happen because you shot a couple videos; so what that actually means. So where I feel like a lot of advisors struggle is, there's a lot of folks that grew up in this industry who are used to going and putting on a seminar, and they have X amount of people that sign up, X that show up, X that book a meeting, X to become a client; and they get their 1-2-3- million bucks a month, rinse and repeat over and over and over again. Just send out the mailers to the Facebook ads, etc. Or the Facebook ads is newer compared to back in the day. And there's a sense of immediate gratification. And it's one of those things where it's like, well, if it's not broke, don't fix it. Those things still work. Obviously COVID put a little bit of a damper on actual seminars, but it's more of a pause. It's not like they've gone away. So a lot of advisors are used to that more instant gratification; a two- or three-month sales cycle with folks. Especially when you get the referral, it's even more refined and shortened; but you said that you made a commitment at the very beginning that hey, this is going to be at least two or three years before we even gain traction. Then there were probably many times along the way, I know that this has happened with me specifically, where you're writing something, shooting something, whatever, and then you just have that doubt creep in. So I guess my question would be, how did you know to be patient with that and what helps you get through those moments of doubt when you're asking yourself is this even worth it to do this stuff?
Manish Khatta 25:35
Probably my team. I mean I literally try to quit all the time with this stuff because you know I’m the one creating the content for the most part. There would come a time where you would be really busy with work—I got four kids under four years old and I’m sitting here on a Friday afternoon trying to record and podcast, and it's like, I have a business to run and a family. Why am I doing this? And sometimes it was just the people you follow, like the Gary Vees and the other people where you go back and get a little motivation from hearing them. Industry folks that are doing this, and then also my team just saying hey, this is going to work, marketing people that I trust in the industry; it's just a grind. And you think back to anything that you've ever accomplished in life, it's a grind, it's hard work, and this is no different. People think that they post a picture of their spaghetti dinner on Facebook and all of a sudden you're supposed to get clients, and it's just not how it works. So I made the financial and the time commitment to say, look two years head down, I’m not going to do anything else. And get this—this is a great story. Our YouTube channel that's been up for probably a year and a half, close to two years—the first 65 videos or so have about five to seven views each and we were going to quit. And then all of a sudden, I kid you not, all of a sudden three weeks ago we start seeing 500, 800 views, 1000 views; and we're like what the hell is going on? And then we start digging in, it's just hitting. Google's now recommending some of these videos to other folks and it's starting to gain traction. I tell that story because it is all about the grind and being repetitive and making sure we’re putting it out there. I think advisors in general just don't have that mentality. We have just as many marketing people now as we do operational people because we're trying to grow that side of the business, to really press hard on the content side. So it has to be a commitment, from the top down, you got to put it into your financials—look, I’m going to spend 33% on salaries, I’m going to spend 10% on you know content creation, whatever it may be. But people aren't willing to do that; they want to hire their niece out of college to write a couple social media posts and then quit.
David DeCelle 27:41
So I’m hearing a few things there. One is, and I’m a big believer in, we have 50 to 70,000 thoughts a day and the majority of those are negative, so if we give our mind the opportunity to talk ourselves out of something we're going to do that. So if you're consistently consuming positive content, you're consistently consuming the content that motivated you to start, so like Gary Vee as an example; I think that helps. I think what you also mentioned was solicit accountability from those around you; and then one thing that you didn't say but I feel like this is true, at least this is how I am with certain people, just because you post your first video doesn't mean that anyone actually gives a shit. And I feel like they don't even bother watching them until they know that you're actually serious and you're going to consistently do it because you're asking for their time—for three minutes, for 15 minutes, however long your video is—and I feel like through consistency ultimately you end up winning people over and earning their attention. But they're kind of testing you out at the beginning is kind of my take on that.
Manish Khatta 28:48
I think that and the fact that some people are putting videos out where they're just selling themselves and selling something
David DeCelle 28:54
As opposed to adding value.
