The Translator by RiskPro

Episode 4: The One Thing RegTech, RiskPro and SoCal Punk Rock have in Common: Nick Scalzo

July 16, 2020 Hosted by Julie Mochan Season 1 Episode 4
The Translator by RiskPro
Episode 4: The One Thing RegTech, RiskPro and SoCal Punk Rock have in Common: Nick Scalzo
Show Notes Transcript

Tune in to enjoy host Julie Mochan talk in depth to Nick Scalzo, CEO of RiskPro's parent company about the origin and development of this RegTech solution.
 Nick then shares quite a bit about his history growing up in Southern California,and the Orange County punk music scene. There are lots of shout outs to many people that have influenced and helped Nick all along the way to his current successes that he shares with his Co-CEO Megan Meade!
 
 Click for More About RiskPro
Office: 949-259-6928
2077 West Coast Highway, Suite A
Newport Beach, CA 92663
[email protected]

Talk to Julie Here or email me:  [email protected]

Mentioned in this Podcast:

Josh Emanuel, Chief Investment Officer for Wilshire Funds Management  In his role as CIO, Mr. Emanuel leads the investment activities of Wilshire Funds Management, including asset allocation, manager research, portfolio management, and investment research. Mr. Emanuel also chairs the Wilshire Funds Management Investment Committee.

Dr. Alfonso Agnew, Professor and Chair, Mathematics, California State University Fullerton  Courses:  Vector and Tensor Analysis, General Relativity, Partial Differential Equations, Linear Algebra and Ordinary Differential Equations
Research Areas: Mathematical issues in classical and quantum gravity -- General Relativity Theory and gravitational radiation, curved space quantum field theory, twistor theory, Non-Hausdorff spaces

This recording has been prepared and made available by RiskPro® to be used for information purposes only. RiskPro® is an investment risk profiling and portfolio construction software as a service platform developed by ProTools, LLC (“ProTools”). The information contained herein, including any expressions of opinion, has been obtained from or is based on sources believed to be reliable but its accuracy or completeness is not guaranteed and is subject to change without notice. Any expressions of opinions reflect the views of the speakers and are not necessarily those of ProTools or its affiliates. ProTools does not provide investment, tax or legal advice. Investors should consult their financial, tax or legal professionals before investing.   Any third parties mentioned in the podcast have no affiliation with the Pacific Financial Group, Inc. or ProTools, LLC.

Music by: Araelia Lopatic

Julie Mochan:   (Introduction)
Hello, everyone and welcome back to The Translator!  My name is Julie Mochan, and this is a podcast brought to you by RiskPro, where WealthTech and RegTech converge. It's July, 2020, and it's been quite a year so far with a new way of going about life every day; wearing a mask, social distancing.
I would like to take a moment to say that my thoughts and prayers are with any of you that have been infected or have a loved one that has been infected by COVID-19, it's a dangerous virus and we hope to get this behind us. I think we're doing very well. The country, you know, coming together while staying apart at the same time. I'm also thinking daily about our young republic. That is experiencing social unrest and violence.  Watch out for Episode #5 to drop later this month, where I interview, my first millennial guest.  So for all of you boomers out there, if you want to hear what a millennial thinks, tune into that one close to the end of this month, it's called Ginger the Millennial.  Anyway, I want you to not just hear from every demographic on my podcast, but actually listen to the stories from everyone's perspective, one that you might not have a chance to experience on your own after all, we are called the translator.
Okay.  Let's get to this episode though, which is, is number four and I'm super psyched for it because it's nearly impossible to get my guests to stay in one place for more than 10 minutes, unless he's strictly talking business, and I want to go way beyond that. So, who knows how long and where this thing will go, because I have none other than Nick Scalzo in the hot seat today. I've personally known Nick for almost five years, I believe, and he's probably one of the most intense people I've ever known or have gotten to know.
As I think back to when I first met him, he was like that the very first time I met him, he's not slowed down for one second or become any less intense than that day. He is, literally going full tilt at all times. Many people know Nick as either the co-CEO with Megan Meade of  ProTools, LLC and the Pacific Financial Group, Inc. or you could know him for his charity work that he's done annually, or maybe, you know him from the RIA that he and his brothers started back in California years ago, or even as a drummer for a Southern California punk band. Wearing many different hats is not a problem for this guy, one of which is a hi hat. Maybe it's a Zildjian, We'll have to remember to ask him that. So anyway,  because we're already short on time and I want to cover a lot, so let's get Nick out here and I'll first ask him about the revolutionary technology of RiskPro, and then I'm going to try and go out there into his past what he's passionate about. We're going to talk some music, hopefully we'll just see how far we get on this one folks.... Five, four, three, two, one. Welcome to The Translator, Nick. Scalzo!

