Frank Byskov | Forty4 Financial

Josh Hile: Welcome to the Advisor View podcast. I’m Josh Hile, CEO of Citizen Mint, a private markets platform built for RIAs and family offices. Each episode we bring on an RIA to discuss their background, client focus, and what makes them differentiated. So today we have Frank Byskov. Um, glad you’re here, Frank. Maybe you can just start off by just telling people about your background and your path into wealth management.

Frank Byskov: Well, it was a little bit of a, um, an alternate path. I’ve been working various roles of, of the financial world, but kind of out of college, got the job I could get, work from there. And it’s been a really interesting journey. But when I finally landed in a wealth management role, about 15 years ago now, uh, it was like, now this is what I want to do. And then, uh, over time, like, I started my own RA 8 years ago, and it’s, uh, it’s the job I’ve always wanted. I may not have known at all times, but it just— it’s a blend of everything I really enjoy, um, both the, um, theoretical portfolio construction, risk management, combining that with the educational and storytelling, uh, with clients. And I think that’s a really good combination. So it’s been an interesting journey for sure, and, uh, and a good one.

Josh Hile: And so what made you leave your previous firm and start your own thing?

Frank Byskov: Um, I think I’ve always wanted to have my own firm. But the big driver was I wanted to do things a little differently. A lot of, um, that kind of incumbent financial firms I didn’t think offered a service that I could kind of mirror myself in. I wanted to add sustainability being a significant portion of what I do, and So yeah, I decided, let’s start my own, let’s do it the way I want it done. And that was, it was uphill battle for a little while, but then all of a sudden things clicked. My messaging got a little better, got in front of the right people. I have an amazing book of clients that I really enjoy working with. So it’s been a great, great journey.

Josh Hile: And what about the name? How did the name come about?

Frank Byskov: I had to come up with one, uh, so, uh, that’s not too much, uh, it was more like come up with something that, um, I could relate to. And 44 has just been a number that has been recurring in my life. Like, I grew up in ’44, I bought a house myself that was ’44, and, um, So it was just kind of like a nice number, and the, the true left 44 Financial, um, kind of, kind of had a ring to it. So not necessarily like a deep thought behind it, but, uh, it was just one that made sense personally.

Josh Hile: Yeah. And so maybe you can talk about your differentiation and like just what— when you’re telling, you know, when you’re talking to a client, what are you telling them that you’re going to do differently for them than another wealth manager down the street?

Frank Byskov: Uh, I’m going to try to, uh, I, I think the best place to start with a client is like kind of figure out like, okay, the financial planning aspect, like what do they get the goals going, but then, um, customizing the experience a little bit to like their values and their goals, their personality. Other advisors do that as well. I don’t think it’s kind of how it should be done. So, but I try to customize the values-based aspect to clients as much as possible and make it a higher service level for clients that normally wouldn’t get access to that level of service.

Josh Hile: Yeah. And then maybe you can talk about just thinking about the clients that you usually work with and is there any certain demographic of client that you’re usually talking to or is there any correlation of clients that you’re usually working with?

Frank Byskov: Yeah, my niche is nice people.

Josh Hile: I like that niche. Yeah, that’s a good one.

Frank Byskov: Yeah, that’s my starting cohort. I don’t have like set asset limits or anything else. I do think financial advice should be accessible across multiple demographics. Obviously, there has to be a business case in it as well. My target is like the mass affluent segment. And that’s, you know, kind of depends on where you live too. And obviously a big portion of that is by definition a high net worth group. I don’t— that limit is kind of low compared to like the terminology. Um, but where, uh, like if you make smart financial decisions, you set yourself up for success. So my very rough definition is those that have some but not unlimited resources. Um, and then trying to bring, uh, some of the options that the ultra-high-net-worth clientele has always enjoyed, bring that downmarket a little bit more. Um, so like, it’s allowed both technology and there’s more democratized access to, to certain more like, um, specialized offerings now than there used to be. And I, I really enjoy that part. Um, obviously it doesn’t make sense for everyone, but where it does, that is an interesting, uh, proposition both for me and for the clients, uh, to really like make a difference, uh, for them and, um, And yeah, it’s, it’s a really good group of people I’m working with, and, um, it’s fun to be able to like offer services that, that they didn’t used to, uh, have access to.