Manish Khatta 28:56
Yeah no one wants to be sold anything. Add some value to that person's practice. I mean we have an OCIO service for our TAMP advisors, and we have advisors calling us that aren't on our TAMP and say, hey, can you help me put together model portfolios, or can you take a look at this; and we will help them even if we have nothing to gain from it, and I think that's just an underrated trait of people. I mean Patrick called me the other day and was like, hey, can you talk to us about what you guys are doing on the TAMP side, maybe you can share some information; and one of my staff members were like, why would you take that call? Why would you help someone who's potentially a competitor? And I said, that’s just not how the world works. Add value and continue to do that and it'll come back to you tenfold, but that's not how people think of marketing. They think of it as, call me, I can help you with your retirement plan; alright cool, that’s not going to get anywhere.
David DeCelle 29:43
So the second piece that I alluded to before—so let's say you have a website, which I would assume every advisor has a website, whether or not looks good that's another conversation.
That's probably not a good assumption but go ahead.
Well the ones that I’ve come across have them and then maybe that's why I’m not coming across the ones that don't, because I can't find them anywhere. So let's assume that an advisor has a website, let's assume that they are posting content quite a bit, let's assume that they're doing client events, let's assume that they're tossing out a webinar or a seminar here and there, and let's assume that they get client referrals every now and again. So if one of their clients speaks to a friend about the advisor, and that friend then does some Googling and some stalking on that advisor, they come across their Facebook page, their Instagram, maybe a YouTube channel. They consume some of their content; they then go on the website, they poke around that, and then they end up taking the action to fill out the lead form on the website. Well, without knowing their entire journey, you'd probably give credit to either the website or the client for where that lead or that prospect came from; but it's more all-encompassing than that. It's like, what gets the credit? It's the strategy gets the credit.
Manish Khatta 31:03
Well let me stop you for a second. Do you know what winetext.com is?
That's Gary Vee's wine company, no?
Correct. So I subscribe to WineText, you get that text with the wine of the day and then you press five and hit send and it'll send you five bottles. How did I go from following someone on business and content creation to ordering wine from his company? I'm just trying to hammer home your point. It's a spider web and you're creating the spider web and you don't know how they're going to come in; and typically I will go even further and say the final lead form they fill in is likely not the first place they consumed content from.
And so it's a spider web and that's how we say it inside. We joke about this internally, when we say the spider web is growing, because we can track—we know if you watch the video and then you went to a lead form then you went to our website and then you filled out a separate lead form because it's all in HubSpot, and we can track all this. We don't do that to be creepy; we do it to say, alright, what is the journey of this person? How can we improve the delivery of content along their journey? Listen, we run Google ads for the sole purpose of reach. Just to get out the word and to get out the content that we want to spread; that's it. We’re not selling sunglasses here; we're just trying to spread reach. And my biggest fear is that advisors hear us talking and think that they can't do this, or that it's beyond them. I mean that's not. I mean this was all, you know I learned this all just from YouTube videos and from following other people. I didn't go out and spend $200,000 on an SEO expert to come in and do any of this stuff. It's all there and that's the power of the internet. I mean look what we're doing right. It's a Zoom call we’re recording, we can strip this audio, we can do the video, and we can press on this content for the next three months. So I think people just need to start—just start creating something.
David DeCelle 33:02
I agree, and what's cool too about content, the purpose that it serves in my eyes is remembering the fact that trust—I don't think trust is necessarily built based on elapsed time, alone anyways—I think trust is based on the accumulation of experiences. So like, half the stuff that they wear or half of stuff they have, it's from Instagram ads. Like, oh, Instagram got me again man. I get targeted and they continue to put it in front of me and show me how cool it is or whatever, and after seeing it enough times I’m like, all right you got me.
Manish Khatta 33:37
I’m a sucker for that, especially if they let you Apple pay it. I’m just sitting here ordering shit left and right. I’m horrible.
David DeCelle 33:41
Oh, it’ll be here in three days…but I think trust is based on the accumulation of experiences, so content for example. If every time they log on the platform and you're popping up, and you're popping up with something of value, they're going to get to know, like, and trust you from afar to the extent that—for those of you listening, we've never met before, right? You and I have never met before but when we meet, I’m probably going to give you a hug. I’m not going to shake your hand and be all staunch about it. I’m just going to be like, dude what's up? Because we've been able to see each other on video, we've been able to hang out on a couple calls now, you know my business partner fairly well, so when we ultimately meet it's not going to be weird. I think the other part of content that is super important to take a note of is, whether a prospect that you're meeting with is male or female, boatload of assets or some assets, whatever, meeting with an advisor I think can be somewhat of an intimidating experience; because they don't know what you're going to be like, they don't know how the meeting is going to go, they don't know about any of that stuff. But if they have a chance to get to know you from afar, they walk in, to your point as you said before, when someone calls you, they've already done the due diligence. They've already—you got to really mess that meeting up for them to not become a client because they're already 80-90% of the way there. Otherwise, they wouldn't have come in if they didn’t like what they saw.
