Ryan Cullen Of Cullen Investment Group On How They Are Helping To Promote Financial Inclusion
An Interview With Orlando Zayas
Be Transparent and Educate About Your Products and Services. Banks and other financial institutions have made billions of dollars in fees, expenses, and interest from consumers who did not fully understand the “terms and conditions.”
Most of us take it for granted that we can open a bank or a credit card. But the truth is, according to the World Bank, close to one-third of adults — 1.7 billion — are still unbanked, and have no access to a transaction account. About half of unbanked people include women in poor households in rural areas or out of the workforce. What can be done and what is being done to promote more financial inclusion? Authority Magazine is starting a new series about Companies Helping To Promote Financial Inclusion. In this series we are talking to leaders of companies and organizations who are helping to promote financial inclusion.
As part of this series I had the pleasure to interview Ryan Cullen.
Ryan Cullen was formerly a part of Morgan Stanley Wealth Management before he founded Cullen Investment Group, a registered investment advisory firm. Ryan started the firm to address the racial wealth gap which is perpetuated by other financial services firms’ high minimum asset requirements, which is why he made it a point of emphasis to have no account minimums. Ryan is the youngest sole founder of a registered investment advisory in the State of Ohio’s history, and he also sits on the board of directors of two non-profits, both of which serve low-income and underprivileged individuals in his community.
Thank you so much for doing this with us! Before we dig in, our readers would like to ‘get to know you’. Can you tell us a bit about how you grew up?
My mother had my twin brother and I while she was still in college. She was already breaking barriers as a Hispanic woman studying engineering, a predominantly white and male-centered career path at the time. She went on to have twin boys, which would have been a handful for anyone. That didn’t phase her — she ended up graduating with honors with two engineering degrees and two sons. Our dad was never in the picture, so our mother raised us by herself. She always put us first and she made every effort to send us to the best private schools available because she wanted us to have more opportunities than she had. We were probably the poorest students at every school my brother and I went to, and we were only able to afford our schools through financial aid and scholarships. I remember going over to friends’ houses as a child and thinking their houses were HUGE and that I wanted to have a house that big one day. Growing up, we didn’t have a lot, but I still felt like the luckiest kid alive because of all the opportunities I was given despite our hardships. I have always felt the urge to give back to my community because the community has given so much to me.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
“The Girl With Seven Names” by Hyonseo Lee. It resonated with me because she defected from North Korea when she was 17 years old. She struggled tremendously and was never able to be her true self for fear of being shipped back to North Korea. In the end, not only was she able to succeed outside of North Korea, but she succeeded in getting her whole family out of the country as well. Instead of living out a story of struggle and suffering, she took the few opportunities she was given and turned her story into one of hope, determination, and bravery. In life, we have the option to play it safe and remain stuck in the same place, or we can take risks and work towards a greater future. If Hyonseo Lee had played it safe, she and her family would not have built such a strong foundation for their future.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
“If you do what you love, you’ll never work a day in your life” -Marc Anthony. I originally went to college to study Chemical Engineering and I HATED it. I shadowed people in the field and knew I would make a decent living, but I wouldn’t enjoy the work I would have been doing. I ended up switching my major five times throughout college before I decided on finance. After college I got a job at Morgan Stanley, which many people in the finance industry would consider a “dream job.” The pay was great and so was the work-life balance, but I still felt a lack of fulfillment in my life at that job. I knew there was a bigger calling out there for me. I decided it was finally time to follow my heart and take a major leap towards my life’s calling. I left Morgan Stanley and decided to start my own firm. Looking back, I can truly say it was the best decision I’ve ever made both from a career and happiness standpoint.
How do you define “Leadership”? Can you explain what you mean or give an example?
To me, leadership and being a boss are two entirely different concepts. I actually do not encourage my employees to call me their “boss”. For me, leadership is about motivating and inspiring others to reach a common goal. As a leader, if one of my employees is not succeeding, that is a direct reflection of me as a leader. If they are struggling, it likely means I have failed in giving them the proper skills, resources, or environment to be successful or that I have not motivated and inspired them to work towards the mission of the company. Rather than jumping to any critical conclusions, I like to look at the bigger picture and find a solution we can work towards together.
Can you share the most interesting story that happened to you since you began your career?
