Episode 35: $3B Alts Platform Co-Founder Turned $3B RIA Founder Dick Pfister of Alphacore on Innovation in Alternatives and Advisory| Why the 60/40 Model Needed a Reset
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Most advisors aim to put their clients first. But, many fall short by leaning on status quo strategies - like 60/40 - that don’t necessarily serve their people in the best way possible.
Today’s guest has built not one, but two billion-dollar businesses. By asking “why not?” and differentiating his investment strategy, $3B RIA founder Dick Phister chose the smart move over the simple move, even when it wasn’t easy to execute (or explain to clients).
Ready to challenge the status quo? Listen in as Dick and Stacy discuss:
● His backstory – how finding his dad’s gold coins sparked his passion for finance
● Why he and his partners built a firm that pioneered the movement of democratizing alternative investments
● How storytelling has helped him attract clients and teammates who align with his unique approach to investing
● Why he believes anyone (even left-brained quants) can master storytelling with the right training
..and so much more.
About Dick Pfister:
Dick has over 25 years of experience in the wealth advisory and financial services with an emphasis on diversifying traditional portfolios with alternative strategies. In 2015, he founded AlphaCore, which has become a leading wealth advisory firm. He serves as AlphaCore’s CEO and managing member of the Investment Committee.
Dick provided investment insight to the San Diego Foundation Investment Committee, the USD Emerging Leaders Council and served as a board member for Voices for Children, a charity focused on helping foster children throughout San Diego. He is also a member of the iCapital Advisory Council.
Dick and his wife, Kristi, have three children and reside in La Jolla.
Resources Mentioned in This Episode:
Songs: Eye Of The Tiger - Survivor
Books: The Obstacle Is The Way By Ryan Holiday , Perennial Seller by Ryan Holiday
TRANSCRIPT
Below is an AI-generated transcript and therefore it may contain errors.
Dick Pfister: [00:00:00] It's almost by nature that you, as you grow as an advisor, as your experience grows, you're going to want some of these, call it quote, unquote, more complex, more sophisticated strategies for your clients, the hesitation always becomes well, a few things. One is it's not easy to learn about them. You've got to study, you've got to do your research and due diligence.
Dick Pfister: The other part is operationally, it's still not as easy as clicking a button to put your clients into stocks and bonds, right?
Stacy Havener: Hey, my name is Stacey Havener. I'm obsessed with startups, stories, and sales. Storytelling has fueled my success as a female founder in the toughest boys club, Wall Street. I've raised over 8 billion that has led to 30 billion in follow on assets for investment boutiques.
Stacy Havener: You could say against the odds. Yeah. understatement. I share stories of the people behind the portfolios while teaching you how to use story to shape outcomes. It's real talk here. Money, authenticity, growth, [00:01:00] setbacks, sales and marketing are all topics we discuss. Think of this as the capital raising class you wish you had in college mixed with happy hour, pull up a seat, grab your notebook and get ready to be inspired and challenged while you learn.
Stacy Havener: This is the billion dollar backstory podcast.
Stacy Havener: Different is better than better. It's a vibe I believe in. And today's guest has built not one, but two multi billion dollar businesses on that premise. This is absolutely the story of a founder who sees the financial services and investment industry and asks, why not? Dick Pfister, founder, CEO of Alphacore, a 3 billion RIA who is turning the tried and true in this biz on its head.
Stacy Havener: 60 40 model? Break it. [00:02:00] Core satellite? Rethink it. Not enough females in finance? Step to it. You may remember Dick's name from Altegris, the 3 billion firm he and his partners built that pioneered the movement of democratizing alternative investments. They exited the business, and Dick needed a financial advisor.
Stacy Havener: He couldn't find what he wanted, so he built it. He was the firm's first client. Dick's story will inspire you and challenge you at the same time. Dick's an innovator, but he's not doing it to be an innovator, air quotes. He's doing it because he sees a different way forward. And he and his team are creating it.
Stacy Havener: Let's challenge the status quo. Meet my friend, Dick Pfister. Hello, everyone. Thanks for being here, Dick. Special thank you to you for being here from one of my favorite places in the US, [00:03:00] La Jolla, California. Great to have you in the studio. And can we start with my favorite thing? I guess I get to do that because I'm the host.
Stacy Havener: So I can ask you, uh, about your backstory and I'd love to. Go as far back as you want, like kind of always tell people, like, did you always know you wanted to be a trader or in the investment world? Like, were your parents in this biz? Like, go back as far as you want and kind of take us to where we
Dick Pfister: are today.
Dick Pfister: Well, first of all, thank you for having me and I'm really happy to be here. I've been following you and, you know, got to know you more and more over the past, you know, five years or so. So it's been a pleasure and, and really happy to be on your podcast. I know I'm talking to an expert storyteller, so I will try to do my best to give you a little bit of my backstory.
Dick Pfister: Okay. So it's, you know, it starts when I was young, actually. I'm the youngest of five kids and I grew up in Northern Wisconsin. So for any Green Bay Packers fans North of Green Bay, so way, way [00:04:00] North. And, um, The funny part was is my father was a dentist and an orthodontist, so he was He was one of the only orthodontists in about a hundred square miles in Northern Wisconsin.
Dick Pfister: So, uh, everybody in my family had braces and I knew all the people who had braces. If you can remember this, this is really the origins of why I got interested in finance. I love this. In the sixties and seventies, when they used to do fillings, dentists used to do fillings in either silver or gold. When I was a young kid, I was probably about six or seven years old.
Dick Pfister: I was going to go paint stripes on my wall in my bedroom. My parents didn't know about this, but I was going to paint stripes. So I went into our garage. In our garage, we had this workbench. Under the workbench was a bunch of paint cans. And so I went to go get some paint cans and I pulled out two paint cans that were in kind of the back row and I opened them up and the first one had silver coins in it.
Dick Pfister: And then the next one had gold coins in it, and I didn't really [00:05:00] know what they were. So I ran inside and talked to my mom. I said, Mom, what, what is this? She said, Oh, no, no, those are just daddy's coins. Just put those back, put those back. And by the way, I'm painting my walls. She said, You're not painting your walls.
