Dasarte Yarnway may not be a household name, but he could be one soon. He’s at the front end of a movement in the financial advisor world: a movement to bring access, education, and advice not just to the already-wealthy, but to underserved communities.
Yarnway serves as principal at Berknell Advisors, an RIA firm serving over 100 families, and head of community for a new-style advisor custodial platform, Altruist, where he hosts the Human Advisor podcast. Recently, he co-founded Onyx with Emlen Miles-Mattingly of Gen Next Wealth, an advisor community and platform targeting underserved communities but designed for everyone.
We sat down with Dasarte to discuss his experiences as a young, Black advisor trying to find his way in the world, as well as how Onyx is looking to change the face and future of financial advice. Be sure to join us at ExchangeETF.com in April in Miami, where Dasarte will be interviewing Michael Kitces live from the stage to talk about building a next-gen financial advisory practice.
Dave Nadig, director of research, ETF Trends & ETF Database: You didn’t take the traditional route to finance. Can you tell us a little about your journey towards towards where you are today?
Dasarte Yarnway, co-founder, Onyx: I was born and raised in San Francisco to two immigrant parents from Liberia. Liberia is war-torn; they faced 14 years of civil war. When my dad came to the U.S., we moved into a neighborhood that’s now gentrified and very nice, but at the time that I was growing up, that wasn’t the case.
Along the way, there were a couple of defining moments in my life. The first was when my dad was diagnosed with terminal prostate cancer. That shifted my brain to being a protector and a provider for my immediate family. And that’s just stuck with me since I was a kid.
Nadig: How old were you?
Yarnway: I was seven when he got diagnosed. I was 12 when he passed. So when I think about those five or so years, I think about the mental shift that occurred in my brain. You are no longer a boy, you know? I became a man, essentially. I was the person that, when my dad had a cardiac arrest, would spit all the details, like, “This is his blood type. This is how tall he is, this is this.” And the EMTs are like, “Look at this kid. Wow!”
So my mind has been shaped to think about generational wealth legacy, because I’m the only boy carrying my dad’s last name, so I tried to learn how I could impact the world around me. That led me to play football at the University of California, Berkeley. [I went] for two reasons: one, to get the stress off my mom for having to pay for college tuition; and two, they sell you that a college degree is a ticket to stability. I wanted some stability as well.
Nadig: So why the pivot to finance?
Yarnway: Well, I tore my ACL, my MCL, and my foot. It’s a violent game. I was a running back too!
When I graduated, I got a job at Fisher investments, and that was the point where I saw that the “cheat codes” were there, right? Like, “Oh wait, you guys are cheating! You telling me that you can build wealth by investing? That this thing is compounding in your sleep?”
At that exact moment, I charged myself with the responsibility to tell everybody else about it, to take this information from the rich and give it to the people that I felt needed it the most.
Nadig: How did that change your relationship with money, compared to your childhood?
Yarnway: As a kid, I knew that we weren’t rich, but I always had everything that I needed. I actually went to great schools, but I knew that money was always tight. So for me, money was just something that we used. A tool to get by, that we used to survive. But it was not a tool for progression.
When I got to college, it was more of the same. I’m using my meal port points, but I’m still starving. But when I got out of college, and I saw how people used money to reach their goals, to impact the world around them, to create legacy — that’s what I was trying to do since I was 12: use your money to create legacy.
Nadig: You’re obviously a super smart guy. You could have stayed with Fisher Investments and become a buy-side guy or run a hedge fund trading volatility. You could be one of these crypto folks. You could be anybody in this space. So why start your own RIA?
Yarnway: I think that I was hurt, honestly, by the fact that I couldn’t serve the people that I wanted to serve. My dad and mom brought over 50 refugees to the United States. So coming from a family that has a servant leader mindset, it didn’t feel right to me to do anything without giving back. When I saw that being a money manager was reserved for a certain demographic of people, it didn’t sit right with me. I thought, “Hey, I have to make my own business, so I can serve the people that I want to serve, talk to them how I want to talk to them, and teach them the way they need to be taught.” I’m not saying that you have to roll out the private wealth management service for everyone, but you can give them some help, so that they can use their money to do good for themselves, for their families, for their communities. That was the gap that I was trying to fill, and I started by trying to make a business model that would make my services accessible to those type of people.