Nick Scalzo:  Hello

Julie:  thanks for being here, Nick.

Nick:  Thanks for having me. It's good to sit down and talk to you.  We need to get more time together.
 
 Julie:   
Yeah, absolutely. Hopefully we'll be able to get to see each other again and soon, you know, you've been stuck on the East coast. I've been stuck on the West coast. Wait, I said that backwards. I'm stuck on the East coast. You're stuck on the West coast.  Whoa.  Dyslexia for cure found.   Anyway, let's start simply with, take us way back to when a RiskPro was first thought of, how it came about, you know, take us way back if you don't mind.

Nick:  (RiskPro history and how it was founded)

Yeah, RiskPro , really kinda came about at the convergence of two separate things. First of all, we had a, multi-manager turnkey asset management platform in. 2006, 2007, we were early movers in the liquid alternative space.

Julie: 
Alright. So you had a turnkey asset management platform. And for those of you listening that don't know what that is. It's often referred to as T A M P the acronym for it, and what you can do with that is you can have a lot of managers "sitting" on that platform for advisors to use and build portfolios with, for their clients.   What was the name of the TAMP Nick?

Nick:  
 Market Movement Solutions or MMS was the name of TAMP, Elements was the name of the company. And we had probably 40 or 50 model portfolios on the platform. And several of those were liquid alternatives. As, I said, we were early movers in that space.  Then, we got hit by the great recession coming out of 2008. Everybody, I'm talking about financial advisers, started really adopting, and, unfortunately sort of experimenting with the liquid alternatives models without a deep knowledge of what they could do to a portfolio and how they actually work. We had a ton of educational pieces, but we started seeing them rebalance their portfolios or bring in new accounts that had outsized allocations to these liquid alternative models that prompted my then current chief investment officer, Josh Emmanuel, who is actually now, Wilshire associates, Chief Investment Officer.  He came into my office and he said, listen, we've got some liability here because we, The Elements Group is the discretionary advisor to the client.  We have the fiduciary liability, except that they (registered reps),  got to use our risk profiling questionnaires, and then pick a variety of models in a unified managed account.
 
 Julie:  So the Elements Group held full fiduciary liability, and the advisors that were utilizing the TAMP,  , were. solicitors. Right?

Nick:  That is correct
 
 Julie:  So that they, would build portfolios and you actually had the fiduciary responsibility to make sure that those portfolios were suitable for the client.
 
 Nick:   Yeah, so they kind of assembled the portfolios together. And we were getting really concerned around the way they were assembling these models together. 
 
 Julie:  And it was putting you and them at risk... and possibly their client.
 
 Nick: 
That is correct. And the Chief Investment Officer said that he wanted to give the financial advisers direct access to himself, our CIO.   I replied, well, how are you going to scale that?  He said, come into my office. I want to show you, I've already built it. And this was very early on. Okay. There were none of these digital risk systems out there or anything. And he showed me that he had built a spreadsheet that had our entire, product shelf on it and that he could assemble in about, I mean, as quick as 15-seconds,  any combination of portfolios,  to target an outcome.  He demo'd it for me and nailed it, nailed the beta, the standard deviation, everything. 