Dick Pfister: So when that happened, I, as time went on, I found out why my dad had bought gold and silver. So one of my uncles is pretty big in the hedge fund industry. His name is Tom D. Mark. And he had told my father that inflation was going to be here to stay in the seventies. You should probably go get some more gold.
Dick Pfister: And he bought gold Krugerrands and silver. And that intrigued me enough when I was a kid to be interested in finance and why that worked and why that didn't work. All of the different reasons of why you want to have exposure to different types of asset classes. So that was the start of it. That's amazing.
Dick Pfister: Yeah. I went to school at university of San Diego and that's, um, got a business degree and then traded on the floor of the exchange for Dean Whitter. So a firm that probably a lot of your listeners know of, but [00:06:00] they were the largest futures clearing firm in the world back in the early nineties. So got involved in financial futures, commodity futures, uh, Understood the world of hedging and speculating, but quickly realized that the best managers who understand risks were back in the day, they were called hedge fund managers, you know, they're diversified non correlated managers.
Dick Pfister: So really got hooked on the world of alternatives, best of breed, great risk adjusted returns that led me back to San Diego. And my predecessor firm was a platform that allowed access to the world of alternatives is called Altegris. And that stood for Alternatives, integrity and risk management. We came up with that name together, and then we grew that firm in the early 2000s, we ended up selling it.
Dick Pfister: And this kind of leads me to the story of how I launched AlphaCore. When we sold Altegris, I was at the time, the youngest of four partners, and I was still looking to continue to work for the long run, right? So [00:07:00] I actually sat down with other investment advisors. I said, okay, I'm going to sit with some of the biggest names in the local San Diego community and ask them what they would do.
Dick Pfister: Cause I'm going to still work a hundred percent of the time. Tell me what you do with our money. So I sat down with my wife in front of, you know, kind of the, the, you know, the who's who in the world of wealth advisors. And, uh, for the most part, They were all decent at gathering information, kind of, okay, where's your money?
Dick Pfister: Where's the custody? What do you want to do? Do you want to retire? Do you want to save for college? You know, what are your plans? That was kind of wealth planning, financial planning 101 that I think that most people are pretty good at. It's kind of the table stakes to get in wealth advisory today. But when it came to trying to achieve those goals from the investment side, I felt that the way they were doing it was antiquated their answer to me.
Dick Pfister: And these were kind of the, the biggest and the best in the space was we're going to put 60 percent of your money in equities and 40 percent of your money in bonds. [00:08:00] And, and ironically for me coming from the alternatives world, I thought that was too risky. I was like, wait a minute, you're going to 60 percent in long only stocks, and then you're going to put 40 percent in bonds of earning 1%, maybe.
Dick Pfister: And, and so. I said, there's gotta be a kind of a, I'll call a third leg of the stool that we can diversify this with. And I knew that world of alternatives. So I sat down with my wife and I literally drew out a chart and I said, okay, we're going to put diversified alternative strategies at the core of our allocation.
Dick Pfister: Right. And that will be things like private equity, private credit, private real estate, but we'll also put non correlated strategies like global macro, long, arbitrage, trend following. That'll be our diversified strategy. Alpha core, right? And then we'll put traditional stocks and bonds around that because we still believe in the ingenuity and creativity of the world.
Dick Pfister: So we still want to have exposure to that. We'll just call that traditional or beta around the alpha. And that's how alpha core [00:09:00] got started. Okay.
Stacy Havener: First of all, there's so much to love in that story. Not the least of which is that your dad's strategy for saving these gold and silver coins was the paint cans.
Stacy Havener: I mean, that is so good. That is priceless. Wow. That's amazing. Okay. So I want to come back to that alpha core literally because it is so different. But before we talk about that, Altegris was a great firm. Now, everybody says, like, oh, democratizing alts and, you know, getting access to the managers. That's like a thing.
Stacy Havener: But you were really a pioneer there. I mean, I can remember going on the Altegris website and the amount of education and white papers that you had created was phenomenal. I guess it's kind of in your story, but the shift from floor trader to To Altegris asset management, but you know, sell side to buy [00:10:00] side, like talk about what that, that must have been really different.
Stacy Havener: Talk about that journey a little.
Dick Pfister: Yeah, no, you're right. Um, thank you for saying that about Altegris. I had some great partners. We caught lightning in a bottle. We had the, you know, we were putting private placements on a public website, which sounds, you know, of course you do that. But back in 2002, nobody had done that.
Dick Pfister: Right? So we had an ex SEC attorney. That was a partner that really do. Really innovated along the way with the sec to help build and create no action letters and everything else that some of the largest platforms still rely on today. So yeah, my partners were excellent in helping us grow that. And so I'm really thankful for them.
Dick Pfister: The part that we're going from the buy side to sell side to the buy side was I became a client, right? I had a liquidity event myself, right? And so, uh, I'm looking out for my own family and I'm looking out for my, my wife and my children and saying, okay, what do I want in a wealth advisor? And it's what I call our, I [00:11:00] want the best of both worlds.
Dick Pfister: I want the best in financial planning. I want to know how to establish a trust, how to plan for estate tax issues you might have. If I want to do charity, I want to do, I want to understand the best ways to do that, how to provide. That type of wealth planning advice to clients. And for me, the very first client of AlphaCore was me.
Dick Pfister: So, so we, we definitely eat our own cooking here. The next side was, okay, once we do all of that, if we do some complex tax planning, which, which a lot of clients need or from different levels to another, but once you do that, if you go to the investment side and you don't marry that with high level.
Dick Pfister: Investments, you've just negated all the great planning you did on the other side. So to me, you've got to match, you got to have the best of both worlds and the vice versa. If you come at it and say, I'm only going to look at the investment side, I'm going to put the best of the best. We're going to, and we have traditional stocks and bonds and alternatives.
Dick Pfister: We're going to blend them together. But you missed it [00:12:00] on the tech side. You might've, you know, it caused some issues for your clients. So you really have to marry these two. And that was the idea of AlphaCore and becoming going on the buy side of the business. And the great news is, is that there's so much more talent that's accessible today than there was 10 years, 20 years ago, you can get.