I’ve transitioned to a hybrid approach: AUM and retainer. Because at the end of the day, I am a business. I have to provide for my family.
Nadig: But you didn’t go the traditional route of hanging an RIA shingle under a big, well-known name. You just started your own.
Yarnway: Yeah. First of all, if I’m going to do anything, I’m going to bet on myself, right? I feel like not many people bet on themselves in this day and age. So much is happening, but the one thing that I can be sure about is that I’m going to do the work. That’s why I was so comfortable at 24 years old, starting Berknell Financial Group, because I’m like, “I’m going to do this and nobody’s going to stop me.”
But why? Honestly, because I’ve lost everything that matters to me. I lost my dad at a young age. I lost my brother in 2015; he had hepatitis when he came back from the war in Liberia. Then my cousin, who also came back from the war, got into a car crash on Super Bowl Sunday when the Super Bowl was in San Francisco. That was two years back-to-back, 2015 and 2016, following my dad in 2003. So I’m like, “What else can I lose?”
The answer is nothing. So I’m going to bet on myself, and if this doesn’t work out, at worst I’ll have more skills, more experience.
At first, every night I would go work at a See’s Candy factory. I’m in there with people that are felons, old ladies, you know what I mean? I was working the forklift. Then I’d come back at like 4:00 in the morning, sleep for a couple hours, go into my WeWork office in downtown San Francisco, put on my suit and act like nothing happened, talking to somebody with a million dollars.
I experimented with a barbell approach. I still had that kind of tiered AUM schedule, then on the other side I had a retainer, and I just thought, “Let’s see if it works.” I remember the moment when I thought, “I’ve just got to go all in on Berknell.” I was at See’s Candy, and I got my weekly check, and it was $200. The same day I charged for a financial plan, and the person was like, “Yeah, I’ll pay $400.”
That’s when I thought, “There’s no way I’m going to work eight hours a day, five days a week and get $200.”
Nadig: Have you had to adapt your model for the pandemic?
Yarnway: So I recently really started to think about the fee schedule. Over the course of the pandemic, I realized that a fair AUM fee doesn’t always work. For everybody that is young in tech, a lot of their net worth isn’t investible; they don’t have a million dollars cash for you to invest. So I specialized in equity compensation: When their equity vests, or their options hit, or they have a liquidity event, I’m already there. It makes sense for me to charge them $6,500 per year on a retainer, and 50 basis points for any assets that we would manage if they come over.
My pitch [was this]: “We’re going to build an organic relationship before you have anything. You make $250,000. You can afford this fee. It’ll be valuable to you. Whenever those RSUs vest (or if they do because at the end of the day, it’s a gamble) I’ll be here to serve you.”
It’s worked out great. With a lot of advisors, their entire revenue model is tied to that 1% AUM fee. But in March 2020, right when the market dipped, we still had consistent income coming in. That might not be the game for a lot of advisors, but it works for us, and I think that we do deep work because of that.
Nadig: How did you end up joining forces with Altruist?
Yarnway: I met Jason Wenk in 2019 at the Wealth/Stack conference in Arizona. I was on stage with I think Doug Boneparth and Tyrone Ross. We just kept close. Eventually, as you know, Tyrone (shout out to Tyrone!) went onto Onramp [author’s note: a crypto for advisors startup] and he reached out and said, “We’re looking for a host for the Altruist podcast, “The Human Advisor.” Can you do it?”
It was actually huge, because I get to learn from somebody who’s a proven businessman in our space. He has a heart for service and is trying to make financial advice more affordable and accessible.
Everything about the technology and platform is just so sleek, so streamlined and so forward-thinking. When you think about the advisor of tomorrow, I see people like me. I see people like Samuel Deane. I see people that are young, ambitious, and are willing to bet on themselves. Altruist is that platform. Everything’s cheaper, from smart partnerships with CRM solutions, financial planning software, to just a sleek way to bill your clients. I think that’s who this is for.