I would say the most interesting (and unforeseen) thing that has happened to me since I began my career is that I have developed quite a large and loyal social media following. People must be seeing my name in news or business publications because about a year ago, the followers started pouring in. I make it a priority to provide my followers with value, and frequently provide market commentary, and tips. Although I did not go into this business for the social media following, it has given me the ability to meet people where they are and provide financial advice that resonates, which greatly aligns with my overall mission.
Ok, thank you for all that. Now let’s move to the main focus of our interview. Let’s start with a basic definition so that all of our readers are on the same page. What exactly is Financial Inclusion?
According to the World Bank, financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs. On the most basic level, every person should have the ability to store money safely and send and receive payments with low transaction costs. Allowing people to do those three things includes them in the global economy and allows them to drive economic growth. Financial inclusion doesn’t stop there — financial inclusion also means addressing the discriminatory practices and fixing past wrongs. The only way to build racial equity is to address problems like slavery, Jim Crow, redlining, mass incarceration, the war on drugs, and the effects these problems have had on past and present generations. These barriers have prevented people from building wealth or climbing out of poverty, and it is important to make reparations accordingly. So, what does this look like? One problem that is often overlooked is the fact that there are thousands of bank deserts in predominantly poor and minority areas. A powerful starting point could look like putting a bank branch in an area that needs one. This could also be something like increasing homebuying opportunities for African Americans, who experienced racist and discriminatory policies regarding home ownership until almost the 1980’s. Home ownership is one of the greatest ways people are able to build wealth. For the majority of U.S. history, this country has deprived African Americans of the ability to build equity in their home. Financial inclusion doesn’t mean that we need to treat everyone equally; rather, we need to treat everyone equitably. Right now, financial institutions are required to treat everyone equally when it comes to underwriting, credit, loans, etc. We need to be looking at individuals with a more holistic approach that also considers past discriminatory and racist policies (that many banks participated in and benefitted from) so that the financial systems become fairer and more equitable.
What does it mean to be “unbanked”?
Being unbanked is a term to describe adults who do not use banks or financial institutions in any sort of capacity. Oftentimes, this happens because there are barriers to access in them, like high fees or minimum account balances. There can also be unfortunate extenuating circumstances that prevent them from accessing these institutions’ services.
For the benefit of our readers, can you explain some of the typical reasons why a person might be unbanked? Why can’t they just walk into the local bank and open an account? Why can’t they simply open an account online?
One of the most common reasons why an individual is unbanked is because the upfront costs can create an unnecessarily high barrier for them. This could be because they do not have $1,500 to meet the minimum deposit requirements or they do not make enough to meet the monthly deposit requirement, so they are required to pay a monthly maintenance fee. For someone who cannot meet the monthly $250 deposit requirement and is being forced to pay a $12 maintenance fee, that fee can act as a 5% (or more) tax on someone who does not have a lot of money in the first place. Other reasons would be that they do not have proper documents, like a passport or state-issued driver’s license. Many of us take these for granted, but some people do not have the transportation, financial means, or the time to wait at the DMV to acquire these documents. Another very important factor is that many people do not have access to banks or other financial institutions because they live in a “banking desert,” which is a geographic area in which there is no bank within a 10-mile radius.
In 2014, that number was 1,132 and it is suspected that that number has significantly increased since the pandemic led to the closure of over 3,324 banks in 2020. While this may seem astounding, for many people, especially low-income individuals, transportation is already an issue, so that 10-mile radius is quite large for someone without reliable transportation. For these people, they do not have easy access to a bank and getting to a bank would require much more time and effort than going to a check cashing place, despite the predatory nature of that business model. For instance, within 1 Mile of where I live, there are 15 bank branches and 9 bank-owned ATMs, but I could not imagine having to travel more than 10 miles just to get access to my money. These are just some of the problems domestically; worldwide there are 1.7 billion unbanked individuals. Many individuals worldwide don’t have safe or reliable banks to put their money. We often take the FDIC for granted in the US, but other countries do not have that sort of protection. Additionally, there are vast majorities of the underdeveloped world that do not have access to the internet to open a bank account. They might not have the proper legal documents from their countries (i.e., a birth certificate or ID) to prove their identities, which can be an even stickier situation to navigate. This makes it difficult for billions of people to get access to the financial services they need, which can bar them from getting a mobile phone, traveling for better opportunities, or participating in the global economy.
