Why ShoreHaven chose to partner with Opto

Transcript

Jake Miller Hi, I'm Jake Miller, co-founder at Opto Investments.

Michael Durso Michael Durso, co-founder and CEO of ShoreHaven Wealth Partners.

Jake Miller Interest in the space is growing, and there are a bunch of shops stepping up to provide access. Legacy players are trying to target markets like yours and reach these high-net-worth individuals that you work with. What differentiated Opto in your search for a partner?

Michael Durso Great question. I think that, you know, when you sit in our seat, so much stuff is thrown our way on a daily basis and a lot of it feels like it's a product push or a sales push. It's this is something that's really interesting because we're either getting paid to sell it, or it's something that we have too much inventory on and we want to get it off our books. We saw that a lot in our previous world. One of the reasons we launched ShoreHaven was to be that independent source for our clients, and again, go back to that fiduciary standard, let's do what's best for our clients. When we think about who we work with in our business, it comes down to partnership, right? We understand that there are access points that we can get from other people, but if we're not getting that side by side partnership, really understanding our business, understanding our clients, making things as simple and efficient for our clients as possible, well then maybe that's someone we don't want to partner with.

One of the things that really brought me to you guys was the expertise of your team, understanding where you came from historically and the firms that you worked for, being that I worked in asset management previously. I have a little bit of a different purview into the wealth management space, which I think gives me a benefit to really understand where these people were previously, what type of businesses did they work in, and did I interface with those businesses? Have I worked with these people previously? Luckily, I had, and I know the type of character and individuals that worked at those firms.

Secondly, was the technology. I think that a lot of what we do at ShoreHaven hinges on technology and again, we're a five-person firm. We're not an enormous entity, but through technology and through great partners, it allows us to operate like a 50-person firm. And I think that Opto really plugs into that with the use of technology, whether it's from a proposal tool standpoint, whether it's from a sub-doc standpoint, even on the capital call side, a lot of the technology is beneficial to us, who is a smaller firm when it comes to the registered investment space. And I think that being able to leverage that technology and leverage your expertise makes us feel really comfortable when we go to clients with a request. If a client asks us something, you're quick to get back to us. And more often than not, it's not just with the answer, but it's trying to find out why the question was asked to make sure that we're delivering on that question properly.

From a product standpoint, I feel like a lot of private and even public market things are things that are being sold to us and not things that we're asking for. And so when we sat down with you guys, it was very consistent with how we think about working with clients. It was, "What are your goals for the private market space? Why are you doing this for your clients? What type of clients do you work with?" And so we sat down and said, "This is what our traditional client looks like. These are the personas of our clients. Let's say there are three different personas. How would you access private markets for each of those personas?" And then let's create a strategy around that as opposed to you coming to us and saying, "Here are the three strategies we have. Let's give them to your personas." And so I feel like it's very simple and very consistent with how we run our business, where it starts with the goals, it starts with the plan, and let's make those investments as efficient and as easy as possible to access, to create great outcomes. And you guys really understand that.

I also think that the ability to do it as a ShoreHaven vehicle and the ability to have a single K-1 direct exposure for clients without any cumbersome nature of, "Alright, I have to go out to ten different managers, ten different K-1s, ten different capital calls processes." That's a lot of work and we would have to probably hire someone to do that for us. For the cost and the management fee that you guys are charging, it is very reasonable to help us from that operational efficiency standpoint and be a real partner in our business that we can grow it together. And hopefully, you know, this is fund one of many in the future.

Jake Miller Not to mention that many of these managers will have minimums in the five or ten-million dollar range. It is actually intractable to build a diversified portfolio. But because you've taken this approach to build a ShoreHaven fund, your clients all of a sudden are going to get access to managers that are supposed to be institutional only. Which gets to your point around, you know, being sold versus seeking. When Joe and I founded this company, we looked at the space and saw a lot of people got paid by the fund managers. We didn't like that. The best funds don't need to pay to raise capital. They're oversubscribed consistently. The best managers really would love to work with the wealth community more. Historically, they've been asked to pay 6 or 7% by a placement agent to do so, and you’re probably not going to do that, even if you really would like to form those relationships.

Michael Durso Of course, I think it takes you away from the client when you do that, right? If you sit down with a client and they ask at the end of the day, "Well, why did you choose this manager?" And it was XYZ. The firm called me and said it was a great manager for me. Well, did you dive in and see what they were being paid to make that phone call, or is it something that really is best for me as your client? And, you know, coming from the space on the asset management side, really knowing some of these managers and being able to say, "Well, why did you choose this manager versus the other manager?" Knowing that that layer of conflict was removed, it's a very comfortable position to be in as the RIA. I'm able to go to my clients and say, "Well, the reason we picked these underlying managers for you through Opto’s due diligence and through ShoreHaven's due diligence is because we believe that is what's going to create the best outcomes for that portion of your portfolio." Not because someone called us and told us it was going to. And I think there's a nuance there, but it's a really important nuance.

Jake Miller It's a really important point. There are not many RIAs that can say what you can, which is, "We're building a ShoreHaven fund; Opto, ShoreHaven, and the clients are on the same side of the table."

Michael Durso 100%.

Jake Miller That's a rare thing today. And with work like what you're doing, we hope to make it less rare.