Nadig: A few weeks ago you launched the Onyx advisor network. What’s your vision for that platform?
Yarnway: The vision is to have our industry look more like our country. Right now that’s not the case. I was just at a conference actually in Las Vegas, and I kid you not, Emlen and I were two of five Black men in the entire conference. There was like 1200 advisors there.
So when you think about Onyx, first of all, it’s a stone in which all the colors are included. That’s what the industry should be about. We created Onyx for the underrepresented advisor to start, scale, and sustain their business.
That doesn’t mean that it’s exclusive for people of color, women, women of color, LGBTQ+, but it’s just a place where they know they have a seat. Anybody can join the platform, but we see it as a way for us all to be advocates of the industry of the future.
Nadig: If I’m an advisor who joins Onyx, what does that mean for me?
Yarnway: I’ll break down the services for you. Onyx charges one flat fee for its members, and with that fee, you get ongoing financial compliance services and registration. You also get custodial access through Altruist, although we’re going to add on a couple of partners in the new year.
Advisors get up to 100 accounts for free, then it’s a dollar per account thereafter. There’s no minimum for advisors that are on the Onyx platform. If you think about the cost savings there, and everything they’ll be able to do, it’s huge. A lot of advisors of color didn’t include investment management in their service offering, because they didn’t have that $10 or $25 million AUM minimum to onboard with TD Ameritrade or Schwab. So they’d say, “We’re just financial planners. I can comment on your investment selection, but I can’t do it for you.”
So I think that does wonders, not only for a advisor’s business model, but for the communities that they serve because now they’re getting professional advice and portfolios from an advisor.
The next thing they’ll get is financial planning support. We have partnerships with RightCapital and MoneyGuide Pro, giving advisors the autonomy to make financial plans for their clients. We also have Message Watcher, which is an archiving service to help with compliance for email, blogs, and social media.
We also have a partnership with Vanguard, who will be constructing the Onyx portfolios, so with one click of a button, advisors can invest their clients’ assets in either traditional growth portfolios or SRI ESG type portfolios. Lastly, we have our exclusive CRM partner, Wealthbox.
There will be supplemental tech partners as well. So, if you’re an advisor that does heavy tax work, we’ll have tax software for you. If you’re an advisor that incorporates estate planning, we’ll have that estate planning software. And you’ll pay for that at a deep discount to add to the tech stack that we’re already giving you.
Nadig: You’re also one of the first clients for Shaping Wealth, the new advisor coaching business started by Brian Portnoy [author’s note: Portnoy is the author of “The Geometry of Wealth”]. Does that imply you’re trying to help grow a certain kind of advisor?
Yarnway: So Onyx has four components: compliance solutions, technology, community, and coaching. Coaching is where Shaping Wealth comes in. There’s nobody better to do that than Brian Portnoy and his team. They’re building something great.
We want to make sure that advisors can be educated, right? They can have EQ and IQ, and they can help people. As he says? Help clients reach “funded contentment.”
I love that term. So in partnership with them, we want to make sure that advisors are getting all those classes and that coaching. They’re getting that direct experience in understanding themselves better, so they can understand their clients better. Something that we don’t talk about enough is that how much of our financial advice is given through our own biases. And I think that Brian is on the brink of helping advisors figure out how to be objective in their approach and in serving their clients. Shaping Wealth is going to be a great way to do that.
Nadig: One of the groups you serve is young professional athletes, and there’s a stereotype of the young kid who suddenly has a ton of money and blows it all. Is there truth in that stereotype, and can a financial “coaching” style approach help?
Yarnway: Maybe. Many athletes grew up as have-nots. So now when they get this paycheck, they want to catch up with everything that they didn’t have the opportunity to experience. Can you really blame them, though? I mean, I grew up eating Cup O’Noodles some nights too. I like going to nice restaurants. So can I be that mad, without understanding a person’s trauma?