Julie:
Let me ask you a question. He had a spreadsheet, like an excel spreadsheet , an Excel. Yes. with a mathematical algorithm yeah.  That did what, it measured when he would put investments together, what was the outcome 

Nick: 
Yeah.   He would either in those days he would either target a beta to the S &P, he would target a standard deviation, or he would target, a dollar loss threshold. Aha. Okay. So you would say I have a million dollar account.   I never want to see it go below 800,000. So that's a $200,000 loss threshold and it would calculate his beta his standard deviation, et cetera. And then he would go to the product shelf drop in one or more of our model portfolios hit calculate. And it would. Give him his results. And if he was a little bit off, he would, you know, He would adjust. . He would adjust and then nail it and he nailed it to the penny. And I was like, wow, that's impressive. So that's going on sort of in your left hand and your right hand?
 I think it's important to remember that my brother and I own a client facing RIA Claremont financial,
 So I still give client reviews to this day, Julie. And at about that same time, I have these clients that are very dear to me. And they're still clients today, they had, moved to Hawaii from Claremont, where our office was located Claremont, California.  They were really staunch Republicans and thought, erroneously that whenever a democratic president is in, you are not gonna make any money in the markets.  Yeah plus they had gone through 2008 and the great recession. And they called me, in February of 2009. In a bit of a panic that the stock market was on its way to zero.  They forced me to take them out of let's call it a moderate risk portfolio and take them down to almost zero standard deviation. I mean, they were one step above cash so the political atmosphere was causing them to think irrationally because they were emotional. I think, I think going in it was emotional that they were going to lose their retirement and the markets were unstoppable on their way to zero cause remember February of 2009 it looked pretty bleak. And by the way, it should be noted that at we give quarterly reviews to all advisory accounts.
 Regardless of how big they are because we think money is relative, right? No matter how much you have, that's all the money in the world to you.
 
 Julie:  That's super cool, I love that.

Nick:   
Yeah, that's kind of our philosophy. and so these people actually had a lot of money and I, was giving them quarterly reviews and I was  gently trying to coax them into taking on more risk in the portfolio that the clouds had passed. And it was time to, come back out into the sun. They rejected that at every turn. And Julie no matter how hard I tried, and that was four times a year for several years, they would not add risk to the portfolio and then came the fateful day and I'll never forget it. It was within 24 hours of, you know, the CNBCs of the world.

Displaying with cheers that the markets had now reached a new, all time high. And the phone rang within 24 hours questioning why we missed it.

Julie: 
Why yeah. Why you missed the, the uptick, why you couldn't call the bottom? I know every advisor in the financial industry, that's out there listening to this has been in a situation, if not exactly the same, very, very similar, especially if you lived through a market like 2008 or 2011, where, you know, investor behavior of fear and greed. It's human nature.  It's really tough when you're going through it, right.

Nick:
 
 By the way, I've lived this one. cause over a 30-year career, there's been several ups and downs, right? So I've lived in a lot, but this was the last time I was going to live this one because interestingly, while I love these people, it blew me away that within 24 hours of seeing that the markets had made a new all-time high, I'm getting the call asking how come we didn't participate in the rebound.
 So we got past that, but I went into, really sort of vent to my chief investment officer. And I sat down and said, you're not going to believe this. Well, right at that moment, he actually had that spreadsheet I told you about on his computer and he was working on it. And so he had kind of one ear on me, you know, just let me vent. I don't even know if he was paying attention. And I had an eye on his spreadsheet as I'm venting and I looked and I said, that needs to be on every advisor's desktop, you know? because as I said earlier, it would display with a 98.6%. forward-looking statistical probability, your max draw down over any 12-month period,  and then I started to think about that and I said, I could get the client to sign off on. And I don't know, Julie, if you saw the first iteration of RiskPro, I would call it the prototype.  We didn't have a risk profiling questionnaire attached to it.
 You just simply walked in and typed in your max gain loss over any 12-month period. And it calculated from that then the system would tell me the advisor, how much beta is standard deviation and so forth to put in it. And then, you know, it's loaded with the product shelf and it was like, wow, this is like a virtual CFA on the spot. So, it was kind of, I'm not a big fan of the term, but it was kind of that "aha moment".  And I said that needs to be on everybody's desktop. And that was, that was the inception of RiskPro. 
 
