Uncover the Secrets of Alternative Investments with Shana Orczyk Sissel from Banrion Capital!

Welcome to the Alternative Investments Series, where we explore the world of alternative investments with experts from various industries. Our guests come from all walks of life, from forex and commodities to real estate, offering insights and stories that will help you better understand the diverse universe of alternative investments. In this series, we aim to provide advisors and individual investors with the knowledge and tools they need to navigate the complex world of alternatives.

Our first guest, Shana Orczyk Sissel, is the founder, CEO, and president of Banrion Capital Management. As a recognized expert in the field, she shares her passion for alternatives and helps us understand what they are and why they are important. We discuss the definition of "alts," which encompasses all investments that are not traditional long-only stocks and bonds, and explore the diverse range of options available, including private equity, private credit, hedge fund strategies, real estate, art, and more.

This podcast features Shana Orczyk Sissel discussing alternative investments. Shana shares that only 0.1% of all alts make headlines, either for a high percentage gain or a loss. She explains that the 24-hour news cycle contributes to the perception that alts are risky and highlights the importance of education on this subject. Shana also explains that a small allocation to alternatives can help diversify and reduce risk in a portfolio, and shares data that supports this claim. She also emphasizes the need to build alternative portfolios the same way one builds equity and fixed income portfolios, and not to chase returns. Finally, Shana discusses Bitwise, a crypto company that focuses on education and is one of the best in the business.

Join us as we dive into the world of alternative investments and learn from the experts about how to identify and access these investments, and how they can fit into your investment portfolio.

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Chapters

• 0:05 Introduction - Shana Orczyk Sissel, Banrion Capital Management
• 6:17 Issues for Alternatives
• 14:22 The truth about Alternatives and Risk
• 26:16 Access to Alternatives - Minimums?
• 36:32 Advisors drive returns, Clients want goals met
• 43:17 How Banrion Helps Advisors

Transcript

Stoy Hall, CFP®: 0:11

Let's get into it. Hey, welcome. This is a new series, everybody, uh, brand new series, all about alternatives, right? You know, I don't like that word, but hey, this is what it's about. Alternative series. We're gonna have guests coming in from, All walks of life from our four x our commodities to real estate, to this lovely lady in front of us who you cannot wait to hear her story and what she's got going on. Uh, but that's what we're about in this series. So if you have questions, if you ever want to know what alternatives are about, um, this is where you want to go. So lay it on me, let, let lay it on all of us. What do you have going on? Who you are, what's going on, um, with your new company and, and

Shana Orczyk Sissel: 0:50

where? Sure. So, um, I'm Shayna or Sissel. I'm the founder, CEO, and president of Bony and Capital Management. We, uh, we start, I launched the farm in September, uh, and we officially, officially launched, uh, last week. So we're, we're excited. We got some cool things going on and, uh, you know, the focus of our firm is to help advisors and individual investors. get not just um, the ability to access alternatives, but everything they could possibly need to scale. Investing in quote unquote alternatives. And you and I were just talking about this before we, uh, went live about the definition of alts. Um, you know, they call me the queen of alternatives and I didn't give myself that nickname,

Stoy Hall, CFP®: 1:44

and I want everyone to know that. That wasn't an industry thing. They, we've turned her that she, that was not her own thing.

Shana Orczyk Sissel: 1:50

That was not my thing. I was given that nickname by Cynthia Murphy, who's the director of research at ETF Think Tank. So I always like to caveat that because I don't ever want anyone to think that. Like I just gave myself that nickname cuz it's

Stoy Hall, CFP®: 2:05

from Mark who

Shana Orczyk Sissel: 2:05

does she think she is? Right. Your point. Yeah. To your point, that was an industry thing that. Others in the industry recognizing that I have some expertise here. It's something I'm really passionate about. And so it was something that, uh, I kind of wear as a badge of honor, uh, like recognition for the fact that my hard work over the last 10 plus years in this space is, uh, seen and respected by my peers. And that's, that's cool to me. But, um, you know, it, it's important to kind of point. You know, you and I were just talking about this like we call'em alternatives and it's so not the right term, but there's also nothing else that you can really think that would encompass the entire space. Right. Um, and basically all alternatives are, are things that aren't traditional. they're the alternative Um, you know, uh, my friend Phil Huber who wrote a book called The Allocator's Edge, he also is, shares my passion for the space. He has always said, and I love this because I think it's totally correct, is that it's not what they are, it's what they aren't. Cuz it's a lot easier to define what they. Um, and what they aren't is your traditional long only stocks and long only bonds. Uh, if it's a publicly traded stock and you're only going long, or if it's a publicly traded bond and you're only going long, it's not alternative everything else. Literally everything else is alternatives. So, you know, in that respect, it's a huge universe. extremely diverse. It includes a whole gamut of things from private equity and private credit to hedge fund like strategies, long short market, neutral, global macro managed futures. Real estate like physical real estate cuz reeds are traded publicly as stock, um, on exchanges. But like physical real estate, private real estate. Um, Music writes art, antiques, art, all of that cars, that's all alternatives. So it, it, it's a pretty big, uh, universe of things and, uh, I think that's what makes it so intimidating and it's what I have focused my entire, you know, 10 plus years. Last 10 plus years, uh, since I was introduced to the space in 2007, helping people kind of figure out how to, you know, swim through this sea of options and understand how. You know, people always talk about alternatives as diversifier alternatives, as you know, excess returns. Like, yeah, you can find that in the universe, but there's also a whole universe of other things you gotta wade through in order to. Get to those things and that's the intimidating part.

