I wish I would have been more alert to technological tools within the financial services sector in order to enhance customer service, in spite of the large initial costs involved. When I first launched my career in wealth management, manpower and interpersonal skills were of chief importance, and it goes without saying that they still are today. People are our number one ingredient for success, supported by technology as a close second.
As part of our interview series called “5 Things I Wish Someone Told Me Before I Became A Founder”, I had the pleasure of interviewing Isidoro Korngold.
Isidoro Korngold is Chairman of the Board for Intercontinental Wealth Advisors, a comprehensive wealth management and investment advisory firm based in San Antonio, Texas. A native of Lima, Peru, Isidoro Korngold co-founded Intercontinental with John Kauth in 1981 after a distinguished career with the Peruvian Central Bank, as well as high-ranking positions in finance, banking, and research institutions in South America, Washington D.C., and other U.S. cities. He holds a Master of Urban Studies degree from the School of Art and Architecture at Yale University and a Bachelor of Science in Economics from the Wharton School at the University of Pennsylvania.
Thank you so much for joining us in this interview series! Can you tell us a story about what brought you to this specific career path?
During my early childhood growing up in Lima, Peru, I was drawn to reading the histories of prominent banking families such as the Rothschilds and Rockefellers, whose curriculum and stories impressed a nascent interest in this arena. My father, a refugee that left Germany right before the outbreak of WWII, at the time owned a portfolio of stocks — which was a rare event for a person living in an emerging market in the late 50’s — and made his living as a shopkeeper selling men’s suits. This environment highly motivated me to pursue my university career at a time when only a handful of individuals would choose or had the resources to travel abroad. During the summer seasons, I worked as an assistant at my father’s shop in downtown Lima, where the value of delivering high customer satisfaction was instilled in me as being one of the most important drivers of running a successful enterprise. I am grateful to have had supportive parents whose limited savings helped me in my endeavor to attend the Wharton School of Business at the University of Pennsylvania at age 16.
After graduating, I returned to Lima and began a career at the Peruvian Central Bank as a researcher in international trade, and within a few years, I ascended into a position that formed part of a team that directed and influenced monetary policy in the country. While at the Central Bank, I earned a scholarship and decided to pursue a Master’s degree in the School of Architecture at Yale University. Following my tenure at the Central Bank, I embarked on a career in the private sector in order to develop a micro-orientation and hone a greater operational expertise in the field of banking. While serving as CEO of this bank, my home country encountered a great degree of social unrest and political instability that led to a coup d’état that resulted in the nationalization of various sectors of the economy, including the banking arena. This type of environment I knew would only lead to further deterioration and squandered prosperity, which in effect lasted for a few decades.
After traveling around, I found that the United States, specifically San Antonio, could serve as a compatible home where I hoped to never again experience the trauma of immigrating, and where I could also raise my family. Eventually, I landed a position as a university professor at Trinity University, which opened the door to obtaining a visa that allowed me to settle permanently and later on become a nationalized US Citizen. As time went on, I joined a bank in San Antonio where I was in charge of building the international department, which specialized in lending abroad and included the Export-Import Bank-funded programs, as well as expanding the foreign depository base. However, the high degree of tumult that was unfolding in the banking sector as a result of consolidations led me to set out on my own. Notwithstanding, the relationships developed during this part of my career served as the basis for the founding of Intercontinental in 1981. We are very proud to be celebrating Intercontinental’s 40th Anniversary this year.
Can you tell us a story about the hard times that you faced when you first started your journey?
Intercontinental’s original mission was to serve as a lending platform through the Export-Import Bank programs. However, only a few months after its inception, a massive debt crisis ensued, forcing global credit lines to be canceled. This in turn destroyed our business model virtually overnight. With no prospects in sight and a nonexistent revenue stream, we determined that a niche could be established resulting from, ironically, the same economic instability manifested in exchange controls, hyperinflation, and devaluations affecting the lesser developed countries that we initially targeted servicing in the field of international corporate finance. As a consequence, we believed Intercontinental could serve the needs of investors fleeing to safe havens such as the United States. Essentially, we rewrote our business plan. Our assumptions were correct. There was a significant outflow of capital from Latin America into the United States.
Where did you get the drive to continue even though things were so hard?