Josh Hile: Yeah, no, definitely. Um, and would most of your clients be considered in the, um, accumulation phase? Or in the distribution phase?

Frank Byskov: Uh, they are mostly in the accumulation phase, um, but I have clients from, I think, late 20s to, uh, to like 80, uh, so it covers a, a good span. But the majority of my clients are still in the accumulation phase, and that’s where, uh, as I mentioned before, the business case comes in. They may not be quote-unquote great clients right now from a, uh, a fee perspective, but there’s potential for them to grow into it where like, uh, it makes sense, uh, over time to, to keep them as clients. Again, I have to like working with them, otherwise that’s a, that’s an uphill battle. Um, but it’s, it’s a fun group. A lot of them are like small business owners, entrepreneurs in various ways, and you just get involved in a different way. Yeah, different levers you can, uh, you can turn. Uh, I do think financial advice becomes more valuable, uh, even for, uh, for a smaller client. And, you know, if they have a nice exit, that makes a good case for me as well.

Josh Hile: Yeah. So how do you kind of build your portfolios around client goals, um, rather than just market forecasts?

Frank Byskov: Um, well, I, I think, uh, kind of having that, that a neutral portfolio to start with and then adjusting from there is a great place to be. Um, there’s a lot of, uh, great research out there, uh, that, uh, that I follow, and then I do a swap, uh, between what, what funds they, uh, or what styles they offer, uh, onto something that I think has a more values-based alignment, uh, but with the same, like, theoretical, um, like, efficient market, uh, style approach. And it’s— that makes for an interesting portfolio construction process. that, um, that allows me to like make a different, uh, be a differentiator, um, and looking at various like, uh, metrics like carbon footprint, equality, whatever matters to the client.

Josh Hile: Um, and maybe you can talk a little bit about that, the values alignment that your clients are looking for and how you actually implement that in their portfolios.

Frank Byskov: Yeah, well, I have a questionnaire sent to all clients which provides a kind of a good starting point as to what really matters to the clients. And then we look at the portfolio. What do they have currently? What can we do to improve on it? What’s really important? Um, while at the same time building portfolio that is— that could pass muster in like a, uh, in financial theory, where it still makes sense from a, uh, quote-unquote greed perspective, um, but, but while still being one that you, you can feel good about holding. Uh, so it is, um I have a starting universe and then like I tweak it for, for clients as necessary. Um, and it is, um, it allows for a deeper conversation with clients as well. A lot of people don’t enjoy talking like numbers and charts necessarily, more like what does represent, what goals does this allow me to reach in my personal life, and how’s this aligned with what the values I believe in, uh, and it becomes some— a deeper conversation at that point, um, uncovering a lot of the questions that they may or may not know to ask. Uh, yeah, so, so I think even from a, like, a planning perspective, having the values-based conversation uncovers a lot of information as to, like, how to build something that is more meaningful for the client.

Josh Hile: Yeah, and so maybe switching gears a little bit, so when do you think for you, you know, this role of private markets is a good place for clients to access or add to a portfolio?

Frank Byskov: Yeah, well, that is, you know, like a longer conversation because my base case is like liquidity is it’s very important, like where you can exit a position if you need to. But when it makes sense to do something that’s more illiquid, more like custom, um, that becomes a longer conversation. Um, and, uh, it has to be obviously a good fit, but I think private markets offer tremendous opportunity. Uh, and we’ve been talking for a couple years, we have still to do the first deal, but, uh, Uh, but that’s a matter of time, uh, more, more than anything, uh, else, because finding that, that right opportunity for a client, um, I, I don’t think is— product markets is less scalable than like the typical portfolio building, uh, and requires more conversation, requires more buy-in, which is both interesting for me and for the, the client because they feel like that, that there’s a different level of involvement. But the opportunity has to be, be the right as well, and for the right sliver of the portfolio. Yeah, so it is, um, it’s an area I paying a lot more attention to now. Uh, so now it’s just a matter of like finding that right fit to really, really get going. And, uh, yeah, I, I have a risk as one of the core, uh, tenants, uh, that I work with. And part of that is I take a while getting comfortable with a new, uh, a new setup. It has to simmer sometimes for like for a really long time before I’m ready to jump in. Yeah. Um, and potentially like kind of over-research the ramifications of something. But then when I do feel comfortable, um, I’m, I’m ready to go in. And some of the investments I have done are, uh, it’s more like they’re not on some of the big platforms because they don’t meet certain thresholds, but I’m really comfortable with them because of the management behind the, the profile, the, the process. More so than them meeting certain financial, like 5 years over X million, uh, AUM. I’m more looking for the process, the people, uh, behind it. And that’s where, like, my comfort zone, uh, is built.