Stoy Hall, CFP®: 4:55

Absolutely. But I mean, let's be real. We've been in this industry, we've dealt with people who have a lot of actual wealth. Um, in terms of money figures, wealth is a whole different conversation that I'll get into later. But um, in terms of money, people have a lot of money, build majority of their money from the alternative. Absolutely. Um, I, I don't know one plant on this earth that can say you are going to be rich and, and have a lot of money by just doing the traditional way. No, that is, it's there. It has its purpose. It's important. Don't get us wrong. but the alternative space is where you make your money. Like that's where it's at. And it's really tough for everyday people to understand that part because of whether it's our regulations, our marketing of awareness, or even just the communities and networks that they have just aren't involved. And that's, that's what you're here for. That's what we're pushing as hard as possible. Within that scope, what is, what do you think is the, the initial. uh, issue, problem in our alternative space to become more, um, aware. Because really if you think about it, when you said traditional and it's really just long stocks and bonds, that should be the alternative. Cuz it's so small, everything else is so big, right? Mm-hmm. um, what do you think is the one issue that's causing that? So,

Shana Orczyk Sissel: 6:18

I don't think it's one, I think it's two. So the first issue is I think performance because it is such a vast universe, um, you know, it's hard to differentiate and decide where you need to be and have appropriate performance expectations of why you're investing. And I think a lot of people look at alternatives and compare it to the stock market in the can't. Um, and the second thing is, I think, uh, So you pointed this out, you know, traditionally alternatives have only been available in private markets and you know, I'm going to throw a bunch of numbers and letters at you. Things like three and three funds, which are just, uh, fancy ways of saying only available to qualified clients and accredited investors, which means then order to invest. You have to meet certain hurdle. and if a firm has these types of funds, they can't actually actively market it. So you kind of have to find them and know about it, and they can't really solicit. So that makes it hard. That's why all these access platforms exist, uh, to try to help, uh, resolve that issue. But again, this is a really, really big universe, like 10 times bigger than your traditional equities and fixed income space. Very difficult to find because there's not as high barriers to entry. You don't have to do the extensive regulatory filings that you need to in order to be in the more public space, and there's a reason for that. But, I think that's changed. You know, I like to always give this history lesson and anybody who's heard me speak before is going to be bored to tears cause I've heard it before But in 2007, the s e c changed the rules, uh, as it relates to what is called the 40 Act, which is the, um, the regulatory framework that allows for mutual funds and ETFs to be available to the masses. And prior to 2000. the s e c really restricted the ability for funds to, uh, be able to use shorting and leverage within an ETF or a mutual fund. Uh, in 2007, when they relaxed that rules, there was this, Enormous influx of every asset manager in the world launching 1 30, 30 and 1 20 20 funds. Um, and 1 30, 30 became the number because the s e c relaxed rule saying you could leverage and short up to 30% of your net asset value. So, um, it allowed for hedge fund like strategies to become available. in mutual funds and then eventually ETFs as non-transparent rules became more, uh, allowed for funds that were shorting to feel comfortable, you know, doing things in an etf. So now there is access for everybody. And then now we have a lot of platforms and we're talking about tokenization of potentially, um, private product. There's new interval funds that kind of allow for. you know, everybody to be able to access less liquid securities, um, assuming that they're comfortable with the less liquidity, right? I think that's another stumbling block in the space, is that you have to be comfortable with the fact that you can't just, you know, at 1:00 PM on Thursday. Go into your account and sell something and have the money in your account two seconds later, right? Um, many of these things are not quote unquote liquid. You can't do that. It's a little bit harder to sell, and so you have to be okay with knowing that your money isn't easily accessible, if you will. But interval funds now exist allowing for investors to take advantage of less liquid markets, and there's alpha and illiquidity. I say that all the time. Being willing to invest in something that isn't daily liquid allows you the opportunity to invest in markets where you can really make a lot more money. Uh, and that is why I mean, when I say alpha illiquidity, private equity, private credit is the perfect example of that because I don't really think that they're diversifiers in the sense that they're not reducing your equity or fixed income beta, they're just a better mouse trap to get better returns because you're in less efficient market. they're less liquid. So you got the alpha somewhat from illiquidity. And so these are things that now everybody can invest in. You know, there's crowdfunding if you wanna be involved in venture capital. There's crowdfunding platforms that anybody can participate in. There's crowdfunding, lending platforms and everybody knows them. Peer-to-peer lending, anybody can participate in. So, you know, there's a lot more opportunity for the average individual, the average investor, to be able to participate in the space. And again, it's a huge sea of possibility. And so my, my firm exists to. investors wade through that, and our goal is to make alternatives available and accessible for everyone. So part of what we do is access. We focus more on emerging managers, smaller managers, because quite frankly, if somebody wants to get into Blackstone, I can make a phone call. It's not that hard. All these access platforms that focus on the Goldman Sachs, the Morgan Stanleys, the Blackstones, and the Carlisle, I hate to tell you folks, it's actually not that hard to get into those funds. know the right people. You know? The only thing that you really get from the big access platforms is lower minimums. But again, If you know the business, you also know that you can work that out, right? Um, there's a lot of opportunity there. And where you really find opportunity is in the smaller managers, the emerging managers. There's plenty of academic research that shows in the space of alternatives. Actually, smaller managers do better. The only place that's not true is private equity, where scale is important, but in pretty much anything else. you wanna have smaller managers, you know, because especially when you're dealing with less liquid, more esoteric stuff, that you can't really scale that you're never gonna have huge funds of music rights. Right. Because the actual universe of music rights to invest in is pretty small, so you can't put trillions of dollars into that space. Yeah. So you're never gonna find. Multi-billion dollar fund that invests in music rights or wine or, you know what I'm saying? So there's a lot of opportunity and our goal at Bandon is to help advisors in particular, uh, that deal with traditional, everyday quote unquote main street investors, um, to gain access to that. Because I think ultimately when you think about education of how to help people build wealth, and you did a great job talking about the difference between savings and. Um, they're not one and the same. Um, we as an industry and as a society do a great job telling people that it's important to save. But you don't build wealth. You don't break the, you know, the circle of poverty because you're saved. You do it because you invest. And to your point earlier, the way you make and build wealth is not necessarily through the stock market. Now, that's certainly a better option than just, you know, putting it in like a savings account at the bank. Uh, but, um, if you really want to make a difference, you have to go into the alternative space, into this less liquid stuff. And I think the most obvious example of that, which is sort of like the training wheels, if you will, of, uh, of taking that jump is like, you know, You buy a three family home and you rent two of the apartments and you have the cash flow. Like that's kind of the training wheels version of it, right? It's having that passive income. Um, it's the same idea.

