Even Joe Duran has arguments about money with his wife, Jennifer.
How can she argue about that with him, the founder of United Capital Financial Advisers LLC, an emerging powerhouse with more than $21 billion in assets under management and 19,000 clients?
“I’m not the life guy,” he said during an hour-long interview in his office overlooking Fashion Island in Newport Beach. “I’d say, ‘You are being irresponsible.’ She’d say, ‘You don’t know how to enjoy life.’
“My primary goal is to avoid pain. I use money to protect me. My wife, however, who grew up in a lovely household in West L.A., thinks money is a way to enjoy life and take care of the people you love.”
The 50-year-old Duran is using his insights on human nature, including his own fears—to build one of the largest independent money management firms in the country.
Since starting the company in 2005, he’s grown it to 645 employees, 90 offices and more than $200 million in annual revenue. The firm is one of the biggest registered investment adviser based in Orange County, based on the Business Journal’s new directory, starting on page 32.
Rather than using the term wealth management, Duran said his company coined “financial life management” to explain “where your money meets your life.”
Duran said he’s approached “all the time” with buyout offers. He’s considering an initial public offering but is waiting until the company is valued at $1 billion, which he said would be large enough to attract institutional investors in the stock market.
No to Steady Eddie
Duran has boosted assets through a combination of organic growth and acquisitions of registered investment advisers.
Now he’s aiming for a third revenue stream by white-label licensing his company’s technology to third-party advisers who want to combat “robo advisers,” or advice based on algorithms.
In 2016, United Capital released FinLife OS, a client relationship management system that includes training and coaching. In April, it issued FinLife CX, which permits advisers to maintain their existing customer relationship management systems while using United Capital’s white-label software tools. FinLife CX is moving away from traditional fees based on assets under contract and management to a structure that will charge an annual $600 per-client guidance fee.
Private equity firms Bessemer Venture Partners and Grail Partners LLC own about 50% of the firm, and the remainder is split among employees, including Duran, who declined to reveal how much he owns.
United Capital “employs a transformational acquisition strategy that targets small to mid-sized independent RIAs,” Grail Partners says on its website.
Duran’s goal is to double assets every three years, meaning it’s on pace for annual growth topping 20%. Why does he want to grow so quickly?
“It forces a level of unusual and unconventional thinking on everyone who works here,” he said.
“If we became a Steady Eddie, that’s not interesting to me.”
Once Poor Kid
Born in Barcelona, Duran lived in seven countries by the time he was 7. His parents settled on what was then called Rhodesia, a white-ruled African country that changed its name to Zimbabwe when he was about 12.
“My parents weren’t wealthy enough to send me to private schools or leave the country” at that time, Duran said.
His upbringing was difficult, as his parents were “quite unsuccessful at businesses” for many years and Duran was responsible for the safety of his three younger siblings. As a teenager, he helped the family by selling hot dogs on the street, playing disc jockey at weekend parties, and working as a night manager at a clothing factory from 5 p.m. to 1 a.m. As a result, he was “an awful student.”
“I have been poor once, and I have also lived with massive levels of instability and insecurity, having divorced parents, an abusive father, parents who have been through a lot of financial hardships, in a country that was incredibly unstable, having to feed myself and raise my own money to do everything I’ve ever wanted.
“It gave me a sense of power that I can take care of myself.”
Eat the World
When he was 18, Duran left Zimbabwe to travel the world. After arriving in London, he was mugged of the only money he had and spent a night in the South Kensington train station because it had a bathroom. He worked at a youth hostel and as a barman in Earl’s Court, a London neighborhood where Southern Hemisphere expatriates worked. He eventually traveled the world.
“I realized that people are the same everywhere. We have different accents, but we have the same values.
“Until I was 12 or 13, I was educated as racist. Then I learned the opposite. There is no better way to get rid of any biases you have than to be exposed to people of a different culture.”
It was in Madrid, where he wore an earring and a tie-dye T-shirt while playing a guitar in a park, that he met Jennifer.
“There weren’t any obvious signs that would suggest I would do anything at all,” he recalled. “She saw something in me. She said, ‘You are going to eat the world alive, and I believed her.’”
The couple, who now live in Laguna Beach, recently celebrated their 25th anniversary. They have three daughters.
American Dream
After graduating with a degree in finance from St. Louis University, Duran arrived in Southern California. He was offered a job at 3M Co., which he declined because he couldn’t envision financial success at a big corporation. Instead, he took an internship making minimum wage at a small advisory firm, believing there was tremendous upside.
Since he was such a good salesman, he said he was eventually made president. Duran remembered appearing on a television show and receiving a voicemail message from someone who wanted to invest $2 million.
“I called the person and said, ‘First of all, never call a stranger and ask where to send $2 million. And second of all, I’m 23 and I don’t know anything about anything. Let’s first make sure our team can do something for you that is helpful.’ The person was dumbfounded I just didn’t tell him the address.
“It highlights the willingness of Americans to trust. Nowhere else in the world would I have gotten that phone call.”
Duran grew the company, Centurion Capital Management, to several billion dollars in assets under management and in 2001 sold it to GE Capital for $120 million. Duran owned 15% of the firm. Thirteen years after arriving in America “with nothing,” he’d become an American success story.
Boring Industry
Even though GE Capital paid him “like a baseball player,” Duran realized he wasn’t happy, so he quit after a few months. He earned a master’s degree in business from a joint program of Columbia University and the University of California-Berkeley.
He also interviewed 100 entrepreneurs and wrote a book about it. Like other entrepreneurs, Duran realized he had “a massive regret” after selling his company. His book gave him insights into starting a wealth management firm.
“I thought, ‘Can I build a company that helps people live richly rather than focusing on dying rich?’”
Duran said wealth management is “a boring industry.”
“Clients hate it—it gets compared to going to a dentist,” he said. “We’ve completely reimagined what it means to go to a wealth manager. We’ve made it interesting and exciting by talking about life, what are we going to get done this year.
“People want to be happy, avoid pain and take care of the people they love. That mindset populates this entire company.”