 Julie: 
Yeah, and then there was the voila moment when the developers actually created RiskPro, and, all the blood, sweat, and tears that went into it. Uh, we'll just skip over that for now. Hey, now there's RiskPro. It can be on everyone's desktop.

Nick: 
Actually, the software industry is a whole different animal than the TAMP business, or the, client facing advisory space. So yeah, so there was some blood, sweat and tears there, but. We took a, unique path on, on that, and we went out and interviewed broker/dealers and heads of RIAs and did a bunch of market intel.  Figuring out what their biggest liabilities were that they didn't have solutions for.
And first thing out of their mouth every time was rep as manager business is the one that keeps them up at night. and then I brought up to them. Well, what about when the, when the advisor assembles more than one model into the same account aren't they back in that role? And they said, 100%, we didn't even think of that. You know, they were thinking if the rep is selecting models, that the home office is okay, that they don't have that liability. And I questioned that because whole reason, RiskPro came about what, or at least half of the reason that came about was because the reps were actually putting together models, awkwardly in some cases,

Julie:
Right, and I didn't ask you this and I wanted to a couple minutes ago; documentation, because I did an episode, an interview with Jenny Devlin and Jeff did one with Chris Mills. You could have a methodology, but if it's not documented, it's not there. So could you just touch on that for a second?

Nick:  
 Yeah. well, I think actually I would say it a little bit differently that, you know with a digital risk system, you're absolutely documenting it. So you better have very sound math, right? Because you are leaving a virtual paper trail, so it better be right on the money. And that, you know, that would explain Julie, I don't want to go down the rabbit hole, but that would explain why, at least in the early days, the due diligence process was such a long process.  Because all the managers had to do due diligence on the mathematics, in the system, all the broker/dealers and RIAs had to get their arms around and understand it.  Make sure that we weren't inventing math, so to speak, where we're using generally accepted portfolio construction principles in our mathematics. And we passed the due diligence test every time. And I credit a lot of that to, not just Josh Emmanuel, but, just for a belt and suspenders Julie, we brought in a guy that was on the team that won a Nobel prize in 2017. Although we brought him in earlier than that, that was kind of a happy, later achievement in the gentleman's career. But we brought in Professor Agnew, who's a PhD in math and physics and had him, for lack of a better description, certify the math and write a white paper on it. And that actually sped up the due diligence process with the asset managers and the, and the consuming broker/ dealers and RIAs.  alright.
 
 Julie:   Nice, that's um, I just lost my train of thought, but I wanted to ask you went along with that. If I get it, that's

Nick:   is it four 20 over there already?

Julie:  Wait, it's only three 50 here - Right. Do we want to talk Perpetual Suitability or no?

Nick: 
Yeah, I think, I think we do because there's several different. business models out there, right. And in the early days I flirted with the, they call it SAAS, right. Software as a service SAAS. And that's where you go. And you, you sign up you know, one advisor at a time for a monthly stipend, and give them a license to the software.
And I looked at that and,

Julie:  Like a seat fee.