Stoy Hall, CFP®: 14:17

Yeah. Absolutely. And let's, I want, I wanted to get your opinion on this after I go through it, but every, uh, a lot of advisors older mm-hmm. um, ones who aren't familiar, even younger ones that come through your BD side of everything and then, you know, individual investors and just normal people believe. Alts are always higher risk. They're, you know, crypto esque, right? Um, where the risk is so high that why would I get involved? And part of that is the liquidity part of it. But again, I. I want your opinion on this, cuz my opinion is that's, that's Deb, that's wrong. Um, there are a ton of alts, so many, I don't even know how many millions of alts that are actually less risky than the stock market in itself as a whole. It's total nonsense. Yeah. Yeah. And why, why is it like, I, I'm gonna let you go on that cuz I could ran about that for hours, but, all right. I want you to go on that one because the

Shana Orczyk Sissel: 15:09

guys who make the headlines, which is like, 0.1% of all Alts, the guys who either make the headlines because they. you know, a thousand percent one year or that they blew up one year. That's why, um, those are the guys you hear about. And it's like anything, um, you know, you wanna take everyday life. You think the world's scarier and less safe today because we have a 24 hour news cycle that focuses on every bad thing that could possibly happen. And when you have 24 hour news cycle and you can get information really quickly, it really does look like everybody's. because they were trying to take a selfie and fell off a cliff. Like that might happen three times a day across the world. Right. Uh, but because all three times are in the news, it feels like it happens all the time. And you know, it's that kind of thing. It, it feels that way. You know, I, I spend a lot of time. and this is why I have a job, and this is why I have a passion for this. Educating advisors on the fact that that's not true. You know, I can put together for you the least efficient alts portfolio. And when I say least efficient, it's not the optimal way to get exposure. But I can put together a, a model, uh, a portfolio using just 40 ACT product, just ETFs and mutual funds. And if I. I can show you, and I actually have this, this data, uh, that if I take my little five, you know, fund portfolio and you used it with your traditional 60 40 at a 20% clip, so you have a million dollars, 800,000 goes into your 60 40, 200,000 goes into my little AL'S portfolio, you'd get improved. Nothing sexy. You might not even notice 10, 20 basis points on an annualized basis, which actually does add out quite a bit. But to your point about risk, you would've reduced your risk. It wouldn't have increased the risk. It would've reduced the risk of your overall portfolio. And while I know crypto is extremely controversial, a very tiny allocation to crypto, 1% or less could also do the same because it's. Correlated to those traditional markets and you have huge potential upside. And if you have a small enough position, that huge potential upside can add substantially to your portfolio returns. But because it's such a small position, if it went to zero, it would have almost no impact on your portfolio. So, you know, from my standpoint, having that diversifier that. no correlation. Part of your portfolio. And just to be clear, I don't have crypto in my model uh, but I'm just kind of throwing it out there because I absolutely need some good work w via a firm called Bitwise that actually shows this. And I, Bitwise is one of the few crypto companies that I, I think is one of the best in the business. They, they don't try to blow smoke up your ass for a lack of a better term. Yeah. and they're honest about it. Um, and they're, they really do focus on education. Uh, but they have some great stuff that shows like a 0.5% physician in crypto can make a huge difference, uh, with virtually no downside because the physician's so small. Um, at the end of the day, if you pick the right alternatives and you know how to build an alternative portfolio, and that's the key, I think the reason why advisors get so caught up on, oh, poor performance. Oh, these things aren't great. Oh, they're too risky. It's cuz they chase returns. Um, it's, it's natural. We all to some extent chase cuz we don't notice Right? Until it's, until a little late Ooh, look at that. Ooh, let's get in. Yeah. Yeah. So in essence what happens is you chase what works and then it doesn't work. Um, but then if, if you think about building an Alts portfolio, the way you think about building fixed income or equity, you would never sell your value fund cuz it was underperforming. Like I've never heard of that. Right? Like people are like, oh, value's not working. But you don't all of a sudden see a mass exodus of value because it didn't work and you're not freaking out about it. You know that like this is how it happens. Grows in value tend to have different cycles. You can never really determine which one's gonna do best. So you have them both in your portfolio cuz that's how you diversify. It's the same thing with alts. We don't teach advisors how to build all portfolios like we. them how to build equity and fixed income. And so they buy a long short fund thinking it's going to a directional long short fund thinking it's going to diversify. And it's really just equity beta. So when you have a straight up bull market, you're like, why does this thing suck? Well, cuz it's short stuff, right? It's meant to head it's, and then it's. Right. And then when the markets go down and it's negative, maybe not as negative, but it's negative, you're like, well, why did it save me? Well, it did, but it's still directionally long equities, right? And so it's going to have some exposure there versus. and then they only have the one like, oh, that's my 20% all so well. No, that's not how it works. Just like you have to build fixed income and equity with like lots of building blocks. It's the same thing in alt. It's like you're gonna have a market neutral fund. You'll probably have some sort of credit arbitrage fund. You'll have a global macro fund, which is super uncorrelated to equity markets, right? You'll have a managed futures fund. Maybe you'll throw in a hedged equity fund. You know, depend. whether or not you think the markets might be going up and you wanna have a little bit of exposure there and, and that's how you build an ALT portfolio. It's not one fund at one time. And the fund that did well before. No, it's, it's the same way you approach fixed income. You're gonna have high yield, you're gonna have investment grade, you're gonna have floating rate. And you understand that in the totality. It makes sense. Same thing with alts. Same.