Dick Pfister: Even an accredited or non accredited investor in some great money managers. It just wasn't available. You know, so I, I'm really excited for this, you know, 2024 here we are. I think that the next 10 years is even going to be more innovation in the space. So it's exciting times.
Stacy Havener: Yeah, very exciting times. I love the comment that you, you sort of built the business around yourself as the client.
Stacy Havener: I mean, so many founders can relate to that. And I wonder how does that show up in your own client base? So do you find that your story, like, so let's just take this to the extreme, all the, uh, founders who exited and Finn, you know, in Financial services, investments and fintech [00:13:00] call alpha corpus are like, well, Dick, you know, I, that's who I identify with, like, is there a niche that you find yourself
Dick Pfister: serving?
Dick Pfister: It is interesting. There's definitely, we have some money managers that are current money managers, clients. We have X money managers that are clients. That's definitely part of it, but it crosses into different sectors. So. Any kind of business owner, entrepreneur, somebody who's founder, um, who went through some sort of liquidity event, or maybe, or they've just saved over time and they've now got sizable, sizable liquidity or net worth.
Dick Pfister: There's a philosophy that resonates, and this is another small story that, but I remember it well because I had a client who had owned the largest coupon manufacturing company in the country and he sold it. He was from the Midwest and, and he was great. And he, and he, so he had a great big liquidity event too.
Dick Pfister: And he came to me and he said, he would call me Fister, right? My last name, he was great. He goes, I'm in the end zone. Don't ever put me on the 20 yard line again. That still sticks [00:14:00] with me. And so our philosophy generally is if you've saved up sizable money, you shouldn't have to try and hit home runs as much anymore.
Dick Pfister: You've, you just have to compound at a consistent rate without taking big drawdowns. And so we built the, we write this white paper called winning more by losing less. And if you can, if you let's imagine your goal and your financial plan is, okay, you need to make between six and 10 percent and you will outlive your money, which is a lot of kind of bogeys for most people, depending upon inflation where we're at.
Dick Pfister: Right. So if you have that as a bogey, but you have your. The sequence of returns is really important with that. So if you start out that venture and trying to reach that number and your first year, you lose 50%, we've got a lot of catching up to do, right? So for us, that kind of mentality of don't put me in the 20 yard line again, is really near and dear to our hearts.
Dick Pfister: And a lot of our clients feel that same way. It's okay. There's, I don't need to match the SMP every [00:15:00] single year. So we're trying to get. Two thirds of the upside and one third of the downside and over time, because you will, you'll compound it a much more consistent way that actually works out much better for the client.
Stacy Havener: Yes. I love that. And I love that mantra or tagline or that that client gave you what a gift because it says it all doesn't it? It's great. So. So that's a good dovetail back up to what you talked about in your back story, which is the idea of flipping the traditional asset allocation model on its head.
Stacy Havener: And I want to talk about that in 2 ways. 1, just the idea of it, because I think, It makes sense when you talk about it, but it's so counterintuitive if you've grown up in this biz, right? Because core satellite to you, alpha core, I mean, something very, very different than it does to every other advisor who's building portfolios.
Stacy Havener: So [00:16:00] let's start with that. I want to pull it forward to the clients because I wonder how that yeah. Shows up for them, but just when you made that switch, how did your team receive it? Like, did you have to, it's a, it's an attract and repel kind of a move. So just talk about that a little bit. Like, did you have to explain yourself at every turn?
Dick Pfister: Yes. No question. It's a, it's a, It's a venture in education all along the way, not only to the client, which is obviously probably the most important person you need to make sure they understand what they're getting into, but also our advisors, our client service team, our compliance team, our research team.
Dick Pfister: So, you know, it's interesting. I think that the way. You know, allocators will look at the markets and eventually clients will look at the markets is it'll be public markets, private markets, correlated and non correlated that will be eventually the way people will start to look at things. Now it's hard to move that huge ship and turn it because.
Dick Pfister: The way the [00:17:00] world works, at least from traditional media is you listen to CNBC. You're going to hear only about the equities. You might hear about some bonds sometimes, and, you know, you hear about long only strategies, and that's kind of how you hear that over and over and over again, you don't even know that there's necessarily non correlated strategies you could access to, but I do believe it's gone.
Dick Pfister: Large way over the last 20 years so that people can actually get access. So recently, obviously private credit has started to tremendously grow and same thing with private equity. I think that's going to happen with the world of long, short or multi strategy. There's a whole host of other strategies that people in my mind deserve the access to.
Dick Pfister: Not like you're forcing them into it. It's like, Hey, you need to have this in your portfolio because it's going to improve your risk adjusted numbers and then give you a better chance of reaching your financial goals. So. That is just a mantra. What happens is a lot of our advisors that are attracted to us, they understand it.
Dick Pfister: They may not have the bandwidth or the team to do the [00:18:00] research and implement it. So we've had advisors join us because we have that expertise. And then it's the same thing you said about when we were at Altegris. It's just a matter of demystifying it. And showing a client and showing an advisor why it makes sense in a portfolio.
Stacy Havener: I want to pause right here for a second, because that's so good. And I want to just talk about it from what it does. Like when you put a message out there to the world, that's very, I don't want to say polarizing, but very attract and repel, meaning some people are going to be like, buy into it and love it.
Stacy Havener: And some people are going to say, no, that's not for me. And you've been brave enough to move forward with that, which makes your marketing very powerful. I think the perception for a lot of people is, oh, well, you do that to gain clients, but you hit on something really important, which is you also do it to gain teammates.
Stacy Havener: Right. Who are bought into this. And so I wonder when you started talking about that, or when word got out or however, it [00:19:00] was, you know, kind of. Communicated to the broader industry. Did you find investment people coming to you and saying, Oh my gosh, I love this. Like, this is exactly how I wish we were doing portfolios where I was before.
Stacy Havener: Like, was it a real pull?
Dick Pfister: It's a natural filtering mechanism, right? Yeah. You get people who are. Their disciples, they like that philosophy or they've seen their clients kind of go upstream and then they lose them to somebody else because that somebody else or other firm has access to alternatives and they implemented it.