Nick:  Yeah, well, yeah, or license fee or whatever, you know, think of our competitors, you know, they're, they're selling it at the advisor level. And to me, that sales cycle was in those days because the remember, digital risk assessment tools were not  fully adopted or accepted in the industry.
 What I wanted to do was I wanted to improve. The advisor client communications by introducing client accountability in the process.
 I wanted to do it in a way that actually mitigated liability and not only liability for the advisor but I also, I really wanted to mitigate if for the broker dealers and independent RIA.
 Suitability liability. Because as I said, when we did that market research, we knew that that was their largest unmitigated liability. So what we did is we designed and trademarked a system of Perpetual Suitability, and that's to say, you know, an advisory, you know, know your customer, but we all still kind of call it suitability.
 Right? I'll say it differently and brokerage, it has to be suitable at the point of sale. And then, and then it can drift away and, and sort of, your risk can wander off, up or down. In advisory, you're a fiduciary and to, you're getting paid a, life of the asset annual fee, usually in basis points.
 You're expected to maintain that suitability. So what we did is we designed the system to take the holdings every night, run them back through the algorithm and make sure that the accounts stay in an acceptable drift parameter and there's a rules engine where the home office can set what is considered permissible drift. So when we did that, the broker/dealers started adopting it firm -wide and then mandating its use. And I really have to cater to three layers, right? The broker/dealers are my customers, the RIAs, the financial advisor is, a customer. And the end investor is a customer and, you know, really wanting to leave a mark on this industry and fix something that I viewed as heavily broken.
 It, it just blew my mind. Julie, that, in an industry this big, I mean, this is the epicenter of the global economy. This is the grease that makes the whole engine turn in the capital markets, right? And yet the best we had, and before RiskPro was you take a client through a risk profiling questionnaire and you score them into a risk profile, like "moderate".
 
 Julie:  Right, archaic.

Nick:  
 Okay. I asked my clients, what does that mean to you? You should have heard the varying answers, they were all over the map. A middle of the road, little of this, little of that. I mean, it was all over the place. 
 
 Julie:  I've heard 60/40. I've heard everything for a moderate. Seriously.
 
 Nick: 
Yeah. Well,  let me just comment on that 60/40 business. The average 60/ 40 portfolio in Morningstar's database in 2008 lost just over 30%. That was the average, I believe. Okay, I'm quoting 12 years ago. So bear with I'm a point or two off, but if you think about that, the S&P only lasts like 37 and a half 38, something like that.
Where was the protection on the 40? you know, you only lost seven more points being all stock. Where was it? Protection. Well, what  a lot of people didn't understand was it depends on what type of fixed income you're putting in the portfolio and whether there's residual equity beta or not.
So the 60/40, you know, that's simplicity is mythical to me. Okay. So the term moderate, right? The definition, it became very clear to me when I started sampling my clients. And I think that's another advantage by the way, Julie, that we have at RiskPro, is that we have Claremont Financial and 500 end investors that we get. 

Julie:  
 Yeah, you get real time feedback from your brother Gator. You have your finger on the pulse of investor behavior and emotion.
 
 Nick: 
 
 I'm not just guessing from an ivory tower, anyway. One cannot mitigate a liability if there is ambiguity and an element of misunderstanding.
 In other words, moderate. Okay. what you said a little 60, a little 40, and then all of a sudden you have a crash and you only lose 7% less than the S&P itself - that's not mitigating your liability. That's creating it, in my opinion, so you cannot introduce client accountability.
 They don't understand everything, but they do understand "how much can I lose". So when you convey it to them a dollars and then get them to sign for that, you've just removed all that ambiguity.
 So, we wanted to get rid of all of that and clear this up and straighten the line of communication from the end investor to the adviser, to the home office or to the portfolio manager, if it's somebody other than the advisor then to the home office. So that even though, they all speak in different terms.
 It's translated. So that they are all saying the same thing in their own language.   
 
 Julie:  
 Oh, we have a title it's translated. This is The Translator. Right? And I urge anyone who hasn't read this story. Nick refers to this. Jeff does as well as partner as, he uses this story of a UN translator which can be seen on our website.  And also the analogy of moderate to one person  isn't moderate to another person, If it's warm in Minnesota, it's probably 40 degrees. If it's 40 degrees in Newport Beach, it cold. Right?
 
 Nick:
Cause it really just distills down. Everything RiskPro does. It's a communication piece that monitors portfolios away from drift and, for advisors that substantially improves their communication with their clients.