Stoy Hall, CFP®: 21:06

Yeah, absolutely. And even a throw, let's go back to your point. You said 20%. Do you believe 20% should be an alts or what is your philosophy and number?

Shana Orczyk Sissel: 21:16

So overall the research supports a minimum of 20%. Say

21:21

that

Stoy Hall, CFP®: 21:21

a louder, just, just for everyone in the back. Can you say the minimum again was what, 20%.

Shana Orczyk Sissel: 21:27

Okay. Maximum of 30. That's, that's the realm. And that's based on research done over decades. using institutional models, cuz institutions average about 23% in, in alternatives, uh, on a broad basis. Now endowments tend to be like 50%, right because they don't have liquidity needs. Um, but the average pension fund has somewhere between 20 and 30%. And the reason why the 30 percent's kind of max is cuz you're talking. anything more than that makes your overall portfolio relatively illiquid, and then that's where it becomes more difficult. So 20 to 30% is where you get your maximum bang for your buck, where you can get, you know, better overall portfolio returns with lower risk. anything other than that, you might actually not improve returns and you might increase risk because as you broaden your alternative landscape, the chances are that you're going to, you know, we use the term in the institutional size, risk, budget, take on something riskier, um, and then add more risk to your portfolio. So you're not really adding anything. And if you think about just diversification as a rule, it kind of works the. you know, with stocks like mm-hmm. I, I was reading something from somebody from Alpha Architect that posted this yesterday, that showed that like beyond 20 stocks, the diversification benefit of each additional stock basically is nothing. Right? And it's the same with Alts. So 20 to 30% is the number minimum of 20. Maximum of 30. Yeah.

Stoy Hall, CFP®: 23:01

And, and are you including kind of the private side in that too or are we, because most of the data, um, and I want everyone to know, like when we speak about some of the data, a lot of the private data we just don't get cuz why it's private. Like that's not always gonna be disclosed. So I believe, um, that, that number's probably higher if you include private. Um, but in your conversation, are you thinking 2030 total, which is private. as well, or not it?