Dick Pfister: And it's natural. The larger your net worth becomes, the more you want or, or desire diversifying return streams, whether that's private real estate or private credit, or are the others we mentioned. It's almost by nature that you, as you grow as an advisor, as you. Your experience grows. You're going to want some of these, call it quote, unquote, more complex, more sophisticated strategies for your clients.
Dick Pfister: The hesitation always becomes [00:20:00] well, a few things. One is it's not easy to learn about them. You've got to study, you've got to do your research and due diligence. The other part is operationally. It's still not as easy as clicking a button to put your clients into stocks and bonds, right? So. You have to be able to build scale with this philosophy, and that's everything from from the research through compliance to the operations, filling out sub docs, then making sure the clients can see them in their client reporting system or on their statements.
Dick Pfister: So all that part of it is sometimes the hurdles for advisors to integrate, and we've spent the last almost decade now. Make perfecting that methodology and workflow. So it makes it much easier for the advisor to kind of plug in and actually get access just like they would a traditional stock or bond.
Stacy Havener: Yeah, that is so great. So, I mean, I think we've hit on your differentiators and again, that's usually the most difficult thing. For a fund manager or an advisor or really any business to identify, but you sort of built your [00:21:00] company around that alpha core, that differentiator. So you kind of owned it from the get.
Stacy Havener: Is there anything else you'd highlight that you'd say? You know, I always think about it. Like, if you look at your peers, they do this and and we don't, we do this over here. Like, is there anything else that jumps out to you that you want
Dick Pfister: to share? I think there's other ways to generate alpha. So we, most people think of alpha in regards to return over a benchmark or something, you know, delivering in, in the investment side of what we do.
Dick Pfister: But alpha for us has really expanded into, do we have the best client service? Can we pick up the phone? Can we answer when they call and deliver really high level white glove or alpha above other client service firms that are out there, right? And that same thing happens with with our marketing, with our business development.
Dick Pfister: We do things that are called, we call it the core connections, right? Every single month we're in a different city and we're doing cocktails and hors d'oeuvres [00:22:00] with our clients in all the cities, right? So, and then we're inviting in different speakers. We might have a speaker about on AI, or we might have a speaker about planning or whatever else.
Dick Pfister: And that, those are things that are just, they're broader. They're more. People related and which I think in a lot of ways is more important sometimes in the return stream that they got. Obviously that's, it's important too, but we want to make sure that it's complimented with really good people skills.
Dick Pfister: Gosh,
Stacy Havener: I like want to spike my mic on that one. It's so good. And you know, some of it is really old school too, because what you're hitting on is like, well, first of all, I love the redefinition of alpha, like the expansion of it. That's awesome. But the old school part for me is like, Hey, guess what? People do business with people.
Stacy Havener: I don't know. I mean, simple. Sure. But really powerful. And also to your point takes, it's not easy. It's a real commitment to travel to these cities, to set up these events, to bring in [00:23:00] the speakers. Like that's a lot of work that people aren't willing to do.
Dick Pfister: It's funny. Some clients, when we have our meetings with them, others quarterly and monthly, they don't even want to talk about investments.
Dick Pfister: They only want to talk about, okay, is everything going the way you thought it was going? Yes. It's going the way I thought. Now let's talk about your kids. Let's talk about your passions. What do you do? Do you ski? Do you golf? Well, you know, that's, that's what we're talking about. And that's what really they're most of the trust in my relationships are about that.
Dick Pfister: That's the exciting part of what we do in the fun part of what we do.
Dick Pfister: Why do you
Stacy Havener: think that's so difficult for investment people to grasp and do? Like really, it's really tough for them to talk about it. And I don't know if it's because, so is it because for a certain generation, like we've grown up with being told like, that's not it, right? It's about the performance and it's about the investments and it's about like the complexity of what we're doing and all this stuff.
Stacy Havener: Is it that we've been trained that way? Or is it just [00:24:00] like, We're a bunch of introverts in this biz. And it's just hard for us to actually do anything. So
Dick Pfister: that's a great question. Yeah, I do think it's our comfort zone, right? If you are a quant or you're interested in math and, and you could say, well, look at this managers annualized at 12 percent with a 4 percent standard deviation, you must love this.
Dick Pfister: This must be good. You, why wouldn't anybody love this? You know, and I, and a client might be coming in the door just. Just say, do I have enough money for college? I mean, for my kids, that's all they care about. You know, it's like, so there's a disconnect, right? And, uh, and you have to bridge that gap. You really do.
Dick Pfister: And that's why we use like, like, I know you're a huge advocate of this, but it's a storytelling part. A bridge is the gap. You know, you want to have the goods underneath the cover. You, Oh yeah, you still have to understand what you're doing, but you have to have the storytelling to bring people in. I
Stacy Havener: agree.
Stacy Havener: It brings it to life. Like nobody said delivers that statement. You just the math person just delivered in your story. Like a client doesn't [00:25:00] receive that and their heart explodes and they're like, I must work with this firm. It just doesn't happen. Right? Like, and that's really where that by starts is in the heart.
Stacy Havener: And then it's like story led and then data backed, like you need table stakes. You gotta be good at what you do and you need the data to show that, but it's not what engages people and it's not what. Makes them hire you.
Dick Pfister: That's right. And some people have it innately. It's, it's unusual to find the innate person that has it, but sometimes you can take somebody who's got all the EQ and talk to them and say, Hey, why don't you come up with a story, right?
Dick Pfister: You, I'm sure you have a story, right? You have something that's relatable and you can train, like we have a. A group of planners, CFPs on our team that we're training to become hopefully junior advisors and potentially senior advisors, right? So that's part of the training is, is teaching them how to tell a story, right?
Dick Pfister: And that's what engages the client eventually. And
Stacy Havener: speaking of stories, not to just totally geek out on it, [00:26:00] but on your website, you actually have a page dedicated to client stories. So I, speaking of heart explosions, I was like, Oh my gosh. This is everything because this is one of the stories we teach our clients to embrace, which is you can talk about your process and you can talk about all the things we've kind of talked about here, what makes you different and all that stuff, but to bring it to life using a client story or what we call an impact story, like showing the impact you've made.
