Deciding I Was Not A Salesman

A Letter from Chad Carstensen – 

During my college years I thought I wanted to pursue a career in law, and more specifically, estate planning. While getting my MBA, I interned one summer at a local law firm that practiced solely estate planning. I really enjoyed my time there, but I realized I was more interested in the financial planning aspect than the legal side – it was the people and relationships that I found fulfilling.  So, I decided to nix the legal career, and I began looking for an opportunity to work with various wealth management groups.  Upon completion of my MBA, I took a position at the local Prudential Financial office.

After accepting the job, I was placed in their training program, which included studying for various licenses and learning about the products “Pru” offered.  After completing the program, they felt I was ready to meet clients – yes, as a recent college graduate with 2-months of “training” – because apparently all it takes to meet with clients is to pass an exam. Needless to say, it was not a high bar.


During my time at “Pru”, I was part of a very successful agency.  We were the first agency to win “The Trophy” (#1 agency in US) 4 years in a row.  One would think we had the best advisors.  However, we just had the best sales organization.   As I mentioned before, we were taught how to “sell” various investment products.  I knew this is not how I wanted to grow a practice (through selling products), so I went from working with my manager to seeking out different veteran advisors who I thought ran their practice similarly to how I would want to run mine.  I was able to learn a lot from these advisors and implement their strategies with my clients, but I still felt like what I was offering my clients from an investment standpoint was not the best. I really believed I could find something better for them.


At this point, I started to get recruited by various firms local to me – Morgan Stanley, Wells Fargo, and other small boutique firms.  I thought this would be my opportunity to find a better solution – an investment platform for my clients – so I took the opportunity to meet with them.  They all gave their sales pitch on why their company would be the better fit for me. While I did find that they were able to offer my clients better investments (and maybe more cost-effective investments by having an ETF vs Mutual Fund – or a portfolio of individual stocks vs ETF), none of them talked to me about a specific investment idea; it was always the diversified portfolio and “stay-the-course” mentality – which is what I wanted to steer away from.


In about this same time frame (after taking the job at Pru), I would talk to my uncle Greg about what he was looking at both personally and at his job as an institutional portfolio manager.   He would tell me about specific investment ideas he was looking at both in the credit markets and through real estate.  It pained me to know I could never get my clients into these opportunities (that is, the opportunities that institutions have with investing) even though it made a ton of sense for client portfolios.


After much discussion, Greg realized that people were not getting the investment advice they thought they were getting and that they could benefit from an investment department working on their behalf.  He decided to start Ballast Capital and after my long search for an investment strategy catered to clients, I was willing to take the leap and join him.

While it may be unclear as to how an aspiring law student in New York ended up the Investment Advisor Rep for an Iowa firm, the journey for me was clear. I needed a solution for my clients, and Ballast was just that.

Steve’s Story

Why leave a successful career in accounting & financial reporting?

While I could start my story by going back to graduating from Wartburg College with a major in Mathematics and deciding to be a CPA, I will start in 2008, because that is when the path to Ballast truly began.

After almost 20 years in public accounting, with eight of those years as a partner in a regional accounting firm, I found myself reevaluating my career path. My wife, Jacque, was very patient and supportive as I took the summer of 2008 to contemplate what direction to go. While I did leave public accounting, I decided to stay in accounting and financial reporting, and I accepted a position with American Equity Investment Life Insurance Company (“AEL”).

My first day there was two months after Lehman Brothers filed for bankruptcy.  Needless to say, there was a lot of craziness in the financial services industry at that time. Most people acknowledge that the financial crisis of 2007 – 2008 was caused by the collapse of the subprime mortgage market which developed into a full-blown international crisis.  This all led to widespread credit downgrades of Residential Mortgage Backed Securities (“RMBS”). One of the first projects I was assigned to was helping determine how much loss to recognize in the operating statement for RMBS held in AEL’s investment portfolio.  After a week of research to understand what a RMBS actually is and after reviewing the current pricing of the individual RMBS in AEL’s portfolio, it dawned on me…I thought – I want to buy some of these things personally if I can buy them at these low prices!

I asked a colleague at AEL how I could go about getting RMBS into my brokerage account, and he told me that he didn’t think I probably could.  He thought that only institutional investors were able to purchase structured securities.  Disappointed, I went back to my office… and in walks Greg Carstensen.  Greg, who is now the Chief Investment Officer at Ballast, calmly asked, “Were you serious about wanting to own some RMBS?”  I replied, “Absolutely!!”  He explained how he could help me get there…and he DID help me get there.  It was my first exposure to how Greg is able to take advantage of happenings in the market that result in solid, income-producing assets that are available at discount prices.

That was in 2009, and since then, I have been a disciple of the way Greg makes money make money.  I truly believe that Greg’s strategy – Ballast Capital Advisor’s strategy – is the most responsible and most effective way to manage and build wealth.  It is the main reason that after eight years I left AEL to join the Ballast Capital Advisors team.  Not only do I have the utmost respect for everyone on the Ballast team, but I truly believe in our mission.  We are bringing functional investing to individuals.

What do we mean by functional investing?  It is a method by which we invest our clients’ funds in a way to meet, and hopefully exceed, their financial needs.  It is not investing in the S&P 500 and hoping over time the assets go up in value.  It is investing in assets that are going to produce cash flow – Not cash flow by selling part of a position, but ACTUAL cash returns in the form of interest payments, dividend payments, partnership distributions, etc. It means not having to hope that the price is up when I need the cash.

If you’re interested in an investment strategy that will strive to give you financial security where you don’t have to worry about outliving your savings, Ballast Capital Advisors has the team and the ability to help you get there.  Yes, it takes planning and saving.  But the goal is to help our clients build a portfolio of assets that will provide them with actual cash returns without having to “decumulate” their savings. It means not having to worry about whether the stock market is going up or down over the next 5 years, or 5 months. THAT is real financial security and peace of mind.