Shana Orczyk Sissel: 23:30

So this, this can be debated. I consider private equity and private que credit equity and fixed income. Okay. So I actually don't conclude them in that 20 to 30% budget. Love that. But you're dealing with illiquidity. Yep. So it becomes a question of kind of like the endowment. right? How much illiquidity can you have in your portfolio? But to me, private credit is no different than public credit. You just have some better opportunity to make more money in a market that's less efficient than has, to your point, less information. So it's an information edge that you get and so you can make more money. And the same thing with private credit. It's the exact same thing. Um, it is an information. getting information that is not publicly available that allows you to have that. But it all comes down to the liquidity aspect of it. And I would say in the space that I play, which is working with mass affluent advisors and their clients, they would never be comfortable with more than 30% total, including private equity and private credit in their portfolio. So I typically remem, uh, recommend that 20. in like my kind of S portfolio that diversify our portfolio and an additional 10% in private equity and private credit. It all comes down again to liquidity. More affluent folks who can tolerate less liquidity should probably have more like 20 to 30% in that private. Private credit bucket, but I generally don't deal with those folks. Uh, so, and also those folks tend to be able to access more things in the venture capital space, right, than the average investor. Um, really, really that is the one space that is exceedingly difficult to gain access to. I actually have, one of my strategic partners is this amazing firm called Vested, which has the best mouse trap, in my opinion, to gaining access to venture capital in a way. Feels more comfortable and more intuitive for the individual, uh, investor and their financial advisor. Um, and kind of has found a way to reduce risk as it associates with venture capital, which is really like hitting one home run and having, you know, 10 uh, misses. you know, they found a way to do that better. Um, and so that's an example, but that's few and far between. You know, when most people think venture capital, they think Sequoia. Yeah. And you're not, I'm sorry folks. love you. You're not gonna be able to write a check for less than 20 million to get into the Sequoia fund. Right. If they'll even talk. So, you know, that's my point, Dan.

Stoy Hall, CFP®: 26:16

I think that's a, I I wanna go along more with that point of minimums. Let's talk about minimums, right? Um, uh, globally speaking within your strategy, et cetera. Um, you know, in the, the private equity and um, real estate side, uh, you know, you have minimums from like, You know, we're technically exclusive within our real estate, but like we go from 25 if it's a really small deal to a million, if it's a bigger deal. And I know that falls all over the map too, but give me, um, your insight to your strategy, your, those minimums and then kind of what people should expect when they're finally getting into this, this alt.

Shana Orczyk Sissel: 26:56

Sure. So in my space, um, like my model is a full 40 ACT model, so there really isn't a mini minimum, um, a, a partner like vested. It's a hundred thousand dollars minimum. Um, I also have another partner, um, named Third Wire Asset Management, which is a great solution for people who have accredited investor. Clients that, um, want a diversified product. So they have a$250,000 minimum, but it's a fully diversified, complimentary. Um, almost hedge fund to fund product, um, that is aligned with how I build portfolios. So we work very closely with them and we're doing some white label work with them, um, because it's an excellent product, fully diversified with a minimum of 250 mil, uh, 250,000, sorry, Um, and um, you know, but then I have another strategic partner, TAs, which is full. So, you know, they have great models. They have great alternative product that, um, doesn't have any major minimums that hurdles any more than their, your traditional mutual fund, you know, thousand dollars or whatever it is. And now with fractional shares in ATFs, you can go even lower than that. So, um, you know, there's a lot of opportunity out there if you look for it. And I, I have solutions across the board where I kind of. Bridge the gap, if you will, is that I'm the only firm that I know of that I have found that plays in both. Um, most are access platforms that are only private markets and um, that's great, but they're just access platforms and they're only for, you know, 30, the average advisor. Only about 30% of their book is accredited. You know, we also work with a partner called Leaf Planner. And Leaf Planner helps advisors understand. The entire scope of the financial picture of their client, uh, as well as all the important instructions, you know, should somebody pass. Uh, really interesting and holistic approach, which may help advisors discover that a lot more of their clients actually are accredited or qualified, uh, cuz they have a fuller picture of their entire, uh, landscape. Financial, uh, information. Um, and so we, we work with Leaf Planner to help advisors discover if they have even more people in their book that would qualify. Um, but these are the different things that we try to do to help our advisors gain access to, um, to the clients and figure out which one of our partners or if my model will work. But our goal is really to help them scale and give them access and give them education and give them a dedicated technical expert to help them on the client calls. Cuz I hear this all the time, I'm sure you can appreciate this. These are complex product. and you need someone who has technical expertise in order to be able to overcome some of the initial objections or confusion that your client might have with these products that are different. Um, and when you can get somebody on the phone to help you talk to your client and you know, 90% of being a financial advisor is being sort of a therapist and sort of that relationship manager. It's not really managing portfolios so much, but when you can have somebody. Can come on board with that technical expertise, who also understands that you have to be a therapist. Um, it can really help facilitate those discussions. Advisor after advisor that I've talked to has said they, they don't like alts cuz they don't understand them, they don't have access to them, they're too risky. Performance isn't great. And oh, I don't know how to talk to my, uh, clients about this and if it's gonna be the one thing that they bring up all the time because they intuitively don't understand it and I don't understand it. I just don't wanna keep having the conversation because it's not helping improve the trust between me and my client. It's making me look dumb and I don't want that. So then when you can bring in a partner, like what we offer a bony, it, it, it solves for pretty much every single. Negative reason that, uh, you know, advisors have stayed away from the space. And at the end of the day, the point you brought up in the beginning, you build wealth with this kind of investment and so is going to help you with your relationship, with your clients, or you as an investor build your wealth much more. And our goal is to. Except I, I'd like to say alts for all, because there's nothing, there's nothing that exists now that would prevent, you know, my neighbor from buying alts. What prevents is, you know, lack of education, lack of understanding how to build it, lack of a good technical expert that can speak on these things in a manner. Reads trust instead of, you know, reduces trust. It's all available. It's just a matter of scaling. But I think, you know, in the next 10 years you'll see that, uh, alts are as normal in a portfolio and normal in any discussion of investing as equity and fixed income.