Stacy Havener: That is so powerful. So, I mean, have you always done that? Is that a newer
Dick Pfister: thing? It's been a newer effort for ours. We obviously had done it in person, but we wanted to codify that in videos. And so a lot of our advisor team, these were real stories, right? They generate real client interactions that they are solving some sort of generation one to two.
Dick Pfister: Legacy planning and you're solving a business owner's issues. Those are the things that we're doing every [00:27:00] day. So it's important for us to articulate that to existing clients and in potential clients that we're, this is what we're doing. And it attracts other advisors too, because then they understand, Oh, we're not only about generating alternative alpha with alternatives, right?
Dick Pfister: That's not all that we're about. Right. So, um, it's also important for us. This, this is kind of a segue into another area that we're, we're very passionate about is. Almost 60 percent of our staff are women and we're finding, yeah, it's pretty crazy. I didn't even realize it until recently, but, uh, and we have a good group of women advisors.
Dick Pfister: We're finding that a lot of families, the wife is actually making most of the financial decisions currently, or if the spouse passes away, they're going to be doing it. So we're really involved in that. And women in wealth webinar coming up that we're doing. We have it in our summit that's coming up in September.
Dick Pfister: We're gonna have a women's panel. So that's become more and more important. The demographics really suggest that that's, you know, what people need. And so we're, we're excited about that. Um,
Stacy Havener: hi, another mic [00:28:00] drop moment. No big deal. Unbelievable. That's awesome. I mean, high five. That is so great. And how few financial firms could ever say those words.
Dick Pfister: I have two daughters and a son. So my oldest are two daughters. And, and I always tell them, and one of them is, I think, interested in what we do. So yeah, it's still, I think only 20 percent of our, of people that are in finance or women. So I think there's so much opportunity, obviously more than 50 percent of the country is our women.
Dick Pfister: So, yeah. There's a huge gap there. Huge gap. It needs to
Stacy Havener: be kind of filled. I love that. That's so great. And it's so great that it made me lose my train of thought. So what were we talking about right before that? We were. Oh, I know what I wanted to ask you. Okay, so you were the first client, so to speak of Alpha Corps.
Stacy Havener: But how did you grow your business? Well, first of all, where are you now in A. U. M.
Dick Pfister: So we have just under three billion in assets.
Stacy Havener: Okay, so three billion. And how did you get
Dick Pfister: there? Yeah. So we launched in 2015 and the good and the bad was I understood what we [00:29:00] did wrong at my old firm from how to scale a lot of the times, especially in the early two thousands, the way we'd scale is we'd hire a lot of people, right?
Dick Pfister: To solve operational issues, to solve programming issues, anything like that. So when I launched in 2015, I said, I'm going to start this differently. I want to build for scale as a client. I want to have what I consider the best in client reporting, the best of financial planning, and the best. The best in bringing those the data together, so I can digest them in a very easily understandable way.
Dick Pfister: I wanted to see private placements right alongside my public equities and public fixed income, and I want to look at it from a rate of return perspective and an IRR return perspective. I want to see all of it. All right. And. Then if I want to talk to somebody about my plan and see if I'm still on course for my financial plan, I want the best in financial planning.
Dick Pfister: So I started to say, well, what do we need to do that? Well, I need a great CRM to kind of house that. And I need that to be expandable so it can grow over [00:30:00] time. So these things all. Cost a lot of money, right? So I was taking every dollar of profit and putting it right back in to build up the tech stack and then build out the team around that.
Dick Pfister: So the first kind of 2 people that I brought in were research and operations. So I wanted that kind of as the groundwork and then. We just started expanding on each one of those. So, uh, the team now is about 40 people and growing. And with that in mind, now we've got this skeleton of each division that continues to expand and grow.
Dick Pfister: So we're building up, we build up some training modules for each one. We build out some career pathing for each one. And we have seven core values at AlphaCore that. That I wrote down about six years ago. And the first one is do what's right for the client, right? So that's our guiding principle is do what's right for the client.
Dick Pfister: The other six are, they're pretty, you know, they're how we treat each other at AlphaCore, how we treat each other as a team. They're about looking for win win [00:31:00] solutions. Checking your ego at the door, keeping things fun. There's, and I think when you have that, as we recruit people and as our clients see that they, it attracts like minded people automatically with that type of value structure.
Stacy Havener: I love that. So that's how you built the company, which is great. And I love the idea that you built it with scale in mind. Because I think a lot of firms, to your point, they hire people and then they reach a level where they're like, um, you know what? We can't just keep hiring people. Like, what are we actually doing?
Stacy Havener: What are our SOPs? Like, then you've got to unpack it all and you've already sort of, you've got all this infrastructure and overhead. So that's great. How did you build the client base? Like, how did you grow your AUM?
Dick Pfister: So I was fortunate to have Call it a 20 clients that were came to me very quickly from people I knew in the industry and friends that I knew.
Dick Pfister: A couple of them were centers of influence. One is a local attorney that works [00:32:00] with some large construction companies and he's been Big advocate for what we do and how we do it. So that was a great center of influence for us. That expanded to some CPAs as well, locally. So we started to get more lead flow that way.
Dick Pfister: And then our client base has become our biggest refer. So our clients become clients they're there for 12 months. They like what they see and then they start referring others. That led us to become a part of one of the largest referral networks in the country. I won't name the name, but they're part of a.
Dick Pfister: We're part of that. Uh, and that's been a big referral source for us too. So I kind of think of it as three pillars of growth. As I look forward, a third will come from our own centers of influence. And that's really been the lion's share up until now, our clients and our existing centers of influence. And then we've got another third coming from referral network as well.
Dick Pfister: And then the other third will be from strategic M and a that we do going forward. So we're looking for like minded, talented advisors to [00:33:00] join, but we're not just acquiring. for acquiring sake, we want the right people for the right reasons and the right geographic locations as well. So that's the way I see it going forward.
Dick Pfister: I couldn't have imagined when I put out like a strategic plan when I launched, I didn't think we'd be at this place this fast where we found ourselves lucky. And I mean, I guess the harder you work, the luckier you get. Right. So, uh, There's still a lot of grind going on
Stacy Havener: here. Yeah, no, you're grinding, you're hustling.