Manish Khatta 35:05
Yeah, I mean, people want to do business with people. And I think we've forgotten that as large corporations grow, and mom and pop businesses get squeezed out, we forget how business is usually done, and that's face to face. And you can still do that, in a content way. And it just, it's not that hard. Like, I just started a book club at our firm, where once every month or six weeks, depending on schedules, I mail out a book to everyone, we read it, and then we talk about it, and we have a Zoom meeting to discuss the ins and outs of the book. Now our first one's coming up. I haven't told everyone but I'm recording it. Why not? Right? I mean, if people get to know our staff and their thoughts on a book, and they get a book recommendation; it has nothing to do with sales, it's just getting to know you and putting the content out there. And so to me, I'm a big believer that everything is an opportunity to share yourself, everything is an opportunity for content, if you're willing to go down that route.
David DeCelle 35:56
Have you ever read the book Delivering Happiness by Tony Hsieh?
Manish Khatta 36:00
Yes, and two, each month, a new person picks a book and the next person up actually picked that. So that's the next book club piece coming up here in three weeks.
David DeCelle 36:09
That was totally unplanned for people listening, so I’m glad it worked out that way. So like in high school, in college, I never read books. I hated being told what to read if it wasn't applicable to what I was going to do. And I would just find someone in class who I was friends with to summarize it for me so I knew I could have a talking point or two during class. So I looked like I've read it. Fast forward to today, I have a goal this year of reading 200 books, and when I say read, I listen to the books. But last year, I listened to 170 books. This was one of the first books that I listened to a few years ago when I really had a nice uptick in my consumption. And it's probably my most number one recommended book, when someone's like, hey, what book should I read? So what I love about Delivering Happiness is it talks about, quite frankly, making your clients and your prospects feel like it's their birthday, every time they interact with you. I mean, every time they interact with anyone that your firm, right, just bringing happiness to them.
Manish Khatta 37:10
Wait, now let me stop you. So how do you do that? Because I have a very specific thought on how that's done.
David DeCelle 37:14
How do I deliver happiness?
To your clients.
I mean, it's a multitude of things. It ranges from on their first call, typically on their birthday, people write HBD on Facebook, and their brothers and sisters text them. So if they're getting the call, they're like, whoa, this is cool. I like to add a PS section in my emails where I add something of value that's related to what it is that we've been talking about. I make sure I engage and interact with them on social media, like I tracked, I want to say it was maybe six months ago, I talked to an average of 70 to 90 people a day through the various platforms: text messages, phone calls, coaching, calls, sales calls, etc. Quite frankly, I think that I try and do a very good job of just making people smile all the time. So I wouldn't say that I have like a thing. I think it's more so a multitude of little things that ultimately add up to becoming likeable to those around me. But what's yours?
Manish Khatta 38:10
There's one thing that's more important than your clients when you run a business, and that's your employees; and to make your clients happy, there's nothing else you have to do than to double down on making your employees happy. If they are happy with their work/life balance, if they're happy with their compensation, the benefits package, coming to work—that will translate to your clients. There's nothing else you have to do. You can put certain framework in place and suggestions on nice little touches, but a lot of times it just takes care of itself. And so I was raised in this industry, from a perspective of, employees are replaceable parts. That's not a bad thing; some people run their business that way, you pay him a certain amount, they do work, and that's it. And there's tons of businesses, large growing businesses, that treat employees like that; and I took the stance, once we started crawling out of the initial hit in 2017, I said, listen, I want to over give. I want to be overly generous to staff in every way I can afford. And that is how I'm going to take care of my clients. And so what does that mean? Yes, you have to pay them well; I changed the 401k matching to 6%, which is the most I can do under the plan we have; I pay for 100% health care, 50% of family; we have discretionary profit sharing plan contribution that we stuff in at the end of the year; we do Uber Eats gift certificates on a monthly basis. The list goes on and on where this is where I'm a big believer; and I've seen advisors who, I mean, I shit you not, it's just they don't take this part of the business seriously. You know, it's like, you have an assistant come in and do paperwork, and they're not going to feel that level of pride if you're not taking care of that person. And so, to me, that is the number one way to deliver happiness to your clients.
