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With another batch of podcasts in the books and over three years of consistent, monthly episodes, we’d like to once again thank everyone who has listened, subscribed, and given feedback on The COO Roundtable.  We’ve enjoyed having these discussions and hearing your responses to them.  Our interviews to date have included sixty-four operations professionals at sixty-one multi-billion-dollar RIAs across the country, together accounting for over $346.9 billion in client assets under management.  With so many unique topics discussed in the past five episodes, we felt it was the perfect time to recap the top five lessons we’ve learned from our most recent guests.  You can also check out the top lessons from previous episodes here.  Read on for our highlights from episodes thirty-six to forty!

Ep 36 featuring Karl Heckenberg: The 3 Year Anniversary Episode – A Fun Conversation with an Old Friend

With Ep 36, The COO Roundtable celebrated three years since our podcast hit the airwaves.  For this special episode, Matt was joined by Karl Heckenberg, CEO and President of Emigrant Partners for a conversation on trends in the industry, the role COOs play in a firm’s M&A pitch, and the red flags that indicate an RIA’s operations department needs work.

Karl provided some great insight into today’s non-stop M&A landscape and how RIAs should be mindful and honest about the breadth and depth of the work that goes into a merger: “When we sit down with any of our firms or any prospects that we’re meeting with, it’s an area that we really try and get firms to make a decision on. I always say, ‘Look, you don’t have to do M&A.’ Generally, I talk more people out of doing M&A than actually doing it. Unless you’re prepared to put the resources into it, the time, the money, the energy, etc. – it may not go well. We may talk to a hundred people to get a couple of deals that we feel comfortable with, and they want to transact with us.”

When asked if, in his opinion, RIAs are being run as true businesses today, Karl states: “I would believe the vast majority, and it’s often irrespective of size, are not run as true businesses.  They’re really, I would say large lifestyle practices even in the multi-billion-dollar category. Sometimes even up to $10 billion or $15 billion. People are surprised by that. I’ve had the good fortune to invest in businesses outside of wealth and asset management, to really see how those businesses are organized, their focus on how they’re growing their metrics or KPIs, how they’re building out their staffing, how they’re thinking about competitive threats.  They’re really run to maximize shareholder value and creation through equity.  RIAs don’t (run this way).  I think even large, and we see a lot of them, $5 billion, $10 billion RIAs, they’ve been around for 20 or 30 years. They’ve gotten some great tailwinds, really.  They’ve invested, I would say, the bare minimum of what they’ve needed to.”

Ep 37 Jason Mirabella and Tom Preston: How the Operations Role Supports the Entire Firm

For Episode 37, Matt was joined by Jason Mirabella and Tom Preston. Both guests shared how they work with C-suite executives of the firm as well as advisors. Jason stated: “I like to say that the Chief Platform Officer’s job is to make it very hard for advisors to leave, and if they do, make it hurt really bad.  It’s pretty easy to replace things like investment strategies and compliance services. However, it’s leaving deep practice management support, collaborative strategic planning, intentionality around improving the lifestyle of stakeholders and the advisor teams is extremely disruptive. We think that approach will both attract new partnerships and then give them a reason to stay with us for a really long time.”

Building on Jason’s thoughts, Tom added: “(CEO) Jon (Jones) often says that there’s four things that we do at Brighton Jones:  we get people, and we keep people; we get clients, and we keep clients.  We’ve been using that paradigm for quite a number of years. When I first moved into my role as Director of Client Service, I was also asked to head our HR department.  It was the first time we ever had a Director of HR. Using that construct, I was leading three out of the four boxes, if you will, of the organization, and Jon’s primary role was to get clients. Fast forward to today, we’ve got a much different structure. Our C-suite is comprised of a Chief Operating Officer, who’s responsible for things like keep and get people as well as finance technology, et cetera. We’ve got a Chief Marketing Officer, a Director of Corporate Development, a VP of Corporate Development that focuses primarily on new markets and new business lines, a Chief Revenue Officer that is responsible for get clients, a Chief Investment Officer, and then a VP of Client Experience, which is where I live.”