Stacy Havener: And, you know, for the people who are in the, the first prong of your three pronged growth strategy, so their organic growth, and you mentioned referrals, did you ask clients for referrals or did, did it just happen naturally?
Dick Pfister: For me, I would ask clients for referrals, but for other advisors that I have on my team, that's not necessarily easy.
Dick Pfister: I think we've trained in a good way. These things like core connections, these events that we do, they make it easier, right? Because you're saying, Hey, come and bring your friends with you. Right. [00:34:00] And, and that is a natural, much more natural for an advisor to say, you know, you're happy. Why don't you bring your neighbor or bring your friend?
Dick Pfister: And, and that makes it easier for the ask. Yeah. And that's been helpful. That's, that's helped
Stacy Havener: a lot. That's great. Okay, so now I want to take it to the third prong of the growth strategy because you mentioned that you're doing some strategic acquisitions and for people who follow you like me, they may have seen the press that in January, you had a strategic investment from a partner.
Stacy Havener: Can you talk about that? And kind of the vision for this next phase
Dick Pfister: of growth? Yes, of course. So the partner that we took in is a strategic minority partner named Constellation, and I had been looking for a strategic partner for about a year and a half before this happened previous to that. Like I mentioned, all of our P and L would go right back into growing and acquiring.
Dick Pfister: I personally funded. We had some family office that were for invested in Alpha Core, the parent company as well that helped us [00:35:00] get to where we were. So I'm very grateful for them. But we were ready to go to the next level to bring in some more sophisticated institutional capital at the same time. I didn't want to give up our executive team.
Dick Pfister: I still wanted to maintain control. I still have a lot of runway left for me personally, and I love what we're doing. I love coming in every day. I love the team we've got. So I wanted to continue that and expand it. But when you're looking at strategic M and A, These advisors that have built up a advisory practice or they're leaving a firm, they want to know that you've got some heft behind you, right?
Dick Pfister: They want to know that you've got a balance sheet behind you. And I totally understand that. So I went on a search, lasted, like I said, about a year and a half and really found an incredible firm in Constellation, you know, run by a guy named Carl Heckenberg, who's, who's pretty well known in the industry, but He also brought on a team with him.
Dick Pfister: That's phenomenal, right? They really, truly help when we ask for their help. Um, everything from modeling to [00:36:00] marketing to, uh, tuck ins and staffing and everything else that goes with that. They're here to kind of help us with best practices and growing for where we want to go to. So that allows us now to go out and talk to advisors who want to.
Dick Pfister: Grow further, or they're looking for a succession plan. There's a couple of different reasons why an advisor might join. And we've found that, you know, if they're like minded and what we, and like what we do and how we do it and the people and the call it the plumbing that we've built out, they're eager to come on board.
Dick Pfister: And we're going to be expanding that over the course of the next three years. Three to five years as well. So we're looking to do two or three acquisitions a year. And, you know, with, with these, like I said, like minded advisors, um, we've got now the, the leverage to do that, which is really exciting for us.
Stacy Havener: Okay, so I love this. I have a question though. I'm big. I'm putting myself in other people's shoes. So let's pretend I'm an advisor and I'm listening to this. I'm like, this is awesome. And Dick's awesome. The team sounds great. I love La Jolla, all the things. [00:37:00] Okay. But I say, Oh my gosh, there's one big problem.
Stacy Havener: I've built a business around 60, 40. And if I come to Alphacore, I mean, like, first of all, I have to say to my clients, just kidding. Like, how do you help them with that? So it's
Dick Pfister: not a one size fits all, right? So we do have, we still have clients that come to us that are not ready for whatever reason to incorporate non correlated return streams.
Dick Pfister: So what I found, though, is most of the hesitation around that. Is a lack of understanding of what these strategies are. So if you start to peel back the layers of why they believe in only 60 40 or what has been the hesitation, well, sometimes it's, well, I don't have QP clients. I really have less than QPs and I didn't know that there was anything that.
Dick Pfister: You could access that was less than QP, or was there any quality in the mutual fund space or the interval fund space? And if we start showing him, no, there actually is some [00:38:00] high quality now in those spaces. Now that maybe it wasn't true 15 years ago, but today the best of the best is now accessible in that, in that world.
Dick Pfister: But when you get above QP, a lot of times. You start to say, well, why wouldn't you look at does, don't your clients have private real estate? Yeah, they, they do. They have multifamily. They have, you know, their own personal residence. Well, okay. Well, there's private real estate strategies with literally the best blue chip managers in the world that we can show you that will help them diversify.
Dick Pfister: Don't your clients do or need a 10 31 exchange? Well, that's an alternative strategy as well. Well, what about your clients? How did they make their money? Well, they owned a business. They sold it. Well, guess what? That's private equity and you could access a thousand names, right? So you start to peel back the layers of the onion and they start to realize, Oh yeah.
Dick Pfister: And yeah, my client does have that. He just doesn't hold it with me. He puts it with somebody else. And all of a sudden all the guardrails start to come down when you start to explain things.
Stacy Havener: So you don't need advisors when you say like minded, you're [00:39:00] talking more values alignment. Et cetera. Not necessarily that they've already done this really innovative switch to core satellite with all it's at the
Dick Pfister: middle.
Dick Pfister: Yeah, no, they don't have to do that full switch and that's definitely not the case. It we're, we, we definitely want to talk to everybody. I would say there is a group of advisors who says. I don't believe any alternatives will ever make money for clients ever. So now that's probably, we're not, we're probably not going to philosophically align with those guys, but I just have a fundamental, but that's attract and
Stacy Havener: repel, right?
Stacy Havener: Cause listen, we're not for everyone. That's right. Right. We're not for everyone. And I think. What's great is you're at a place in your career and life that you can own that, but it's very challenging for people to, you know, it's especially when you're building, you're like, well, but money's green and, you know, I'll take it, but you realize that just not all money is right for you.
Stacy Havener: Not [00:40:00] all clients are right for you. And it's kind of freeing. When you realize that,
Dick Pfister: yeah, you don't want to, you know, bang your head against the wall too much and try to convince somebody who's got, it's their way or the highway. I mean, to me, that's part of the issue. That's an ego thing. And it's not a necessarily putting the client's best interests first.