Julie:  (Julie Changes Direction of Interview)
Alright, I'm gonna stop you because I'm going to either make this two podcasts or am going to make this a long one, but I have to get to this other stuff with you because you're such an interesting character. And I said at the beginning of this episode, I gave a little history on how I met you and, and like my take on your energy. And you're an intense person, right? And I know that at any. Point here you could run.

Nick:  Well, as long as the subject matter is.
 
 Julie:  (Nick's life growing up in California)
You've  got a lot to do so, I want to talk about you a little bit about your history.  BTW, anyone who wants to learn more about RiskPro. I have a lot of things on The Translator website, as well as, Nick will actually talk to you. you know, we have a number to get you in touch with Nick  and he'll actually be more than happy to talk to you.
He's down to earth. He's walked in your shoes. If you're an advisor, he's worked with people at every level, big and small and it's, and it really, helps create the character that he is it's authentic, and he is not going to...mince words, let me say that it way.   Nick, before we lose time, let's talk about your family and you grew up in Southern California.
And tell me about  that lifestyle, I guess I'm from Pennsylvania. I have no freaking idea what it's like to live in Southern California. And I would love to hear that from you because I think it makes a big part of you, uh, today. .

Nick
Okay. I feel like I'm the only guy that is told he's intense, that doesn't understand facial idea, but I hear it anyway. So I'll go only as far back as high school. So in high school we did nothing but loiter on the beach. That's all we did. We skim boarded. We surfed. We wore this, probably this probably had two board shorts that we switched in and out of all summer long, I don't remember wearing t-shirts and true to the Italian definition of my name, which means barefoot.
I never had shoes on, obviously until school came, but, I remember reading a book on Warren Buffet in 1985 when I was 16 and I didn't really know. What all the terms meant like price to earnings and intrinsic value and all those words he uses in those books. But it hit me that. I just used the term earlier.
It was the epicenter of the global economy in that I want to be in that game. I would run in and ask my parents what that stuff meant. And they'd give me the answer and I'd run back and keep reading the book. But then, and this was before Buffett was a household name, anywhere. And I actually didn't believe the title of the book or somewhere on the book cover.
It might've been like the subtitle, but I remember it vividly, it said, the first person to make a billion dollars from investing alone or solely from investing, something like that. And, and that intrigued me.
And then I, I was going to Cal state Fullerton and I had aced every single exam and economics. and I saw that I got a C on the report card and that had a financial impact given my Dad's, formula, which I still can't figure out. And I was a math. 

Julie: 
What a good Dad.

Nick: 
And then he just moved the goal wherever he wanted it to go. Cause I never could accomplish it even when I accomplished it. So anyway, when I got the C, I went with the professor, not intentionally, not intensely. I just started out, not intense at least. And I said, Hey, well, you know what gives here I go. I got all these exams that have a visa. You said you were only in my class five days this semester.
 There's no way you aced my course without cheating. You're lucky. I didn't give you an F. You know, something to that effect. And I said, that's it  - I'm out. And
 
 Julie:  
 And so you gave him an F and split town.
 
 Nick
I gave him an F, Yeah. So I left and I got a job, cold calling at, a broker/dealer back in those days, they were called brokers and.

Julie: 
Do you mean like a wire house?

Nick: 
No, it wasn't a wire house. I didn't qualify for a wire house because I left early. So, you know, there are consequences to your actions. Okay. Anyway ,I wouldn't change anything. I wouldn't go back to change it. So I started doing pretty well cause I hustled. And, six months later, my oldest brother joined me and.
His first month, and this is 1991 or two. Okay. His first month as a licensed advisor, he made like $160,000 And that's when we knew. this was it. So we ended up, working together for awhile a long while. and then later on, about three years later, our middle brother joined us.
And he's the gentleman that is running our client facing RIA. Unfortunately, my oldest brother passed away in 2010, from thyroid cancer, which is still a bummer.   

Julie:   Wow.

Nick: 
So then there were two, and that's how we got into the business. And then we converted to fee-based advisory, which was, I think on the, you know, not the bleeding edge of the movement, but certainly the cutting edge.
 And then that led to the TAMP business, then the fund business. Cause we had funds there to Julie and then the software business.
 