Stoy Hall, CFP®: 32:23

Yeah. And I fully agree with that. When you hit upon advisors, finally being able to holistically look at things and it's, it's more about the relationship than it is, you know, the actual investments. We hit upon that all the time because our industry has shifted, and we know this, it's been pounded with fees. It's been, we have so much education now that like picking your investment portfolio, your traditional side. It's not irrelevant, but it is not something that you need to spend as expertise on. What we need to know is the emotional side of our clients, so that way we can be on board and understand how they work, which we can lead them to those alts or different concepts and strategies that actually fit them. Not this normal 60 44% rule. Um, which that's a different topic.

Shana Orczyk Sissel: 33:11

That's. Go ahead. Yeah. I love that conversation because one of the things you can do with Alts that can actually enhance your relationship with your client is if you know what they value. There's an alt for that. Yep. There's an alt for that. You value women in leadership. I can find you a hundred funds that only focus on investing in women micro financing for women. Yeah, and like Uganda, like I can find you an alternative product that. Touches you far beyond and, and that's really important. People wanna invest in the things that they're passionate about. If you love horses, I swear to God, I could find you an all fund that has to do with equestrian, right? Like it exists. You can find anything. If you wanna get your children involved in investing, this is an awesome opportunity. You know, Peter Lynch is known for, Invest in what you know, what you understand and what you love. Let's go beyond that. Let's help people invest to have impact. You know, impact investing is sort of cliche, but like anything can be an impact investing, right? If you know what people are passionate about, what, what really touches them, and if you wanna build your relationship and really strengthen your relationship with a client, wouldn't it be cool if you knew that they loved, you know, supporting, um, women, uh, in. Poor countries build, you know, wealth for their families or get education. Wouldn't it be cool if you could find them some sort of way to invest in that very thing? Yeah. Um, that's cool to me and. that's why advisors should be considering this space. It, it really can strengthen and enhance their relationship with their clients and really show their clients that they know them and they're not just some stock jockey. Yeah. Which, and I think a lot of people forget this, you know, we take for granted that fixed income is just. always in portfolios, but if you think about like Pretech bubble, fixed income wasn't really a thing the masses could do, right? It wasn't until after that where you had like the proliferations of the PIMCOs of the world and all these major fixed income funds became available, and then we had fixed income ETFs and so then it became so much easier. You didn't need to go and like have a hundred thousand dollars so you could buy. you know, they, they no less than 40, 50 years ago, you know, the average investor couldn't invest in fixed income unless they went to like treasury.com or they went to their bank and bought a ct cdd, right? Yeah. Um, it was, it was really just rich people who could get fixed income because the average par value of a bond is a thousand dollars. And in order to build a bond portfolio, you need hundreds of thousands of dollars to do that. So now it's accessible. And I think we take for granted that, you know, oh, fixed income, everybody's always had that, but that's never been the case. So I think also are now at that point, the point fixed income was, say early nineties, uh, late eighties. Um, and then very much after the tech bubble burst, did fixed income become completely mainstream? Um, so. alter there and I'm here for it. And I'm here to help advisors, you know, be ahead of the curve, meet their clients' need, help their clients find things that they can invest in that they're passionate about.

Stoy Hall, CFP®: 36:32

Absolutely. And I'm right behind you side by side in that fight. And it really comes down to there is value in clients being comfortable and loving, where every dollar they have. there is more value to that than you can actually put a dollar figure on, in my opinion. And, and it's not about returns, right? I think the, the returns thing has been driven by us in our competitive nature to be like, well, I can get you 10% when you know she can get you nine. Um, I believe wholeheartedly. Clients don't, at the end of the day, that's not exactly what they care about. They care about where's that dollar going? What's it doing? and I feel good that it's doing that even if I'm only getting a small return, maybe a negative return. But if that money's going to, um, women in Uganda who can build a business like that feels good, like that feel good is way more important than exactly what return I'm getting on that dollar. Right.

Shana Orczyk Sissel: 37:26

Um, I think at the end of the day we worry so much, uh, advisors worry so much about like the returns. To your point, we drove that. Clients have a goal. Did they, did they meet it or not? Right? Because at the end of the day, all your client cares about is, was I able to meet what Name your goal. Yeah. Was I able to send my kid to college? Was I able to pay off my account house or was I able to retire comfortably and maintain my lifestyle? That's the goal. How you got there, uh, is nobody cares that you got them 11% instead of 10. If at the end of the day they get where they want to. And that is the thing, you know, I think it's become sort of, A thing, goals-based, it's always been goals-based investing. Right? It's just there was a time period where passive worked and so we had to change the marketing you know what I'm saying? Yeah. We had to change the marketing, right? Because all of a sudden we had to show that there was value in what we were doing cuz it's goals-based, but it was always goals-based. Your client did not care if you made them 20 million and uh, somebody else could have made. 20 million. 100,000. Did they, were they able to retire and maintain their lifestyle travel all over the world like they wanted to? Yes. That's all they cared about. They didn't care about like the, like nobody must have die and have like millions of dollars sitting around like they wanna have had the money and spent the money while they were alive. So the. It doesn't matter. It doesn't matter if, as long as they re and achieved the goal that they wanted to to live their best life. Yes,