Dick Pfister: So, you know, there, you can go through, Hey, well, how did you feel in 2022 when 60, 40 did really poorly? How'd you feel during COVID? How'd you feel during Oh eight? I mean, I can give you all the reasons why you want some non correlated return streams. Bye. If they're dead set on, it's long only is the only way.
Dick Pfister: Um, we've got, you know, we have just a philosophical divide. That's hard to cross.
Stacy Havener: Yeah. You know what else I love that you just did? And I don't know if you realize you're doing it. You're asking questions. Oh, yeah, you're asking questions. You could just point out, you know, you could make statements. Well, what about, you know, you're, I almost asked a question there, you know, like in a [00:41:00] way, you must have got smoked.
Stacy Havener: Like, I mean, you could be like super direct and make a statement, but you're asking a question. How did you feel in a way? That's right. And then no one can see that because it's a podcast, but then like, you know, button it up and stop talking and let them talk. So I don't know if you realize you're doing that, but it's a brilliant way for people listening to this to engage clients or prospects is to ask more questions, even though you feel like you're pitching.
Stacy Havener: Mm. Hmm. It's really not
Dick Pfister: about you. Yeah, I totally agree. I think that's part of when you're sitting down with a prospect or a client, most of the meeting should just be asking questions and you can't give them advice unless you really know the whole story and the goals and what, what are their hot buttons?
Dick Pfister: What are they afraid of? What are they excited about? All those things. And that's part of, that's what a good financial planner will do. That's what a good advisor will do. The investment side comes second, right? A lot of times. People will, the, the hook for somebody to [00:42:00] come in the door. I was like, well, you guys, you guys know alternatives and we're like, yeah, we know, we know all of it.
Dick Pfister: And we're, we consider ourselves experts, but before we go there, let me ask you a lot of questions because I can't tell you where to go with alts unless I know everything about you. Right.
Stacy Havener: Totally. It's almost like that doctor mentality. It's like, yes, I know that's what you want, but hold on a second. Let me do an assessment of the whole person, the whole portfolio, kind of your mindset and all the things.
Stacy Havener: I love that. And there's a stat, I don't know what off the top of my head, but there is a stat that says after a meeting, like if you asked like a prospect, you know, was that a good meeting? The biggest determinant of that is how much they talk.
Dick Pfister: Yeah. I would agree with that. I agree with that. It's, it's almost like any relationship, right?
Dick Pfister: It's with you and your husband or your wife, your kids. Yeah. It's about how many questions you're asking them. Are you letting them talk? Right. I have to stop myself with my wife sometimes just so you know. Okay. [00:43:00] I just need to listen here. I have friends
Stacy Havener: that like, um, and I don't know if this is just me being introverted sometimes too, but because asking questions can sort of be like, Keeping people here.
Stacy Havener: So I had some friends where, you know, I would talk with them and I would ask tons of questions and we'd hang up and then they'd call me back and go, hang on a second. Like you didn't tell me anything about what's going on with you. I realized you just asked me questions for an hour. And now, you know, so it, but it is, I mean, I hope they still thought the conversation was great, but they called me on my questioning.
Stacy Havener: Yeah, that's great.
Stacy Havener: Okay. So a couple more things I want to talk about, but one of them is, To talk about the journey a little bit. We've done that a lot. How, like what surprised you or given that you've already, so you had an exit. So this is kind of round two for you. Like what surprised you about take two of building?
Dick Pfister: I think when you start, after you've done something like we did with my previous firm, [00:44:00] that, you know, this time around, it's going to be so much easier.
Dick Pfister: And, you know, I know all the things, the do's and don'ts and, and, you know, We're going to smooth sail through this and it's never quite that easy, right? There is still a day to day grind of hiring the right people, managing the right people, markets move this way or that way, you know, there's always that.
Dick Pfister: You got to still love doing it because if you don't, you're not going to make it through those really hard times. For me, it's like surrounding myself with really good people. The first one, the real true advocate for me was my wife. She was the one who said, you got to go launch this business. You're going to be successful, go do it.
Dick Pfister: Um, and so I had that in my back pocket, right? I have somebody behind me who's advocating. And then I brought with me the team members that I knew would also be really value add. So I've got. A half a dozen team members from my old firm. They've worked with me for 20 years. Oh, that's great. They kind of [00:45:00] formed the baseline of, of our team.
Dick Pfister: And, and then we just kind of built out from there and, and that's, those are really helpful people who can help prop you up, you know, not everybody's happy every single day, right? Not everybody wakes up optimistic dealing with the stuff we deal with. So you got to have those people around you to help when you're having one of those days.
Dick Pfister: And so that's been really, really helpful.
Stacy Havener: Yeah. And it's true personal life and professional life, right? Like you really need both because if you're a significant other doesn't get it. Can you imagine? I mean, it's just, you gotta have that person who's like, I get what it's like to be an entrepreneur. Even if it's not their gig, they get what you're going through and they're there to support you.
Stacy Havener: And, and likewise at the company too. So that's really, really powerful. I would love to ask you some questions. To help us get to know you a little bit better. So you may know this show. I feel like sometimes I'd say this show and people are like, [00:46:00] why? And then I feel really old. So I stopped saying it, but do you remember, do you remember James Lipton's inside the actor's
Dick Pfister: studio?
Dick Pfister: Yes. Yes. I love that show. That was a great show.
Stacy Havener: And so bring all these movie stars on. So you're kind of the movie star here. And I'm James Lipton without, well, I'm wearing black, but I'm not as
Stacy Havener: but he had, he, you know, he did a version of Proust's questionnaire and he would ask them questions. And these questions were sort of designed to help us get to know you as a person. So I'm going to start with a relatively, Yeah, we're gonna baby step into these. Okay. Okay. All right. First one. What book inspires you?
Dick Pfister: You know, there's a book that I've actually bought in given to quite a few people and it's, it's by Ryan holiday. It's called the obstacle is the way I love all of Ryan holidays books, but that one in particular is, [00:47:00] you know, all of our team members have read it. My kids have read it. My wife's read it and you can read it once a year, right?