Can you tell our readers a bit about your work to promote Financial Inclusion? Without saying names, can you share a story about a person who was helped by your initiative?
The main reason I left Morgan Stanley in favor of starting my own firm is because I was diametrically opposed to their exorbitantly high minimum asset requirements. With high minimum asset requirements, it creates unnecessarily high barriers of entry for minority groups. Hispanics and African Americans have one-tenth and one-thirteenth the average net-worth, respectively, of the average white family. These high minimum asset requirements perpetuate the racial wealth gap even further. In Cincinnati, which is 45% African American, I saw this as a huge this as a huge opportunity to help a lot of people who have been overlooked and underserved by the financial services industry for too long. When I started Cullen Investment Group, my first plan of action was to reach out to predominantly Black schools to see if they would be interested in allowing me to come in and talk to their students about financial literacy. I also reached out to Black business owners in the city to see if they would like to accompany me to the schools so they could talk about being a business owner. Although I am a Hispanic small business owner, I pass as white, so I felt it important for the students to see someone who looks like them and not just some random white dude in a suit.
Another monumental moment for me was when a Black business owner who I had become close with and who also shared my passion for helping those who have been overlooked asked me to be on the Board of Directors as the Treasurer for his non-profit. My firm partnered with his non-profit on a variety of initiatives, and he was the first one who agreed to accompany me to teach lessons at the schools. We set out to offer free financial planning and one-on-one financial literacy classes to individuals, many of whom were low-income and had never had access to a financial advisor or any form of financial literacy. At one point, when we were speaking at a school, he pulled me aside and told me his financial situation. He essentially explained to me that although he knew how to run his business and could speak as an authority on that, he did not have the slightest clue when it came to investing, budgeting, or saving for retirement. He asked for my help, and we pored over every financial aspect of his life. In doing so, we realized that he was doing much better than he thought financially. Not only that, but he was making enough to where he could pay himself (he had not been taking a salary at this point and was just reinvesting the money back into the business). I made him a financial plan and walked him through every step along the way. We created a budget and tracked cash flows. Now that he felt more aware of his financial situation and gained a greater sense of confidence in it, he determined that he was financially sound enough to expand his business and open a second store location.
This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for businesses to promote financial inclusion?
Promoting financial inclusion is the cornerstone for building strong and healthy communities. Study after study has shown that the number one indicator for crime is poverty and income inequality. Crime and poverty are directly correlated, and while there are many causes of poverty, much of poverty can be traced to Jim Crow era policies, redlining, and mass incarceration. These policies have disproportionately or solely affected minority groups. Financial inclusion has the power to lift people out of poverty and can drive tremendous economic growth within a community. Financial inclusion means that people can more effectively participate in the global economy, can finance purchases, build credit, have access to capital, start businesses and so much more. When people have access to bank accounts and credit, they are able to purchase things online, sell products online, start saving money and investing for retirement, which are all important drivers of growth in a community.
Ok. Here is the main question of our discussion. You are an influential business leader. Can you please share your “5 Steps Business Should Take To Promote Financial Inclusion”. Kindly share a story or example for each.
- Don’t assume people will come to you. You have to actively go out, target, and find the individuals who would benefit from your financial inclusion. For instance, no one would have known that our firm, Cullen Investment Group, offered free financial planning and financial literacy through our community outreach program or our non-profit partnership, but I actively promoted it because I wanted these programs to be successful. Businesses need to do this as well, by not just having “inclusion programs” to check a box, but actively promote and advertise them so that people are aware that they exist and can utilize them.
- Put your money where your mouth is. Banks and other financial institutions have often overlooked rural, poor, and minority areas, while claiming to make efforts for financial inclusion. What I would like to see is for them to address some of the major overlooked issues like bank deserts. They could easily open a bank branch and offer services to thousands of people. Although these branches might not be their most profitable, it would be one of the best steps they could take towards financial inclusion.
- Microfinancing to provide banking services to unemployed or low-income individuals. For many, microfinancing gives the most underprivileged people or groups access to capital who would otherwise not qualify for traditional financial services. This allows people to take on reasonable small business loans safely in a manner that is still consistent with a bank’s ethical lending practices. For many people, this offers a way for them to start a business, become self-sufficient, and build generational wealth for their family.