 Julie:  (Nick meets Megan Meade)
All right. So tell us quickly how you took that leap of, you know, you started the business with your brothers, you one brother, unfortunately passed you and your other brother were doing very well in the business. How did you meet Megan? Because that's the million dollar question here.

Nick:   
 I happened to be surfing and Fiji, and I was in the, it was a catamaran. I was in the bottom of the boat and I had a email reception, and I got an email from a very lovely lady who has become one of my best friends of all time.
 And I have mad respect for her, Megan Meade from The Pacific Financial Group, and she emailed me and said, I hear you're the risk guy. I need to talk.
 
 Julie:  That sounds like Megan, just get to the point, right?

Nick: 
Well, it turns out actually there was a financial advisor using RiskPro, He had adopted it completely throughout his business.
And he was at one of Megan Meade's Pacific Financial conferences. And Megan had given a presentation and said any questions. And the gentleman raised his hand and he said, what keeps you up at night? And she said, well, I, as you know, because these were all producers for her in the room, she said, as you folks know. I've tried to implement this risk system, which is a competitor to RiskPro. She said, I we've, we've gone back and forth for 18 months. It's cost me a lot of money, but I have to tear it out of the system because the math is broken and we can't get it to work with normal, acceptable, portfolio mathematics.
And he said, have you spoken to Nick Scalzo? He can solve your problem. And, what a compliment, right? I mean, I, that was awesome. When you're one of your customers will say that about you. So she sent the email and then we had a 15 minutes call on the calendar that lasted two and a half hours. I was in Bellevue, Washington, and three days after the call.
And, we built her a custom RiskPro That worked, but not enterprise grade, just to prove the math. We had built that for her at about six to eight weeks. and, it was interesting to Julie because at the same time I had, I had done a deal with BNY Mellon through Pershing to adopt RiskPro and make it available to the a hundred thousand advisors over there.
But they have a very interesting, Let's call it a queue. I think of it more as a padded cell. anyway. they don't tell you how long you're going to be in that, padded cell. And then one day they say you're turning you on in three weeks.
Well, the interesting thing is you need to staff up for that, but if you do that, when they don't tell you how long you're going to be in there. 

Julie:
Right, you could've ended up having too much overhead waiting to get turned on to a hundred thousand possible users, and that's a dangerous situation, obviously.

  Nick:
 
 Yeah. I turned to Megan and I said, hey, I need some advice, one CEO to another. She said, what is it?  Well, I'm going "live" on this deal to up to a hundred thousand advisors in like three weeks, all of a sudden.  And I pretty sure I don't have the infrastructure built out for that. Now, what would you do?  Now of course, Julie, I was "chumming the water" here, seeing if she would take the bait and was interested in partnering with me, but I asked her what she would do.  Would you go get venture capital or private equity money?  What would you do?  And she said, "I would merge and pick me".
 
 Julie:  Yeah!  That's so Megan.

Nick:  And so we did, and we merged.

Julie:  I love that story.
 
 Nick: 
Yeah, well, cause it's true. And then, and then it has a good outcome and a good ending, but we're not at the end yet, but it has, it's been really fun, this far along, So then we, you know, we closed the merger in September of 2017.
 And, now, when you combine all the businesses, we have the technology, we have 15 mutual funds, to RIA and, over 3.1 billion in assets, under management. based on the last time I looked, so it's been a good, fun ride.
 
 Julie:  (Original Orange County Punk Scene)
I'm so glad that Megan found you and replaced what we were trying to make work before with some, with some actual math. She's an amazing person, as you know, and I have her targeted to be a guest on my podcast. In the meantime, I have one more question for you and I don't think we can let you go until I dig into this with you.
So, because you are a drummer, some are in a punk band and because you grew up in the eighties, In Southern California now. You know how much I love music, but I don't know too much about punk. Right. So I know like Dead Kennedys, the Ramones, the Misfits, um, The Clash, Iggy Pop. But I don't really know anything about and didn't know anything about what sort of role that Southern California played when it came to punk music.
I mean, I thought of UK maybe more so than I did the United States,   I didn't know about the Adolescents before I met you, so I think it'd be really cool if you could let our listeners hear, what it is, what's different about punk music. And I know there's all different types of punk music, but if you could tell us  what it's like being in a punk band in Southern California and, and give us some of your favorites.