Dick Pfister: You kind of just take it out and read it every year. It's basically saying that something bad happens to you. It's an obstacle. It's something that's gotten your way, but change it into something positive. I love that. Because that's the way to get through life and you can get better from. So he goes through some great examples of people that have done that.
Dick Pfister: Some very famous people, some people not so famous. It's just a great book in a mentality. I gotta
Stacy Havener: reread that one. I have to reread that one. I have this one of his, which no one ever talks about. Maybe people didn't like this one. Perennial Seller.
Dick Pfister: Oh, yeah, that was one of his first ones. Yeah, that's a great one, too.
Stacy Havener: Yeah, kind of a classic, right? Big Ryan Holiday fan, so that's a great one. Okay, so moving from books to places, knowing that you live in a beautiful part of the country, this should be an interesting one. What place inspires you? What's your happy
Dick Pfister: place? It's not really a place. It's really being with my wife and my kids and, [00:48:00] you know, all of us having a good time, having a dinner together, you know, maybe it's outside somewhere and discussing the day, the week, the month, I've got a daughter who's in college now, so she's not with us all the time.
Dick Pfister: So when she comes back, we always have a great time. I've got three kids and we just have a great time. So anywhere we go is fun. We do a lot of skiing together in different areas. And that is a great time for me when we're all, we're all together telling stories is really, really fun. That's
Stacy Havener: so special.
Stacy Havener: And it's true with it. I have a six year old, so I'm not here yet where you are. But like they say, you know, your kids kind of, you have them when they're little, and then they sort of go away a little bit. And then they come back as they get to be older. And it's really magical. I mean, I feel that with my own mom over and dad over the last few years.
Stacy Havener: So yeah, that's very special. Okay, now a bit of a fun one. So you were a movie star when we started these questions. You're now well, you can still be a movie star. Um, but you've been asked to come and speak to a stadium of thousands of raving fans. [00:49:00] They're all here. They love AlphaCore. They love you.
Stacy Havener: You're about to take the stage. What song do they play as your walkout anthem?
Dick Pfister: Yeah, this is an issue. I'm a big music fan. So I like a lot of different genres of music, but But I am a child of the 80s, so I have to say it's got to be Eye of the Tiger, which is Survivor. So, it could be Don't Stop Believing, but too many people use that one.
Dick Pfister: So, Eye of the Tiger is one of them. But, you know, having teenage kids, You have to throw in a current one, which more be Jack Harlow or somebody like that. That's kind of cool. See that, that would be really cool.
Stacy Havener: Oh, yes, that would be cool too. But I mean, I have the tires unmistakable. Like those first few bars.
Stacy Havener: Yes. Yes. Okay. What profession other than your own, would you like to attempt?
Dick Pfister: Uh, you know, what got me out to California was I had a Navy ROTC scholarship. That's how I ended up in California. [00:50:00] So I've always been intrigued. I don't know if I could ever have done it, but I would have loved to gone through Navy SEAL training, obviously way too old and never been in that kind of shape, or I don't even know if mentally I could have done it, but I always think of those guys as just amazing mental fortitude to do what they did, just unbelievable.
Dick Pfister: Now, the fantasy is to be a lead singer in a band. That's what it would have been like, right.
Dick Pfister: I could have been Bono or something. Bono would have been great. Can I be Bono in
Stacy Havener: this? You are. That's so good. Okay. So flip of that question is what profession would you
Dick Pfister: not like to do? I think it's anything where you're isolated by yourself. I like to be with people. I like to have a team and have interaction.
Dick Pfister: And, you know, you look at some, if I was like an IRS agent, I don't, I don't think I'd like that. Right. And I, I don't think today I'd want to be anything [00:51:00] in the political world, just because of what's going on. So those are things I'd probably steer clear of, but. Any sort of team stuff where you can be a leader or a part of a team that's growing and that, that you can do in a lot of different areas of sectors, like economy.
Dick Pfister: So those are exciting to me.
Stacy Havener: That's so good. And also the state you live in, if you were an IRS agent, it'd be really, you
Dick Pfister: know, you'd be busy. You'd be busy.
Stacy Havener: All right. Last question. And I know this is not anytime soon because you've said multiple times there's a lot left in the Dick Pfister story. But what do you want people to say about you after you've retired or left the industry?
Dick Pfister: He was a passionate, kind, ethical, honest leader that did good by their clients and team members. To me, that's. That's all I can really leave is that do what's best for our clients and our team and be honest and [00:52:00] transparent all along the way. That's those are, those are the things that I hope I'm doing every day.
Dick Pfister: And I'm trying to teach my kids to do that as well. So sounds crazy. Those are, those should be kind of, um, personality traits that you, everybody should have, but. This day and age, it's, uh, kind of unusual, unfortunately. Yeah,
Stacy Havener: so well said. And I'm sure there are many people saying those things now. And I might add, you've really shaken things up.
Stacy Havener: Like, I don't know if you see yourself as an innovator, but Really, when you look back, you know, as somebody sitting outside, um, when you look back at your career, you've done some incredibly innovative things.
Dick Pfister: Thanks for saying that. I feel like we're touching the tip of the iceberg right now. We've got a lot more to do, but.
Dick Pfister: These are things that are, seem like they should be obvious. So I don't feel as being an innovator. I think that, you know, these, our clients and in our team deserve to have the best, the best that there is out there. And [00:53:00] sometimes that's in a wrapper that is illiquid and sometimes it's not. But, uh, to me, it's just delivering the best to, to all of our clients.
Stacy Havener: Oh, you're doing that, Dick. Thank you so much for being here. It's been a pleasure to chat with you and I know our listeners will love the stories you've shared today. Thank you so much.
Dick Pfister: Thank you so much for having me.
Stacy Havener: This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Stacy Havener: The information is not an offer, solicitation, or recommendation of any of the funds, services, or products, or to adopt any investment strategy. Investment values may fluctuate
Dick Pfister: and past performance is not a guide to future performance. All opinions expressed by guests on the show are solely their own opinion and do not necessarily reflect those at their firm.
Dick Pfister: Manager's
Stacy Havener: appearance on the show does not constitute an endorsement by Stacey
Dick Pfister: Havener or Havener Capital Partners.
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