Josh Hile: Yeah, no, that makes a lot of sense. And I think, you know, it’s kind of also what goal or part of the client’s portfolio are you solving for? That’s what I always talk to clients about. I’m like, hey, What are you actually trying to solve for with private markets? And here’s the things I think you should be solving for, like either real diversification so that you’re not as correlated to public markets. And I mean, even looking at fixed income over the last 5 years, it’s been abysmal. I mean, absolutely. Like you can’t cut it any other way. Like it hasn’t produced returns and it hasn’t produced real diversification for clients. Um, so it’s like, and then, you know, on the backside of that, it’s like volatility dampening and kind of like, you know, getting access to parts of the market where, uh, you might not have had access before. Um, especially given how concentrated the S&P 500 is, and actually it’s going to become more concentrated this year. Um, given the SpaceX IPO, the OpenAI IPO, the Anthropic IPO, where you have probably the top 10 stocks you’re essentially 80% correlated to whatever happens in AI at that point in time.

Frank Byskov: So yeah, no, and that, that’s a, that’s a big part of how I, the portfolio construction where like, uh, I think diversification is, it comes in a lot of different, uh, colors. Like even my US large cap, like is diversified in, uh, in approach. You know, I have a market weight and I have an equal weight approach. And It just makes sense to do it. And from a sustainability angle, a lot of clients have questions or issues with their concentration, uh, intact at the top, uh, for various reasons. Uh, so, so I think having the diversified, uh, approach in different ways makes a lot of sense. And that’s, as you’re saying, they’re uncorrelated assets. Really, um, they add a different layer of value. Uh, and you can always talk like, is the S&P 500 the right benchmark to measure against? It’s the one everyone uses, but is it the right one? Yeah. Um, uh, because I, I don’t think, um, sustainability and, uh, portfolios that comes up like, do you give up return? It’s like, well, compared to what? And what, what, what is the return? Obviously there’s the pecuniary, which is a newer word in our vocabulary, the pecuniary return, uh, which is obviously important. That’s why we invest. Um, but it’s not the only return metric. Uh, you can talk like engagement, you can talk, um, uh, access. I had a great meeting yesterday. I’m in a group called Advisors for Good, which is sustainability-focused financial advisors meeting up, sharing best practices, ideas, etc. And someone mentioned on there, it’s like, well, if I didn’t do sustainability— and she does it very customized, uh, to certain— to some clients that have very strong values they wouldn’t even be in the market. It doesn’t matter if they give up like anything compared to the S&P 500, because they wouldn’t be in the S&P 500. And I think that is another like return characteristic of sustainable. You get people off the sidelines that may not want to do it because they don’t like the status quo. And that, that has real value, uh, kind of bringing more people in. Thereby increasing the value of sustainable investing and the impact you can have.

Josh Hile: So what’s the number one question clients are asking you right now?

Frank Byskov: Thankfully, the same one it’s always been, like, when can I retire? It’s not how do I get to $10 million, it’s more when can I retire? And that is um, that really shows the real value. And I think that’s true wealth, is having the options. You can always choose to work more, but having to work more is not necessarily as valuable. But from a sustainability angle, it is, um, uh, both in, um, uh, it’s the tech concentration, it’s AI It is, um, uh, like green hushing, uh, that, that is going on now. Like, a company is doing things that I like, they’re not saying it anymore, but are they still doing it? Um, DEI is now a bad word, but companies were doing, uh, good DEI practices before it was a term. And they’re still doing them because they make sense from a business perspective. And like, looking through the noise and the greenwashing— now, now they might be greenhushing, uh, and not talking about it, but they’re still doing it. And that, that requires a little bit more, uh, research, a little deeper data. But that is where I do think it makes sense. When everything is popular out there, like things get lost. It’s when you’re kind of fighting against the norm, I think that’s when the true value shows. Yeah, yeah.