- Increase Mobile Payments. Like I previously stated, at a minimum, to promote financial inclusion, people need to be able to store money, send payments, and receive them. Mobile payments help alleviate this burden by doing all three. Unlike in the developed countries where people adopted the landline phone and then later adopted the cellphone, people in the developing world who were behind in technology, skipped over the landline and went straight to adopting cellphones. Why is this important? According to the World Bank, of the 1.7 billion unbanked adults, two-thirds own a mobile phone that could help them access financial services with greater ease. Just by increasing the accessibility of mobile payments, you are essentially able to help two-thirds or almost 1.2 billion people get access to financial services.
- Be Transparent and Educate About Your Products and Services. Banks and other financial institutions have made billions of dollars in fees, expenses, and interest from consumers who did not fully understand the “terms and conditions.” This is a direct reflection of those companies failing to educate consumers on the products and services they are offering. When I was an undergraduate, I took a 10-week internship with Synchrony Financial, the largest provider of private-label credit cards. I felt dishonest working there because of their business model. They would acquire customers at the register by offering a promotional discount if you opened up a credit card right then and there. If you have ever been to a TJ Maxx, Dick’s Sporting Goods, Lowe’s or just about any other store and they ask you, “Would you like to open up a [insert company name] credit card? You can save 10% on your purchase today” what they do not tell you is that they have some of the highest credit card interest rates in the industry and some of the worst rewards amongst credit cards. Most people do not even know how to read the terms and conditions of a credit card statement, let alone understand them, which is why most of the fees and interest are burdened on the back of the poor or undereducated. I personally provide coaching on credit cards and loans because a lot of the people I work with have never had access to any formal financial literacy. They are not aware of how credit cards work or how the companies make money off their consumers. Being transparent and educating consumers about the business model and the costs and fees of your products and services will help with financial inclusion, especially amongst the poor, uneducated, and minorities. What companies tend to forget is that this is great for them as well because happy customers are repeat and referring customers.
You are a person of enormous influence. If you could inspire 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 have thought about this a lot, and while I think there are many injustices and inequities in the world that need our attention, the largest problem facing our species right now is climate change. We are having unprecedented natural disasters almost annually, and while the wealthy have the means to move away or rebuild after a disaster, many developing countries do not have those same means. For instance, Haiti has still not rebuilt from the earthquake in 2010 that killed over a quarter of a million people. Issues like wealth inequality, food security, gender inequality, or economic growth do not carry much weight if the earth becomes uninhabitable. However, I think that making structural changes in clean energy and sustainable technologies could simultaneously address other systemic problems. Overhauling our world’s energy systems with an emphasis on renewable energy and sustainability will be a global effort that requires participation from every country. This sort of massive overhaul could potentially employ billions of people who had previously not participated in the global economy. This would be an all-hands-on-deck situation that would require participation of men, women, skilled laborers, the educated, and the uneducated alike. It It is going to take the cooperation of all of us in order to take actions that have the power to lift billions out of poverty, bridge the divide of both wealth and gender inequality, provide jobs, education, and training. I believe that in order to accomplish the most good for the most people, we need to keep the climate crisis at the forefront of our minds. This is an issue that will affect everyone equally. Unlike certain corporations, Mother Nature doesn’t discriminate based on wealth, gender, politics, or a country’s GDP. Addressing these issues will take a team effort from everyone and could create billions of opportunities for jobs, education, and future prosperity.
Is there a person in the world, or in the US, with whom you would like to have a private breakfast or lunch, and why? He or she might just see this, especially if we tag them. :-)
If there was one person I could have a private lunch with, it would be Alexandra Ocasio-Cortez. Politics aside, I admire her as a person who champions inclusion and social equity. Love her or hate her, you have to admire the way that she leads with compassion. Her influence doesn’t stop there, and she has amassed a huge social media following across all the platforms, gaining the most Twitter followers of any House member. I think the way she has gone from a rather obscure candidate who unseated one of the longest-serving House members to making huge waves as the youngest House member ever elected is really inspiring and a great representation of “the American Dream”.
How can our readers further follow your work online?
You can follow my work online by going to my personal website ryancullen.org; you can follow my company’s work online at our website culleninvestmentgroup.com, or you can follow me on Instagram @therealryancullen (that is the only social media I am remotely active on).
This was very meaningful, thank you so much. We wish you only continued success on your great work!