While some advisory firms may overlook clients with little to invest outside of their retirement plans, Matt Scarborough and Oak Wealth Partners see opportunity.
Located 60 miles south of Washington D.C., Scarborough’s firm has found notable success serving mass affluent clients—many of whom are federal workers—whose wealth is largely concentrated in the Thrift Savings Plan, 401(k)s and other workplace accounts.
In a recent conversation with SmartAsset CEO and founder Michael Carvin, Scarborough said his firm has added approximately $100 million in assets under management (AUM) in less than three years through its partnership with SmartAsset.
About 60% of that AUM belongs to clients with IRAs or taxable brokerage accounts, which Oak Wealth Partners manage directly for a fee. The remaining 40% belongs to clients with held-away assets who pay an annual fee of $365 for advisory services, Scarborough said. These are the clients who are often underserved by the financial advisory industry, he said.
“But we’ve built a recurring pipeline now of business because we’re stepping in, we’re managing the money inside the qualified plans, at which point they separate from service or hit 59 ½, the money is getting rolled out onto our fee-based platform,” Scarborough said.
“And that’s how you build a sustainable practice.”
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Interview Transcript
Michael Carvin: Hi, I’m Michael Carvin. I am the CEO and founder of SmartAsset, the world’s largest marketing platform for wealth management. Joined here today in our Advisor Success Series [by] Matt Scarborough. Thanks for joining us, Matt.
Matt Scarborough: Absolutely. Thank you for having me.
Michael Carvin: Matt, I would love to start by just hearing about you and your background, how you got into wealth management.
Matt Scarborough: Sure. So, [I was] born into it. My father has been in the business for 44 years, and so I grew up around it. And I know there are a lot of people that grew up around family businesses, and that’s the complete opposite of what they end up doing for a myriad of reasons. But ultimately, you know, I started with the very menial tasks in terms of doing research, client filing—all the things that make these types of firms run—when I was very young in my high school years. And I really developed a passion for the ability for advisors, advisory firms, to help individuals.
That was really the genesis of kind of the passion for the business. You have to be passionate about this. You have to like what you’re doing. That ultimately plays out in terms of the experience you can give clients. And so my dad had sold his business in 2013 and attempted to retire, and I can tell you that he was bored to tears. It was something that I knew I wanted to do when I got out of college.
So I went to the Hotchkiss School, which is a college prep school in Northwest Connecticut, and then I went to college at Babson College, which a lot of people don’t know because it’s a smaller school, but it is the No. 1 school in the world for entrepreneurship. And I’m getting to live out that dream now, which is wonderful.
My dad and I started Oak Wealth Partners in 2018 as I was preparing to graduate from college. We built that business from the ground up. I think we’re a little bit different than most advisory practices that are focusing on the high-net-worth side. We’re the complete opposite of that. I want government employees. I want people from the sheriff’s office. I want people that ultimately don’t have a lot of places to turn for good advice, because the vast majority of their net worth tends to be tied up in these held-away accounts until they reach separation of service or 59 ½.
For most advisory practices, those aren’t the clients they want to seek out, because there’s no meaningful way to make money in that sphere. So when we started our practice in 2018 down here in Southern Maryland, we focused specifically on federal employees to start. We have a very large naval air station. The D.C. metro, as you can imagine, is chock full of federal employees. They are the poster child for what I just described to you in terms of the vast majority of their net worth is tied up in their TSP, and they just don’t have anywhere to turn because until they’re 59 ½, they’re really not an ideal client for an advisor.
What we do is we step in during their working years, help them make the allocation decisions and changes within their Thrift Savings Plan. By doing that, we’re one, helping them garner and gather the assets that they need to be able to retire and retire comfortably, while also addressing all the other issues that most advisory firms are looking to address—in terms of making sure that the clients have gotten their trust and estate work done, making sure that they’re being the most efficient from a tax perspective.
As you well know, there are a lot of things in the retirement planning sphere that can be done improperly. I always say that planning for retirement is the culmination of a lot of small good decisions, or small non-decisions or bad decisions. And so, if we take a look at that, we just find that people don’t have the information they need to make intelligent decisions. I deal with some of the most intelligent people I have met in my life in my course of what I do, but managing money isn’t one of those things.
Between monies we’re managing on the outside in terms of traditional IRAs, brokerage accounts, and monies that we’re managing within held-away 401(k), 403(b) and 457 plans, we’re managing over half a billion dollars. And we did that from 2018 to now.