The athletes I work with are incredibly savvy, incredibly forward-thinking, and they’re trying to make sure that they don’t squander this opportunity that they have. One of my athletes just signed a contract for $22 million, but right before that he was on a rookie league minimum. Still, [more money] comes with unique challenges: entourage, family…
There have been widely written articles about the Black tax. If you are successful coming from an immigrant family such as myself, then you’re going to have responsibility to help your parents, or to help people in your family. Athletes experience that, but times 100. We don’t talk about these things enough. We don’t talk about the experience of the underrepresented person, the experience of the first-generation immigrant, the experience of the athlete. But at the end of the day, when you think about it, we’re still talking about the psychology of wealth. That’s where it is. So if you can do that well, the other 20% can be learned and earned.
Nadig: It sounds like those are the conversations you yourself have when a young athlete walks into your office. Like, “It’s time to get serious.”
Yarnway: It is, and you know what? It’s not always well-received. We live in an age where information is swirling around at 100 miles per hour. Clients have already heard the latest on bitcoin. They want some of that. They’ve already heard about that latest hot stock and how it went up 30% in two months. They’ve already heard about these highflyers. So they’re like, “My portfolio’s only up 12% this year. Should I get into shiba inu coin?”
Sometimes you might be the bad guy, you know? [You have to tell them,] “I think you should just stay the course.” Nobody wants to hear that advice.
Nadig: And not every client’s going to listen to you, right? I’m sure you have clients out there building NFT collections and chasing alt coins. So how do you keep them on the right path? Because sometimes they’re going to just do stuff you think is wrong.
Yarnway: Failure is a better teacher than I can ever be. You have to carve out a portion of somebody’s wealth or income to be able to experiment with. There’s absolutely nothing wrong with that, and I think its thing that all advisors should do. [Tell them,] “If you are so sure about this, do it! But with your financial plan, I’m going to factor in everything that we will be doing together to make sure that we get to your long-term goals.”
We advisors have to understand that it’s not our money. It doesn’t belong to us. We don’t own it. We are charged with the responsibility to help clients do what they want with their money and do it in the most efficient way possible. And I think that that’s just an experience that you and your clients have to have.
One of the best things that I love about my mom is the fact that while I was on a leash, it was pretty long. She allowed me to go out into the world and experience things. But it was a leash with one of those buttons that pulls you back in. I could do what I had to do, then I could come back. If she felt like I was in danger, I needed to be aware of something, she would just reel it in a little bit.
Nadig: I have to say, one of the things I find so exciting is talking to folks like you is that you’re just reinventing the business without asking permission.
Yarnway: Our industry will look a lot like our country in the next five to 10 years. And it’s not going to be slow growth. It’s going to be one of these things that just happens. That’s completely different. A lot more people are owning their businesses, owning their practices, and getting into industries with intention. Like, “I am here to serve X demographic. I’m here to do this.” I think that this is a locomotive; it’s a train that’s coming and you just can’t stop it.
I was having a conversation with [Ritholtz Wealth Management CEO] Josh Brown on my podcast about Web 3.0 and 2.0, and the collision happening right now. How all these ideas and startups and different ways to invest are completely different than what we’ve been trained to do. The advisor that you were trained to be, even that I was trained to be, we all have a steep learning curve ahead of us because this is not traditional.
So for me, what I’m looking forward to is deploying my capital to reinforce what I’m here to do, which is to help community build and help provide access to everyone that needs it — to create a table that’s long enough for everybody to sit at. And I’m doing that in my own ventures. I’m doing that in terms of where I am proximity-wise and where I’m speaking and also providing people access to the platform so they can speak on my podcast, on my blog, and so on.
That’s what I’m looking forward to. And then just enjoying it. I think about the trauma — losing my dad and growing up kind of early — you don’t really stop and celebrate the milestones, because if you stop, then it could stop, you know what I mean? It could stop if I stop. I have to remind myself that it’s okay to smell the flowers. It’s okay to sip a beer. It’s okay to celebrate.
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