David DeCelle 39:52
I agree 1,000,000% and that's one of the if I'm not mistaken, that's one of the main things that Tony Hsieh talks about. Gary Vee talks about a lot too. If you take care of your people, your people take care of your people. One thing that we do—and I would suggest that advisors you do this with your team, because if you haven't done it before, just the action of you being self-aware enough to start this is going to perk them up immediately—which is every year (you should anyways, I know not all of you do) you should be setting your personal, professional, financial, spiritual, mindful goals that you have for yourself, and you should be monitoring those on a quarterly basis. And if you're ahead of pace, increase the goals; if you're behind pace, increase the activities, and make sure that you're recalibrating at the very least, quarterly. If you want a book that can help with that check out The 12 Week Year. It's a really good book to help systematize that and share with you why that's so helpful; but you shouldn't be the only one in your firm who's making goals. You should be meeting with all of your employees and understanding what's important to them, because if you can start to connect their why with what they're doing on a daily basis, your people are going to be incredibly committed. And who knows, maybe they have a silly goal to where they want to meet someone, or they want to do something, to where you can compile your network and resources and actually help them get there. You're just in a different category as you go from a boss to a leader in that instance when you're truly helping elevate them personally and professionally, or I should say professionally and personally, and making sure that you're just taking a liking into them as another human being. So we do that with our employees; we already have our next quarterly session scheduled in March with everyone to debrief things. So I would just echo what you just said because I think it's of the utmost importance; otherwise, you're always going to have a turnover issue because people are just going to get sick of the same old shit, and they're not going to want to be a part of an organization that doesn't care about them. Because they're trying to do a good job—not just caring about you in the business but caring about all the clients that they interact with. And I will ask you, would you rather someone who's incredibly happy dealing with your clients or someone who's a little jaded and you know resentful to be in front of your clients? I think that answer’s quite obvious.
Manish Khatta 42:21
I think this is the biggest lightbulb moment for advisors when they just recalibrate their thought process towards staffing, towards taking care of their staff, and I’m still learning every day. I'm still trying to do things better, and the more you can afford, the more things can be changed. There's only one owner. Let's say you have a couple partners; but my point is, that owner mentality doesn't necessarily have to be with every employee, it's not their company. But if you take care of them well and put goals in place, I think that's really helpful. So a lot of our success comes down to the staff and the work they put in, and the dedication they have to what we want to do here, and the fact that we're just having fun. It's been a fun, fun year, obviously pandemic aside, you know I’m not trying to lighten that. It's just fun to do these weird things, and occasionally we'll do some completely off the wall branding videos. We were talking earlier about the April fool's pot of mac and cheese video, like, just these silly things that people will be like, why are you doing this? It's fun for us, it just lets people know who we are. I mean we ordered bats with our company name on it and recorded videos of us beating the shit out of computers and fax machines. Why? I mean it was fun, it was good branding, we send it out to people, there's imagery everywhere; I don't know, we're just having fun and hopefully people can see that. That might go against you sometimes. I had an advisor who emailed us and that's actually our next podcast. I’ve read the email out—he basically said that I don't find your communication and humor and video to be appropriate, I want everything printed, and all my manager commentary with additional resources—and that's okay. That just made me even double down even more.
David DeCelle 44:09
It's not your ideal client.
Manish Khatta 44:10
Exactly and that's the great thing. If you are yourself and put yourself out there, the chips are going to fall where they may. And you're going to have clients who resonate towards you, and then you’re going to have others who don't and that's okay. You just can't make everyone happy.
David DeCelle 44:25
I agree. I think it's standing by what you're passionate about, and being open to feedback, but also doing what you believe in doing is I think very, very important as you're growing a business.