Michael Carvin: Congratulations.
Matt Scarborough: Thank you.
Michael Carvin: So that’s obviously a lot of growth in a relatively short period of time. Before you met SmartAsset, how did you go about finding new clients and growing your business?
Matt Scarborough: One of the things that has worked well for us is doing educational programming, and you have to have the right skill set to do it. Like I said earlier, this is an incredibly underserved community in our small corner of the state, but we have clients all across the country. The story is always the same, right? It’s—we know the problems that participants have, so we’re laying out—okay, as an example, most people know that there’s an amount of money that they need to accumulate to be able to retire and retire comfortably, but nobody ever tells them how to calculate that.
We go through that in the educational programming that we do, which helps, ultimately, somebody figure out where they are in the process. People have this vague idea—”Well, I think I’m okay”—but none of it’s data-driven. And so by delivering value to them in terms of giving them a target for what they’re going to need for their retirement, then you start to impart value for them, and in doing that, they see the value of the advisory relationship.
Ultimately, the challenge is getting people in a room. And, you know, truly, there are going to be people that aren’t seminar people. And we’ll get to the SmartAsset piece here in a minute—that’s really where that fits into our model. But there are people that do want to come out for the educational programming. You know, I know when we started doing our seminars down here outside the naval air station that we’re co-located next to, we had close to 60 people in the room for the first one.
There was a huge demand that was here. The town where the naval air station is has the fourth-highest concentration of investable assets over a million dollars. And there’s not really a serious advisory firm here—other than us—for the reasons I described to you earlier. These clients aren’t worth anything to a traditional advisor until they turn 59 ½.
We see building our practice as more of a long-term play than trying to make a quick dollar. Look, we all love it when we have a client that comes in the room that’s got X amount of dollars, it’s all outside. We’re transferring all the money, we’re taking on the management from day one. That’s great.
But we’ve built a recurring pipeline now of business because we’re stepping in, we’re managing the money inside the qualified plans, at which point they separate from service or hit 59 ½, the money is getting rolled out onto our fee-based platform. And that’s how you build a sustainable practice, and that’s how you build a half-a-billion-dollar practice in six, seven years.
Michael Carvin: With your success with seminars, what led you to partner with SmartAsset? How were you thinking about that—were you trying to augment your marketing? Was this kind of during COVID and seminars got harder to do?
Matt Scarborough: I think it’s a couple things. I think it’s augmenting, for one. Like I said earlier, not every client is a seminar client. You know, for me personally, I wouldn’t go to a seminar. And there’s a lot of other people that are like me. And so we knew that was the case. SmartAsset is ultimately a tool for us to find other people that might not fit within that sphere but certainly still need the help in the same way that those federal employees do.
And so, we’ve really had a lot of success with that—specifically in getting people that are in our local community linked up with us. And I’ll say the other positive aspect about that as well is that, like I said, there are very few investment firms in this part of the state and, because of that, our ability to convert SmartAsset prospects to clients has been really good because frankly, when they are using the platform they’re not getting paired with anyone locally other than us. And so, that’s been really helpful in getting to have those conversations with people, going through their situation and hoping to impart some value for them.
Michael Carvin: I heard a rumor Matt that you had a good month last month. What happened?
Matt Scarborough: We had a pretty good month last month. We closed over $10 million in new business on the platform. It’s SmartAsset putting us in front of people that need help, and us being able to fill that need. And so, you know, we’re happy—certainly—to have a $10 million month. Not every month is like that, but I will tell you that we’ve had a very good streak of very fruitful months using the platform.
The ROI is so significant that I don’t have to sit down and worry about calculating it—unlike a lot of other platforms I’ve used. So I think that says a lot. I’m averaging bringing in $25 million in AUM off the platform every year.
The key though, for a lot of these things, is one—you have to use the tools that SmartAsset provides. Use the automations to your benefit, but you also have to call people. Don’t expect to sign up $25 million worth of business every year and not pick up the phone. The ability for the advisor to put in the legwork, reach out to the clients—then you’re setting parameters.
“Hey, let’s just have a conversation. Let’s sit down and take a look at your situation”—getting to that point. And then also, too, from that point forward, it’s setting expectations from that point in terms of: if you don’t have a decision to make today, that’s fine—that’s the case for most people—but setting a follow-up meeting, setting a follow-up call. I find that far too often, people will have these introductory meetings, and then they don’t set that second step. And they just leave the lead in ambiguity. They don’t really force the conversation.