Josh Hile: Um, what about AI, just in your business practices and how you expect it to impact you over the next few years?

Frank Byskov: Well, that’s one of those I’m simmering on, uh, a little bit. I’m, uh, diving into a little bit, uh, kind of help me with tightening up some, like, letters, newsletters, etc. But yeah, I have some serious concerns about data privacy that I think most advisors do, um, as to what— what— once it’s out there, it’s out there. So like, what do you give it access to? And it’s evolving so fast, it’s hard to like really get, and travel stuff. Uh, they— one thing that will ease my use of AI, which I’m looking into now, is like my custodian Eltrist has an AI assistant, but it’s built from a— with custodial safeguards, uh, which means like a lot of my issues have been answered already. I don’t have to rely on something else. So I think that’s— it is a concern for a lot of people, and there are solutions out there. I think it’ll be a tremendous help over time. Does it solve all the issues? No, but it does create new ones as well. But I, I’m in the conversation with people like, how, like, will everyone be out of a job? Well, that’s what people said when the computer came out, when the internet happened. We evolve. Certain jobs will disappear, others will, uh, evolve. Um, but yeah, I am slowly adopting AI. I do think it can have a benefit, but just because it has AI doesn’t mean it is amazing. Um, because that, that becomes more of a marketing thing. Um, kind of like ESG, uh, funds, it was turned into more like marketing more than like true value. It’s like, okay, we have 10% less oil and gas, we call it ESG. I, I don’t think that has true value. The same, I expect the software providers I use to come out with the best possible product, uh, given the parameters. If that includes like a level of AI— there’s always been some, maybe not as smart, but there was a level of, you know, like technological aid. Now it’s just faster paced, uh, and I expect the service providers to, to offer a good product. I don’t need to have a label saying it includes AI.

Josh Hile: Yeah.

Frank Byskov: As long as it meets the safeguards, uh, and like from data protection, um, but again, that’s in the vendor due diligence aspect and having that trust that they, they safe keep, uh, what we give them.

Josh Hile: Yeah. What about, uh, where you see wealth management headed over the next 3 to 5 years in trends?

Frank Byskov: I do think that technology and AI will help making financial advice more accessible because you can make— it can help you make more clients profitable by having less administrative burden on a client relationship. So I— it is my hope that financial advice will become more readily available to more people. If you don’t have to do as much, you can charge less and service more clients and, and still do it well. So that, that is kind of where I see it. And part of that also, one of the reasons I started my own, own business as well, is the cost compression. I, I do think the traditional model is questionable. Uh, the 1% of assets, is that really the value you provide? Some say, you know, like, you provide more, but finding a better way to get compensated, I do think, will continue to evolve. Uh, and, uh, again, making, uh, using technology to your advantage, uh, can make it more affordable for more clients. Um, so that, that’s kind of where I kind of think and hope the, uh, the industry will go.

Josh Hile: Yeah, yeah. Um, here’s, here’s a little bit of an off-the-wall question I like to ask at the end of these calls. Um, so what’s one thing that people don’t know about you, or one hobby that you love?

Frank Byskov: Well, I, I’ve been, um, uh, like, my lifelong sport is swimming, and something I’ve been— I, I’ve always loved. A lot of people know it, so it’s not like a major secret. Yeah, it is, um, It’s one thing that I still identify with, brings me a lot of joy. And, um, it’s just a great start to the day to get in the pool, um, get a good workout. The arms are hurting all day. It’s a workout I can’t get anywhere else. Um, and, um, uh, if you really search, I even have a couple instructional videos out there, how to do a flip turn and like, okay, let’s do a freestyle world. But you might have to search for a little bit, uh, to find them. Uh, they’re older age by now, but that, that is, uh, one thing I, um, yeah, I, I spend a lot of time on and energy, and it brings even more energy.

Josh Hile: Uh, yeah, that’s great. Well, thank you so much for the time, Frank. Really appreciate your insights and thoughts and, um, Yeah, we’re, we’re excited to have you here.

Frank Byskov: Well, thank you. Thanks for having me. Uh, it was a lot of fun. I look forward to our continuing conversation.