Manish Khatta 44:38
If you're not going to toot your own horn, no one's going to do it for you typically. So if you're proud of what you do and what you offer, you got to go out there and tell the story.
David DeCelle 44:47
I agree. So as everyone knows by now listening to these episodes, one of the questions that I ask every single guest that we have is what their favorite book is. I think it's important to get these additional resources from our industry peers; I feel like a lot of advisors out there, hopefully it's not you, are complacent with their learning. And if they are learning, a lot of them or just reading up or watching stuff on the industry. And I think it's important to get outside perspectives from other industries, or people not affiliated with the industry; because I think we can all agree that to a certain extent, our industry is somewhat of a dinosaur when you compare it to, like, software companies and we can be stuck in our ways. Sometimes in getting the outside perspective and applying it to our industry, something that's mature somewhere else, in its infancy here and we can really use that to our advantage. So I want to promote learning outside of just our industry. So your book, I read this a while ago when I actually read books and not listened to them, and this one's a beast. I think that's when I stopped reading books. I was like, okay, that was a lot. It's like three inches thick, and it's The 4-Hour Workweek. Tell me why you pick that as your favorite book.
Manish Khatta 46:03
So I think the title gives it a bad rap, right? Because a lot of people—I actually have a great story about this. I was at a broker dealer conference in Hawaii, it was like a top producers’ conference, and everyone would get up and do their presentations about their product and it was a 15-minute presentation slot. And I thought to myself, I mean, you're in Hawaii, do you really want to hear about tactical allocation for 15 minutes. So I was like, alright, I'm going to hand this book out. So I got The 4-Hour Workweek, I ordered about 40–50 copies, shipped them out there, and I handed it out to people. And there was a poem in the book about dancing in the rain, about how kids who dance in the rain, enjoy the now, how they're not so focused, there's that innocence of just enjoying what you're doing right now. And there's two takeaways from the book that I really love. The time management aspect: we all have the same 24 hours to make sure that you put in that time management, to not do everything and burnout. And the other part was just trying to enjoy where you are now. I wrote my last market commentary, pre COVID, I spent a lot of time volunteering at senior care facilities. And I do that because I really love talking to old people because of their perspective. And what I mean by that is, when you have limited time left on this planet, you have this really cool ability to not give a shit about anything else that's not directly in your face. Because if you can't control it, there is no point in dwelling about it. And that's hard, right? I mean, we have families, we have businesses, you have anxiety, and I get it; but that book at an early age, it was I think, 27–28, when I started it, just it's a great way to get your mind in a certain perspective when it comes to what's important time management and enjoying what's in front of you. So I always appreciated that. There's a lot of people who hate on him in the book itself and that's fine. There's always going to be that out there. But that was my big takeaways from it.
David DeCelle 47:54
Yeah, I think he talks about something in there basically about if something isn't serving you or isn't an activity that you should be doing, it should be delegated, automated, or deleted. And what I like about the book is he it's not just like, woo-woo, like, here's how you work less; it's, here's a resource to where you can go hire a virtual assistant at a fraction of the cost for an actual assistant. If you're new in business and tight on cash flow, here's a way that you can still afford to do that. So it's more of like, it shares the concept, but it also gives you a how-to and next action step, is what I really liked about it, as opposed to you trying to figure that stuff out on your own.
Manish Khatta 48:36
I have an industry friend that I rib a lot on Twitter, because he's always doing his own editing. And I'm always like, you got to stop, you've got to outsource that thing. And it's hard, right? Because you're a business owner, you want to kind of poke a hand in these different things and, like bookkeeping, I did the bookkeeping for a while, and I sat, it was Monday morning doing something, I'm like, why am I doing this again? What's the point of this? And so that mentality, like you said, of ruthlessly outsourcing, and you have to be absolutely ruthless about it, to fit so you can spend your time on your core strengths and what you'd like to do. And that's the takeaway, really.
David DeCelle 49:19
I agree. And if you haven't listened to our episode, that we released previous to this one with Dr. Travis Parry, that's all about time management. So if that's something that you struggle with, time management, delegation, things along those lines, go scroll down a little bit more on whatever platform you're listening to this on, and be sure to tune into that episode because there's definitely some good nuggets in there. So Manish, before we wrap up and get into the after-hours section, tell our listeners where they can find you and what the best way to interact with us.