You’re going to get a couple answers. It’s going to be: yes, we’re going to do everything; yes, we’re going to do some of the things we suggested; or no. And then if it’s a no, you figure out why. That’s what helps you improve in terms of the advisory experience.
Michael Carvin: Do you know the total amount you’ve raised through SmartAsset?
Matt Scarborough: It’s been about two and a half years that we’ve been on the platform. It’s around $60 million. Yeah, it’s pretty significant. And that’s just monies that are on the outside in terms of brokerage [accounts], IRAs, monies that we’re managing fee-based.
On top of that, and really the pipeline that we’re building, is the held-away assets in the TSPs, 401(k)s and 403(b)s, which is probably about another $40-some million. So you’re talking about adding $100 million in cumulative assets to the firm—some of which we’re, you know, frankly billing on and making traditional advisory money on today. The other part of which, you know, when we step in and we manage 401(k)s, 403(b)s or 457s for clients, we charge $1 a day. It’s $365 a year.
And you tell people, it’s like—”Look, we both know that I’m not going to get wealthy charging $365. But here’s what I do know: we’re going to step in, and we’re going to professionally manage the assets. Chances are, we’re going to do a better job of it than you are doing this in your spare time. And if we do that, at which point you separate from service or turn 59 ½, that money’s coming over to the fee-based side.”
And so, it’s setting that expectation too with the clients. I mean, we’ve built a feeder system, and about 10% of our held-away assets get rolled into fee-based every year.
Michael Carvin: I just want to make sure I heard that correctly. The total amount, when you look at it all, what’s that number?
Matt Scarborough: About a hundred million, total.
Michael Carvin: In 2 ½ years. Wow, between yourself and your father, that’s exceptional.
Matt Scarborough: That’s just me.
Michael Carvin: That’s exceptional! What are you spending on a monthly basis with us?
Matt Scarborough: So we’re spending $2,500 a month. And you know, we are getting—like I told you—if you ask me what our ROI is, it’s a lot. I don’t know. I can’t quantify that for you, because I haven’t had to. And you know, we’ve used other lead gen platforms, and what you guys are doing in terms of the value you provide—from the content you create, for one, to get the clients in the door—but two, is that [we’re] getting legitimate prospects. These are legitimate people who have legitimate problems.
And this is something that, as we look to continue to expand and hire other advisors in other markets, SmartAsset is frankly going to be a very key part of that strategy. It allows us to break into these new markets before you start having your referrals, before you’ve really established notoriety in that area. It’s essentially—you’re using SmartAsset to open up a new market for you, and then the referrals and those other things come to you. But it’s allowing advisors to grow their practice—and not just in their locale—to start opening practices in other areas as well. And that’s really what we intend to do.
Michael Carvin: Really exceptional numbers. If you’re all in at $100 million and you’re spending $2,500 a month—so that’s $30,000 a year. You know, $100 million raised on $30,000 a year—that’s extraordinary work. That’s really exceptional.
What I like about that, Matt, is that means that you’re offering our consumers something they really need and want. Because you can’t have conversion rates that are that high unless you’re serving something that they really value. Can you talk about some of the tactics? Are you using our outreach automation product? How frequently are you calling? Are you texting, emailing? Tell us what’s making you successful.
Matt Scarborough: Yeah, so we are using the automation platform. And I will tell you that being proactive in making the automations fit your practice and your ethos is important. I went through, and the templates that were in there were great, but I did modify [the] timing. I changed a lot of the messaging and said: “Look, you’re going to be hearing from other advisors who are certainly fully able to help you and capable. Let’s sit down and talk about why we’re different—in the scope of some of the things as it relates to the held-away assets.”
We talk about: “Hey, if you have 401(k), 403(b) or 457 plans, we can actually step in and help you manage those things.” So including the value props in the messaging has been important.
The calling—look, the sooner you call somebody, the hotter that lead is, the better your capture rate is going to be. A lot of it has to do with how you deliver messaging. Everybody that I know has the fear of being sold something—even if it’s something they need. Change the way in which you communicate. I’m not trying to sell you anything. What we’re really trying to do is figure out what problems you have and how we might potentially fix them.
My sales come because I help people—not because I sell them something they don’t need. There’s a distinct difference between those two things, and so you have to reflect that in how you communicate via the automations. You have to reflect that when you talk to people, when you leave voicemails—all of that. You have to tie all that together.