Coming from humble beginnings was a potent motivational force. The generational strife I experienced firsthand created a spirit of survival and perseverance that encouraged me to strongly envision what services in the financial arena our firm could deliver successfully. Having seen extreme cycles of wealth destruction, the essence of the creation and conservation of wealth for others through time was at the center of my drive. Capturing capital flight was only a part of the equation at the outset. It needed to be properly looked after within a global financial system, that was in the early 80s still in the process of maturing. This premise was the genesis of our client service model, and it has endured for 40 years.
So, how are things going today? How did grit and resilience lead to your eventual success?
Today, we have a diversified client base that includes not only foreigners but many domestic clients, as well as corporations and non-profits. This expansion required the introduction of a host of various services, including alternative investments in middle-market lending, real estate, and private equity, in addition to global market investments that have always been at the forefront of our wealth management services. We also provide insurance-related strategies that are closely related to wealth management. We work closely with experts that create trusts, private investment corporations that serve to provide heightened discretion, tax efficiencies, and more to help reach estate planning goals. We truly play the role of the symphonic orchestra director for our clients, an organizational structure that they have come to expect and appreciate.
What do you think makes your company stand out? Can you share a story?
Before emerging market investing became a recognized asset class, we were primarily trading restructured sovereign Latin American fixed-income securities. At the time of this nascent asset class, it was composed of very few active participants in the market, yet it was well-received by our clients due to their natural affinity to the region. Today, all major financial institutions and fund managers employ hundreds of traders, research teams, and portfolio managers that are actively involved in this asset class, and it is available in wide distribution. The international allocation, which is a hallmark of our origins, today has been expanded to incorporate a wide array of asset classes that fit the profiles of our sophisticated client base.
We are now partnering with our third generation of clients. I fondly remember celebrating weddings of these relationships, then baptisms, holy communions, bar mitzvahs, births — truly witnessing the tree of life unfold throughout the years. As this inevitable cycle repeats itself, we have had the good fortune of implementing and maintaining a strong legacy plan at our firm. Observing multigenerational collaboration among our staff members adds to our clients’ awareness of our keen appreciation for their own multigenerational relationship with our firm.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
There is nothing better to follow than the time-tested tradition of old-fashioned advice. Pay very close attention to your inner and outer wellness. Become mentally fit through oration, your religious practices or spirituality, or meditation. Fine-tune your life with a good balance of exercise, plenty of sleep, and rewarding relationships, combined with a high degree of hard work, sprinkled in with the right amount of decadence. I love a good cigar and a glass or two of Cabernet Sauvignon!
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?
There are too many people that I am indebted to that would just be too extensive to mention. This list is not only made up of mentors that deserve credit for enhancing my life, but also folks much younger than me that I have also learned from, such as colleagues at Intercontinental throughout the years and social acquaintances from all walks of life.
How have you used your success to bring goodness to the world?
I am more than happy to be generous with my time when it comes to offering young adults my advice in their educational decisions and career paths. It goes without saying that age tends to naturally bring the experience and foresight that hopefully can have a positive impact early on in someone’s life. I am also very passionate about supporting cultural and social endeavors. The collective philanthropy within our staff is something we treasure and love.
What are the 5 things you wish someone told you before you founded and started leading your company and why? Please share a story or example for each.
1) I wish I would have been more attuned to interpreting the inherent nature of some of my previous recruitments. I think all employers go through hiring decisions that led to hirings that did not meet my high expectations. At Intercontinental, we have very low turnover, with many of my colleagues dedicating most of their hardworking professional lives to our firm — which is a great honor, and I am truly indebted to them! Yet on a few occasions, I have discovered that an aptitude or background depicted on a curriculum vitae or expressed in an interview did not always translate into job performance or assimilate well with the culture of the firm.
During the formative years of the firm, I was introduced to a “Prince” from Belgium. I naively believed that any Prince had to naturally be related to ultra-high-net-worth individuals and maintained the expectation that his hiring could usher in numerous prospects and clients. The Prince argued the same. However, after the completion of his training, the only “princely” thing about him was his work ethic, or lack thereof. He also later indicated that prospecting wealthy individuals would not bode well for his image. I speculate that there could be a sprawling family tree with many carrying the title “Prince”, but only a handful of individuals that have any real network that they would want to nurture and, in fact, have the motivation to aspire towards greatness. If only I would have spent more time delving into the character of this individual, it could have preempted this regretfully promising assumption.
2) I wish I would been more alert to technological tools within the financial services sector in order to enhance customer service, in spite of the large initial costs involved. When I first launched my career in wealth management, manpower and interpersonal skills were of chief importance, and it goes without saying that they still are today. People are our number one ingredient for success, supported by technology as a close second.