Nick
Oh.  It was kind of scary, you know, interesting. It all happened when I was in fifth grade. That's when everything hit the scene. And so at that age it was a little bit intimidating, but it captivated nearly everybody in Orange County, like Orange County had its own sort of microcosm, punk, like you know, people still call it the original Orange County punk. Some of the bands that you mentioned were from overseas or back east with the Ramones, CBGB stuff. We had homegrown bands like the adolescents, TSOL, which stands for True Sounds of Liberty. We have Black Flag, and, some other names that I'm probably not supposed to put on the air here.
As little kids, we were captivated by it. We were kinda done with, kind of, we were, I don't know if we were ever not done with disco, but we were ready to move on. And when this came, it was energetic, it was a bit angry, you know, maybe that has something to do with the intensity we talked about earlier, but it, really hit ya.
It wasn't super melodic. you know, some of it when I go back and listen to it, now, some of it just is not, doing for me what I used to do, Interestingly, I actually became friends with a lot of those guys. In my adult life and, and thought of them as heroes or famous people in my, in my youth.
For example, I'm in a band now called the Professor in The Madman. I'm the drummer for, for them in, North America, Rat Scabies from The Damned is their drummer, when they're in Europe and, one of the guys in the band was one of the original members of the Adolescents. Conversely, well, conversely is the wrong word, but at the same time I met Jack Grisham, the front man for TSOL and he comes into my music room and.
We both have agreed, we're going to record some very, a lot lighter stuff. Like the, when he plays live, Jack Grisham with TSOL, he they're still playing their TSOL punk stuff from, you know, 1979 or whatever, but all of those guys, those guys love all kinds of music and everybody wants to kind of write more melodic stuff. out of our, RiskPro offices.  We have a music room there and these guys will come in and ultimately, my vision for that is an Orange County songwriters coalition so the guys from the band Sugar Ray, collaborated with me on the idea and, and these guys are gonna come in and write a bunch of songs.
We just gotta get past COVID to get the thing off the ground. 

Julie:  
 Yeah, it's kinda tough to get a lot of guys together in a room and actually sing thru a mask and socially distance. Oh, well, hopefully that'll be all behind us soon. And I think what I'll try to do is in this episode with some hardcore punk, hopefully,
 
 Nick:  
 Can I pick the Sex Pistols?   The song my Mom walked in our bedroom when we were kids and grabbed the album and threw it away. That one that's how that's, how punk was received by our parents. Back in those days, if they found it, they destroyed it.
 
 Julie:
 I had a very, very similar situation growing up where I had some music destroyed by some conservative parents. God love 'em.
 
 Nick:  
 Yep. We came out alright, didn't we kid?   You know, I actually had a lot more fun doing this Julie than I had anticipated. I was a little nervous, you know? Coming in here and talking about me or whatever, but, you made it really fun. I just was awesome. I'd love to come back. 
 
 Julie:  
 Yaaahoooo- let's do it, bring that good friend of yours,  Megan Meade with you.  I think, due to copywriting, we're going to choose The Professor And The Madman, Chupacabra Man  to spin us out here.  All right. Have a good one Nick!
 
 Nick:  Alright.  Have a great day. 



The Translator Music Credits:
Intro Fade In - Scoopy Newports, by Dolphin Man w/ Araelia Lopatic 2019
Special Fade Out:  Chupacabra Man, The Professor and The Madman (Posh Boy Music 2019)

 Please note that this transcript is created using artificial intelligence, so there may be grammatical robot errors. :)