I can’t tell you how many people I’ve talked to who have talked to other advisors using the SmartAsset platform, and they’re too focused on the sales. They have, let’s say, half-a-million-dollar minimums. I don’t have minimums. Why have I been able to grow my practice so large? Because I help people—whether they have $5 or $5 million. And invariably, karma is a real thing. I can’t tell you how many situations where I help somebody with $10,000, and then I’ve got their parents in my office three months later with a couple million.
Michael Carvin: A real pattern we see among our top providers is that they’re great listeners. They let the consumer really talk through what their needs are before saying how they can help. How are your metrics different? Are you trying to get a certain contact rate, a certain meeting rate, a certain close rate? Is that something you look at closely?
Matt Scarborough: I do. Really, the part that I focus on—there’s always going to be variability, seasonal variability, you’ve got variability with market conditions. But if you look at the metrics that I focus on, which is if we’ve made contact with the prospects, so that’s they’ve either texted us back, emailed us back or we’ve had a phone call with them. Of that, what are we converting to meetings? Of that, what are we converting to clients?
So, if I’ve gone back and forth with somebody, I’ve got about a 75% chance of getting somebody in my office. When I get somebody in my office, we’re closing 65 to 70%, which is incredibly high—as you know—in this industry. But a lot of that has to do with the fact that we’re able to provide value to clients that might not be of value to other firms, because of the fact that the monies are held away.
Now we’re really starting to hit critical mass from that perspective, in terms of now I’m really getting a lot of those held-away monies that are rolling over, on top of the outside monies we’re currently bringing in that are outside on the SmartAsset side. That part of it, frankly, makes our close ratios a heck of a lot higher than firms who aren’t dealing in the held-away asset space.
And that’s also why, at the end of the day, we also market those services to other advisors to help them best use the platform.
Michael Carvin: Tell us a little bit about the kind of client you’re targeting, average investable assets. What kind of needs do they have?
Matt Scarborough: We target a very different client than I would think most advisory firms would be [targeting]. My sweet spot is—I’m looking for clients that have anywhere between $250,000 up to, say, $2 million. And so we’re definitely focused more on the average American, the average corporate employee, the average government employee. Frankly, people that are underserved from the financial planning perspective in that they’re not the most desirable clients for the vast majority of their working career, because most of their money is in held-away accounts. And that’s what we specialize in.
So you know, we’ve been very successful in finding a lot of those people via SmartAsset. We’re stepping in, we’re helping them address the issues that are there when we meet with them, and address issues as they move through their working careers. So it’s been a very mutually beneficial relationship for us and the clients—and between us and SmartAsset as well.
Michael Carvin: And do you have somebody helping you in the outreach—doing the calling for you? Are you doing that yourself?
Matt Scarborough: I do it myself. And so I’m not saying that is the right or wrong way to do it, but here’s what I believe to be true. Yes, could I have somebody on my staff reach out to all my prospects and schedule meetings for me? Sure. But at the end of the day, people are going to ask—and do ask—investment-related questions when you reach out to them. Something that unless somebody has their securities licenses, they can’t answer.
So the ability for the advisor—whether it’s me or anybody using SmartAsset—to use the platform, in my opinion, the advisor needs to be the one that’s calling. Because that’s who they want to start to develop the relationship and rapport with. They’re going to have some pretty specific, pointed questions that are going to help them flesh out whether you might be able to help them or not, and frankly, if you know what you’re doing or not.
Michael Carvin: I’ve got to say, I’m just impressed that you’ve been able to generate that amount of new assets by just calling. What was the number, one more time?
Matt Scarborough: It’s $100 million total. It is $60 [million] in traditional IRA and brokerage-type accounts, and then another $40 million in terms of held-away money—so monies that are in 401(k)s, 403(b)s, 457s—which invariably then come over to the fee side as those clients hit 59 ½ and separate [from] service. So we’ve been very successful in that regard.
Michael Carvin: Extremely successful. Matt, this has been great. Thanks so much.
Matt Scarborough: Absolutely. Thank you for having me. I really appreciate it, and I appreciate what you guys are doing. What you guys are doing is—it’s what, frankly, the retirees in this country need, because there’s a lack of resources and there’s a lack of people to help. And this is something that’s very important to the fabric of retirement in our country. So thank you for what you’re doing.
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