Stoy Hall, CFP®: 39:00

absolutely. And that's really, that's our jobs. Like as planners, that's all. That's our whole job that it has nothing to do with anything else. That's our whole job. And our whole job is to. Build our network and not live in our little small bubble. Right. What I love about the pandemic, what it's done for our industry, is we're doing a lot more virtual, like a lot more, which means we can reach a lot more people who are like us or who wanna work with us. We've been, I mean, industries in the past have just been who's around you? Um, and it's a very slower way of building. Now. We literally can attract people all over the place, the globe if you will, um, of people who wanna work with you. So therefore you can reach out and do more of that. So I'm really glad that the pandemic happened for that specific reason, but I also believe the pandemic has pushed. More so because people spent so much time being able to do, dig in and do their own investments, whether it's those stupid ass meme stocks, um, or they started to control and understand more and now are wanting to invest in the work. They had nothing else to do. They had nothing else to do, which now they're like, well, I can do those things. I don't want to, I don't have time anymore, but I wanna be in that world. I don't wanna be. you know, you're just normal everyday market role, which is gonna highlight Alton over the next 10 years. There's two things I think that's gonna happen in our industry. ALT will be beyond mainstream, and us as planners are no longer advisors. We are holistic and we understand the emotions and where our clients are going mentally well before, well above and beyond. Educating them on what a Roth IRA is like, that's not, that's just the ends means that's how we get it done. It's more like, I want to be able to retire. I wanna take care of my clients. I know we've said that and we've pounded it, but most advisors do not feel that. They do not know the emotional connection to money by people that is just not mainstream. And those two things, I believe will

Shana Orczyk Sissel: 40:51

be, and that's the thing, like when I was building my platform, you know, I've always been so focused on those strategic partners and my models and. So when I was approached by that company, leaf Planner, I, I mentioned earlier, I was like, where does this fit in? And as I learned more about what they were doing, it actually helps my advisors do exactly what you're talking about, right? Understand the full picture, have that relationship, understand the goals, because. you know, there's everything in there from like, if you wanna write your own obituary, it's in the leaf planner system. And if anything should happen to you, your financial advisor knows who your wife is and who your kids are and who your brother is and how to get ahold of him. And hey, here's the obituary he wrote, right? Uh, for himself. Like it's all there. And so from my standpoint, I was thinking to myself like, if my goal here is to help advisors build better relationships with their clients, this is a perfect fit. Um, even though like intuitively it didn't make sense at the time, right now, it's like if, if the goal of what Bon RAN stands for is to help advisors do exactly what you're talking about, we wanna give them every tool they could possibly need to do that. And while I'm super passionate about alternatives, it certainly is helpful to advisors to know that maybe 5% more of their. are actually accredited. They just didn't know, right. Cause they didn't have the full picture. Um, and then better than that, now that you have the full picture, now you can tr hopefully get more assets because now you know exactly where everything is and what they're doing. It, it's, it's really, you know, thinking about holistically, like the, the goal of Ban Bon ran, sorry, Bon ran. I should know the name

Stoy Hall, CFP®: 42:31

of my own phone. You should. But sometimes it's tough.

Shana Orczyk Sissel: 42:33

uh, the whole goal of bony is to, um, you know, help advisors, um, stand out from the crowd. All right. And doing that through alternatives in a scalable way.

Stoy Hall, CFP®: 42:46

Absolutely. As we get to the end of our hour, what's next? So, just launched, right? Obviously. Mm-hmm. congrats on that one. What is, what's next? What's this next step? What does it look.

Shana Orczyk Sissel: 42:58

Well, my next step hopefully is to build my network of advisors who leverage the platform. You know, for me, um, that's the biggest deal right now. That's my key focus because at the end of the day, if I, if advisors don't wanna work with me, then like my entire. It's screwed. Yep. That, you know, that's kind of important. Um, my second hope is to be able to launch actual proprietary open architecture products. So hopefully in the second half of the year we'll be able to launch a boundary hf, uh, which. I've heard time and time again from advisors that it would be, they love my model, but it would be great if they could do single ticker solution because a couple of the ATFs in my model are fairly illiquid and hard to trade, and you gotta start calling market makers and it gets really complicated, really fast and get like professional traders involved. If you have a one ticker solution, it solves that problem. Uh, I, I envision, um, having some boundary and interval funds in the future and working directly with my strategic partners to. better access to really interesting products, um, at lower minimums. Um, and, and that's really the goal is scalability and access, um, education, operational efficiencies. All of those things, uh, are gonna be the key. And hopefully, you know, you'll talk to me in five years and bot ran will be synonymous as a leader in the alternative investment

Stoy Hall, CFP®: 44:25

space. Now, hopefully it will. Damn sure will be. So how does a, how does an advisor, um, for all those advisors out there, uh, how one do they get involved and what does that look like?