Manish Khatta 49:41
Obviously we have social channels, everything's on our website PotomacFund.com. You'll see all our social channels there, interact with us anywhere there, all out blogs and videos are there as well which will take you to the YouTube page in addition. And we like to pride ourselves on being open and transparent. My public calendar is on the website, book a time to talk, talk to us and learn more about us.
David DeCelle 50:23
Awesome. And all of the links will be in our show notes as well. So you can get easy access there as well. So links to the website, social media, etc. And for those of you who found value in today's episode, I really like the casual nature of our conversation, quite frankly, I thought it was a super enjoyable conversation. So if you did find value, be sure to share it with a friend and suggest that they listen to it and give them some reasons why. I think that if you just send a link to someone, you can’t expect them to actually spend the time and the hour or so that we've been on this call, to actually invest that. So give them a reason why they should listen to it based on the impact that it had on you. And if you would be so kind as to subscribe and leave us a review on iTunes that would really help the awareness of the podcast get out to more folks. And if you take a screenshot of your review, and text it to me at 978-228-2338, again, 978-228-2338, there'll be a quick automated message. You need to enter in your name to basically get added to my contacts, and then beyond that automated message, you're texting directly with me. So just shoot me a screenshot of that review. And for the first three people that do that after this episode, I'm going to give you access to our entire digital suite of services, our Accelerator program. So if you go to ModelFA.com and click on Work With Us and then Accelerator, everything that you see on that page from a digital standpoint will be given to you for free, as a thank you for writing a review. So we appreciate you for that. If you do want to connect with me directly, feel free to just google David DeCelle, d-e-c-e-l-l-e. All my social channels will be on there; the one that I interact with folks on the most would be Instagram. So that's @David_DeCelle. So feel free to connect. Similar to Manish, always happy to have a conversation. We'll send you my 15-minute calendar link to schedule a call, I don't care if you're interested in services, or if you just want to chat or if you have a quick question or anything like that, always happy to have a discussion. So with that being said, Manish, I really appreciate you coming on to today's show, looking forward to collaborating moving forward. And at the very least being supportive from afar. And for those of you who tuned in, I appreciate you doing so. And we're going to head into the after-hour section now. So if you'd like to stick around, feel free. Otherwise, get on with your day and make the most of it. And be sure to take whatever you learned today and actually put it into action. See you in the after-hours portion. Thank you.
I really like your candor. It's just like, no bullshit. Just here's who I am. Here's what we're doing. Here's what I believe.
Manish Khatta 52:51
Yeah, I just don't know how to be any other way. And so sometimes, there have been times where that goes against me, like, I have a hard time communicating with people from the Midwest. It's hard for me to blow smoke. I appreciate people who just tell me what it is and then we'll work together to figure it out. But there's times where I probably shouldn't be so direct.
David DeCelle 53:11
Yet, and there was a guy, so this was actually good feedback that I got. So when I like first started in consulting, I kind of leaned too heavy in the Gary Vee type of thing where, you know, he says shit and fuck and he swears all the time and he kind of lives by that. I don't really filter my language, if I'm talking with someone, unless it's like my grandmother or my parents or something like that. And I also try not to go out of my way to say that stuff. Like, if it just comes naturally, it comes naturally. But there was a blog that I wrote, where I had a couple swears in it. And someone reached out to me on LinkedIn. And at first I was like, super defensive, but just internally, I didn't come out at them or anything like that. But he had said, hey, I've really enjoyed reading your blogs and listening to your content, but I was really turned off by some of the language that you use in your most recent blog; I button that up if I were you. And at first it was like, who are you dude, piss off. But then as I started thinking about it a little bit more, I was like, you know, I think in a conversation or on a video or a podcast or something like that, it's okay to be a little bit more flagrant with your language. But if you're going to be writing something in a blog or article format, maybe it makes sense to refine it from there. So I feel like to your point where you say, sometimes it works against you, I also feel like it depends on the medium that you're communicating.