Ep 38 featuring Jennifer Wagoner Kirksey and Trevor Phillippi: Clients Expect More

In this episode, Matt was joined by two guests who understand that the industry has shifted from clients requesting a solid investment portfolio to clients expecting that, in addition to financial planning, and other services.  Trevor shared his experience by saying: “A couple of years ago we were evaluating the financial planning tool that we were using, which to be frank was chosen at the time because it was what we used at the former wirehouse. We had recently brought on a few younger wealth advisors so they had the time, they had the enthusiasm, and they had the tech acumen to really analyze and perform some deep due diligence on the solutions available in the marketplace. Previously, our financial plans were tailored to clients with relatively straightforward financial lives, nothing too complex. We really flipped that on its head and selected a tool that could provide deep analysis and insight for even our most complex clients. We found this to be an incredible value add for those complex and valuable clients. Everyone, regardless of wealth or financial complexity, appreciates being walked through an analysis that covers their financial lives in a way that is easy to understand. It’s not just about determining the likelihood of running out of money during retirement anymore.”

Jennifer added to the conversation by stating: “We do everything in-house, which is why we have 200 employees serving 200 families.  This really allows us to be intimately involved with each client family. We have what we call specialty teams and those include the investments, philanthropy, tax and the one that I oversee, bill pay and bookkeeping. This is a service that many have shied away from because it’s time and people intensive, but it’s been such a huge win not only for our firm but for our clients. We’re paying their bills, we’re doing their financial reporting, and it’s really helping the advisors navigate conversations with the clients that we haven’t really been able to have before. It’s a really sticky business line, and it really allows us to be connected with the client in their daily lives. This is just one of the things that we do that’s different and unique.”

Ep 39 featuring Rob Ziliak and Ryan Armock: The Client Experience Goes Hand-in-Hand with Operations

Matt had a great conversation with our guests on Ep 39 about how they preempt their clients’ needs and affect change on the client experience. Ryan said: “To me, it really helps to listen and read. Listening to your peers, listening to your advisors and your clients, and to understand what’s on their mind. Keep up with the industry trends and the changes in client behavior. Then you can solution and innovate based on your business and client needs. Then after you do all that, then you service the heck out of them. In order to do that, you have to have great people. I’ve been blessed with a great operations staff and a great staff across TAN, some of the most fantastic people in this business.  Those are the boots on the ground when it comes down to servicing those clients and making the experience all that it can be. They’re also the people that can help you be proactive and anticipate the client’s needs because if you’re only reacting to your competition, you’re always going to be sort of behind the 8 ball.  Again, the key is to really think about the experience, put yourself in the client and the advisor’s shoes, and then make sure you have the right processes and technology.”

Rob said, “We actually have a team dedicated to the client and advisor experience. That includes what is the design of that client experience that allows for a degree of consistency, but yet intimate personalization between advisor and client. Then there’s the training aspect so that advisors actually learn how to deliver our designed and desired client experience. It’s a primary responsibility for our overall investment strategy team, policy committee, our financial planning team, and that evidence-driven planning committee, our strategic initiatives.  Being thoughtful around, ‘What more should we be doing for clients and advisors as time goes by?’ Then lastly, our information and technology team, that we’ve talked a lot about during this podcast.  It’s my responsibility to lead the efforts of all of those support departments and teams that help fulfill the client experience.”

Ep 40 featuring Yonhee Gordon and Christine DeMao: Promoting RIA Ownership for Operations Roles

Ep 40 had two amazing guests, both of whom achieved firm ownership via the operations path. When asked how we can promote more RIA ownership for non-revenue-producing roles, Yonhee offered this: “I think leadership needs to recognize that everybody adds value.  We all communicate differently, but there has to be a respect for one another and that complements one another, and that’s so critical in an organization. Yes, you need to have business developers, you need to have client-facing individuals, but you also need a very strong infrastructure to provide that service. It’s a dependent relationship. If you don’t have good support, and that is under operations, you’re not going to have support to service those clients. Then the clients are going to leave. They’re not going to be happy with their service. It is a balance and I always tell the employees, ‘You want to have an impact on the culture.’ When leadership looks at that, they have to look at the impact of the culture, impact on the business, productivity. Then they should be given opportunities for ownership. It just makes all the sense in the world and because again, if you look at that model of the three components to a business: purpose, people, and structure.  They all are dependent on one another.  That’s why I think it’s so important for leadership to recognize that and offer those ownership opportunities to the people in the operations and the non-revenue-facing positions.”

Christine added: “I think the last two years have been the perfect representation of why non-revenue-producing partners matter. Literally overnight, we had to transform our business structure. That focus on practice management, that dedicated focus (that is outside of client focus) is really what made that possible for us having to rework every workflow, having to reconsider the ways that our employees are working, the technology that they’re using. What happens to paper?  What implications are there from a risk perspective?  I think it’s really important from the top down to have a different tone about those roles being in partnership with each other. I think that the last two years have been the perfect example of why it’s so critical for the partnership group to be more broad than simply the client-facing roles.”

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