Shana Orczyk Sissel: 44:37

It's very simple. Um, we are an outsourced cio, so we have this incredible tech portal. That is basically like an Apple ecosystem for our advisors to be able to access their dedicated investment officer who helps them. Uh, you can put them up on your website as your c i o, you can have them on any client cl call. You can have them do webinars for you, dinners for you, any sort of client appreciation events. We're here for you. Uh, but you also have access to all of our research, all of our educational content, all of the research and educational content of our partners. You can access our partners. We are streamlining the operational process with having streamlined ppms so you don't have to do different ppms for every single, uh, partner. On our platform, we offer screening tools and we also provide, um, better categorization in screening. So if you're an advisor and you want to look for your, to build your own models, you know, Right now, Morningstar's categories do not align with the traditional alternative categories that were established by Barclay's Hedge and H F R I. And all those other firms had standardized definitions that all aligned with each other, and then Morningstar decided to invent their own categories that don't. So we've done the work to align everything to make it easy for you to be able to run searches across markets. You get access to those data feeds, you get access to our analytical tools. you get all of that. We have, uh, it's sort of a subscription model. We do not charge by basis points because this allows us to be accessible and to grow with you without becoming a greater expense. Uh, we co you're not paying us more cuz you're bigger all of a sudden. And we are, our goal is to help you get bigger. Uh, and you'll never, you know, we'll, never. Charge you more cuz you did. Um, so our, that's our model. Um, we focus on working with advisors that want a true partner, want somebody they can call on the phone at any time and get the answers that they need, but also have access to tools that allow them to build alternative portfolios. Right now, the average advisor does not have those tools because most of the traditional software solutions can't handle. Shorting derivatives and the like, but we've solved that problem for you and it's all in a nice, clean, easy to use, really intuitive platform. So I'm super excited about that. So that's the advisor experience is one where they log in, they see all the research, all the educational content right up front. They go to the Dana Mart, they can check out any of our strategic partners. I like to say it's the Bumble. So people who are familiar with dating apps know that Bumble is the app where men cannot message women unless the woman has initial, uh, has indicated that they're interested in the man first. That's how our model is. Um, when you see our strategic partners, you can click on them and the portal, you can check out their research. You can even subscribe for their research. But until you say, contact me. they can't contact you. And so, you know, we want our advisors to feel like their information's safe. And we're not just pimping'em out to our partners. That's not the point. We wanna curate a list where you can feel confident that these are good partners that are gonna work with you and that understand you as an advisor and what your model of business is like. And that's another big negative for the business. Most hedge funds and quote unquote alternative firms. Never dealt with advisors, typically family offices and institutions, which are a different animal, completely. Uh, so they have no idea how to service and help advisors. So we work with our strategic partners to ensure that they can be good, trusted partners for our advisors too. So it's really our g I really think that we have something special and I think for advisors to come and work with us, they'll be really, really impressed with everything they. with that white glove, high-touch investment officer there for them at all times.

Stoy Hall, CFP®: 48:35

What kind, what kind of firm, what size firm, what, what should they be looking for? Like when they hear this and they're like, Hey, I want on board, but what, who fits the best? What, what does it fit the best?

Shana Orczyk Sissel: 48:45

It fits the best with firms who, um, I would say are under 2 billion, probably 50 million and up. Who? Maybe they have a couple investment analysts. Maybe they even have like a portfolio manager, but they don't have like a really robust research team, or they're just not technical experts. In the alternative space, we'll manage an entire portfolio, including the traditional side, because that's our, that's my background, that's our team's background. Um, but the, these are advisors who understand and see that alter the future and they, they need that technical expertise. That's what we bring to the table. Uh, so if you're an advisor and you're between 50 million and 2 billion, where that's really our sweet spot, I feel like if you're an advisor over 2 billion, you probably have a pretty big and robust research team with a CIO and. Senior port PMs and things of that nature. All

Stoy Hall, CFP®: 49:43

in-house, by the way. All in house. All in house, yeah.

Shana Orczyk Sissel: 49:46

Um, but anything under that I think is where we can really be helpful. Um, and where our service can really make

Stoy Hall, CFP®: 49:54

sense. I love it. I love that. What's, uh, what's next for you? Do you, where are you speaking at next? I mean, you speak all the damn time and you always are at some conference, so what, what's the next stop for you that people can.

Shana Orczyk Sissel: 50:06

I will be in New York in two weeks for the money Show, global Strategy Summit, and an accredited investor forum. Uh, so I will be there the 19th through the 21st, and I will be speaking about as they refer to it, um, well as I refer to it, investing like it's 1973 Back to the future, uh, because much of our current environment is very similar to the seventies, but I'll be talking about how to incorporate alts in your portfolio. Um, in, in essence, it's a really fancy name for my presentation and what I'm passionate about. Yeah. Which is why you should own Alts and how you should

Stoy Hall, CFP®: 50:47

do it. That's fair. There you go. There you have it folks. Um, the first of many, but the first of this series, um, really hitting it hard, so reach out. We'll obviously have our socials everywhere and do all, all the, the things from a marketing standpoint, but, uh, do reach out if you have questions and. You can reach out to me, I'll connect you, uh, and do whatever you need to do in regards to that.

Shana Orczyk Sissel: 51:23

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