Manish Khatta 54:37
I honestly just don't care. If it comes out, it comes out. I just talk and write and it is what it is. And so I had the same thing where someone's like, hey, I love the videos but I could do without the cursing. Great. You know, you do you man, and I'll do me, and so I love all feedback, good and bad. And you take it with a grain of salt. And so, I just think I was brought up in industry to write vague. Don't say that you're bullish, don't say that you're bearish; stay that it may do this or it may do that.
David DeCelle 55:05
No, take a stance.
Manish Khatta 55:07
Yeah, you end up with something that does/says nothing. And I still get this commentary from managers where they're six pages long; at the end of it, I still have no idea what you think. Like, what do you think about something?
David DeCelle 55:18
They’re like, well, I don't want to be wrong, so I'm not going to tell you.
Manish Khatta 55:22
Yeah, look, what I do that's actually interesting, I went back through my old market commentary, and I would pull out quotes where I was completely wrong and quote it in a new market commentary. I mean, it's okay to just have an opinion. And so I don't know. I mean, sometimes it rubs people the wrong way. But I don't know, those people aren't going to have a drink with me and have dinner with me anyway. And so why do I want to do business with them?
David DeCelle 55:46
I hear you. I got a few questions for you that starts off genuine curiosity, then funny, and then a little off color and extra funny. So buckle up. I've been wondering this entire conversation. Is that a Snuggie? Is that a blanket? Is that a jacket behind you? Like what is?
Manish Khatta 56:05
So I'm in a Regis office building. And since you're in Florida, you realize one of the big problems here is when it's 75 outside, it's negative 20 inside every establishment. And so that is actually a blanket that we have with our logo on it. And it's just for, around 1pm for some reason, the AC gets cranked and yeah, I wear that. It's 80 outside, but that's why I have a sweater on.
David DeCelle 56:34
So on the west coast, Florida, I think it's like in the low 60s today. And I've only lived in Florida since September, but my blood’s already thin. I literally have the heat on like 73 right now cuz I’m in shorts and a T shirt so I was shivering.
Manish Khatta 56:48
I played tennis a lot and had a lesson with one of the pros that I cancelled the other day because it was going to be 55. Like, I just I don't go outside if it's less than 70.
David DeCelle 56:58
Mind you back home, at least in Boston, they got smashed with like 18 inches of snow the other day. So us being like, oh it’s 55 or it's like 60…
Manish Khatta 57:06
It's true about the blood. I mean, I've been here for seven, seven years now. And I'm telling you it's true. It's like after I laughed at everyone who was wearing parkas when it was 60 degrees, and now I'm that person.
David DeCelle 57:17
Yeah. And they're comfy to wear something different for a little bit. Yeah. Couple Would you rather questions. One is just literally busting your chops, because I think it's funny. And for those of you who are just listening in, you may not get it but if you're watching the video, you surely will, or at least if you see some of the images that we posted of our headshots and whatnot. So first would you rather question—would you rather go without shampoo for the rest of your life or toothpaste for the rest of your life?
Manish Khatta 57:42
I don’t need fucking shampoo. Without shampoo.
David DeCelle 57:46
So for those of you who can't see, his head is like a baby's bottom right now. It's glistening. It's nice. So last would you rather question, and I've gotten some different answers when I've asked people this, so I am curious to see yours. And whatever you're thinking it is, it's not; it's something totally different. Would you rather fart really loud? Or poop your pants silently?
Manish Khatta 58:11
Am I by myself? Or who am I around?
David DeCelle 58:14
Okay, that's fair. Well, you're definitely around people you're at. You're at an industry conference.
Manish Khatta 58:18
Oh, fart really loud, hands down, and no one wants to shit themselves. Come on. Once again, I don't care what other people think, I just don't want poop in my own pants. Yeah, that's an easy question. Yeah.
David DeCelle 58:29
Love it. Well, I really appreciate you joining today. I thought it was fun. I'm excited that myself, you, and Pat have created some connection and a friendship, and looking forward to meeting you in person and seeing where the industry brings us. Who knows what it has in store, but I appreciate you joining today.
Manish Khatta 58:49
Likewise, thank you, sir. Awesome.
David DeCelle 58:50
Awesome. And for everyone who stuck around for the after-hours portion, we appreciate your time. Grateful for your attention and we will see you on the next episode.