Brunch, hip-hop and avocado toast—many in the financial industry look at these words and see clichéd shorthand for “millennials.” Financial advisor Pamela Capalad, however, sees them as real touchpoints on which to find common ground with prospects and clients.
Capalad is a certified financial planner who, in 2012, founded Brooklyn-based Brunch and Budget, a financial advisory firm whose signature service is exactly as described—she sits down for brunch with groups of people for open and honest discussions about their finances.
What started as a plan to help her friends feel more comfortable asking financial questions grew to be the foundation of her various financial planning efforts; that includes not only her advisory practice, but, with the help of partner (in business and life—the pair are married) MC Dyalekt, a personal finance podcast of the same name (200 episodes and counting), frequent public talks on race and wealth and workshops that teach financial literacy to children and teens using the language of hip-hop (jokingly referred to by the pair as “Schoolhouse Rap”).
Brunch and Budget wasn’t supposed to be a business at all. In 2012, Capalad was working as a financial planning associate with Lenox Advisors, Inc. in New York and was getting questions from friends mystified by their own finances. “The way that Brunch and Budget started is that I would get asked all these questions at parties, because I was the only finance person among all my friends, about debt and IRAs and 401(k)s and budgeting and credit scores, etc. And I had one friend come up to me and say, ‘Pam, I really need your help, but I’m so afraid to make an appointment.’ So, I just blurted out, ‘Well do you want to do it over brunch or something?’ And she, literally, said, ‘Do you mean like a brunch and budget?’ And that’s where the name came from.”
But as she fielded more and more requests for brunches, she began to realize that there may be an unfilled niche there.
“It’s one of those things that I thought was just going to be a gimmick, but it really put people at ease. Talking about finances is such a stressful thing, so sharing food ended up helping us reach this common ground with people, in a way that you really couldn’t in an office setting. People who I knew, and most of their friends, badly needed financial advice and overwhelmingly had no idea where to find it.” Capalad explains.
“Now most of my clients find me on Yelp,” she said. “Talk about a super millennial thing.”
By 2015 she went out on her own, opening up her own practice. She has about 70 ongoing clients, largely young, single and nonwhite, and about 55 more that participate in a program she calls See Change, which is group financial planning for people of color.
She does not charge a percentage of assets under management because, as she semi-jokingly notes, “Most of my clients don’t actually have assets to manage.” She charges fees using a sliding scale based on a client’s monthly income, covering a broad range of $75–$1,000 a month. She also offers single session and/or hourly rates in the $100–$300 range.
If a client has assets, Capalad points them to a handful of automated advice platforms, so-called robo advisors, she recommends—Betterment, Wealthsimple and Ellevest among them—depending on what a client is looking for in terms of fees, technology or investment options. She also recommends Vanguard Personal Advisor Services occasionally and Schwab Intelligent Portfolios if the client doesn’t mind having a big cash position.
“I actually do screenshares with them to help them open accounts once they decide where they want to go. I suppose, technically, it’s a assets under advisement sort of thing; I advise on all their assets, including employer accounts and real estate investments.”
Capalad didn’t set out to cater specifically to younger people of color, but in her community, her client base organically evolved in that direction. “I was just trying to help people who were worried about their money and didn’t know where to go, and I noticed that about half of my clients were people of color.”
Her advice has evolved to meet the unique needs of her clients. “I was able to notice patterns, because I found myself planning for a lot of the same things across clients. Like, the client had to pay for their mom’s rent or cover the family cell phone bill and send their brother money a couple of times a year. There was much more student loan debt, much less savings and no expected inheritances. They were usually the first people in their families to have that full-time job or college education, so they were the ones their families relied on. How do you plan for that? Needless to say, the CFP books did not prepare me for this.”
Capalad has found that a great deal of her work has come to focus on debt management and helping clients operate within a labyrinthine financial system that seems, at times, designed to work against them. She offers credit scores as an example, expressing the importance of understanding what they mean and what goes into their calculation to her clients, while also highlighting the futile nature of trying to do so, given the shroud of secrecy and misinformation that can surround them.
One area Capalad addresses with almost every client is their financial entanglements with parents and family. “One thing I found that I had to talk specifically to my clients of color so often that it’s now just a part of my practice, is asking ‘What’s your parents’ financial plan? Do they have a retirement plan, do we have to make sure their estate-planning documents are in order before we even worry about getting yours in order?’” Because many of her clients are immigrants or children of immigrants, often their parents simply hadn’t engaged in financial planning before.
When asked to share some insight that more traditional advisors can use to better attract and serve millennial clients, Capalad says, “Do not assume that we’re being willfully ignorant. Millennials are trying to learn this stuff in a system that’s changed drastically just within our lifetimes. Our parents largely don’t know how to prepare us for this because the things they thought they knew are totally different from what’s relevant today. It’s so totally overwhelming to have to deal with crushing student loan debt, wage stagnation and a bad housing market to the point where I’m tempted to say, ‘I’m just going to buy some avocado toast and not think about it.’
“How do you guide a millennial client through that feeling and get them to the other side? It’s not by looking at their bank statement and saying ‘You go to brunch too much.’”