In the early 80s, we were introduced to a highly revered expert in technology who played an important role in inventing the equipment that made up telephone answering machines, and he claimed that we should not purchase personal computers for the firm because that would distract our employees from their work tasks. Looking back today, that advice sounds inconceivable, and I am quite grateful that we did not follow it for more than a short period of time. The computer software programs we utilize today are indispensable features of how we run the business and help to provide the deliverables that our clients value.
3) I wish I would have always focused on the company and not been distracted by what I thought to be at the time compelling opportunities. All business owners know that the “store needs to be mined around the clock” even after the official close of business. In spite of 14-hour workdays and tireless business trips early in my career, I painfully discovered that dedicating time to unrelated business ventures eventually would result in a draining of limited resources from the “main feature”. It was my belief that by taking on other activities, I would diversify my income. Yet in reality, by not focusing on my core business activities a hundred and fifty percent, I am quite convinced that I avoided achieving greater results sooner. In the beginning of our firm, I was involved in a family venture that dealt with foreign language learning modules by way of cassette tapes. As you can imagine, this was quite a remote endeavor that competed fiercely for my time during the building of the business. I guess this would fall into the “mistakes of our youth” category.
4) I wish I would have understood with a keener degree of sensitivity that no matter how many people are designated to perform certain tasks, attention to detail will always remain of consummate importance. You cannot expect pristine results right out of the gate, and never take a complacent attitude in being spared the details. It is patently clear to me now that ongoing supervision leads to successful execution. I have unfortunately discovered that management, particularly at some of the larger organizations I worked at, may rely on a default mindset that prefers to hire more personnel when faced with a large task, when what is inherently at stake is the fundamental lack of detail required to successfully conclude a project.
At the start of the millennium, the firm decided to pursue an advanced technology initiative led by a strong team of people that ultimately enabled improved service offerings for our clients. This work was tedious and cumbersome, but delays and glitches could have been avoided by simply focusing on the details with a more rigorous application. Pardon the cliché, which I will state ad nauseum: “the devil is in the details!”
5) I wish I could have better anticipated the sweeping wave of regulations impacting the development and profitability of the firm. When a new generation of rules and regulations arrived with the introduction of the Patriot Act after September 11th, it was challenging to envision the tectonic shifts in the regulatory landscape awaiting firms industrywide. It is hard to fathom that the financial services sector rivals the degree of regulations in the healthcare sector and frankly, we are not curing chronic illnesses, nor prolonging lives.
“Knowing thy client” in my field of vision comprised a profound relationship with clients that included providing advice on their businesses, comprehending their personal values and high levels of integrity, observing family dynamics closely, etc. In other words, essentially getting at the heart of the underlying humanity of the individual or family. Conversely, the regulatory component involves an important level of documentation that is procedural and must be answered properly. Many years ago, a client sent three wires after the sale of the property: one for the patriarch, and one for each of his two children’s accounts. The amount of money was distributed as a function of the legal ownership structure of the property, however, in the eyes of a regulator, this was categorized as not in keeping with procedures (i.e., one wire). It is of paramount importance to vigorously stay ahead of the complexities faced in the current regulatory environment.
Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
Life brings highs and lows, but they are best handled with stamina and equanimity. We must recognize that the lows can usually be resolved and are transitory in nature. Along those lines, the markets are a metaphor for highs and lows, yet I am a firm believer that progress will prevail — as put to test during the pandemic period over the course of the last year.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I think it is a democratic principle and right that all inhabitants of the world we live in be granted greater assurances that they are being properly and accurately informed. They need to know when they are being told the truth or not so that they can make objective decisions. We are currently living in a dramatic period of great misinformation that I find very disconcerting and detrimental to society as a whole. I think that it is of the utmost importance that a globally certified centralized independent oversight body be created that fact checks and monitors media outlets and commentaries made by influential leaders in real-time. This non-profit entity’s goal would be centered on achieving clarity of mind for society. Think of a world where leaders are elected on the veracity of their statements. Think of a world where media channels convey facts and accuracy in their reporting. That is a world that I would like to live in.
How can our readers further follow your work online?
You can connect with me and follow Intercontinental Wealth Advisors on LinkedIn. Also, be sure to visit our website (https://www.IntercontinentalWealthAdvisors.com) to learn more about Intercontinental and access all kinds of resources, including educational blog posts and videos, webinars, special reports, and more.
This was very inspiring. Thank you so much for joining us!
Thank you for having me!