From the October 2011 issue of Research Magazine • Subscribe!

September 29, 2011

Ramping Up

Spenser Segal of ActiFi helps advisors make their businesses more efficient and scalable.

As a certified financial planner back in 1990, Spenser Segal ran a retirement plan projection for a couple in their mid-50s who thought they had done everything right. They’d saved $500,000. They had no debt. But it wasn’t enough to support the retirement they had dreamed about. The look in their eyes: utter despair.

“They had never had access to advice before,” says Segal. “I was the first advisor they’d talked to.” That meeting marked a turning point for Segal, a self-described “systems thinker.” Should he go ahead, build a great practice and help a few hundred clients over time or take his talents to tens of thousands of advisors who could in turn help millions of clients?

Today, as CEO and chairman of ActiFi, the 40-year-old Segal is on the short list of industry leaders who are helping transform the way financial advice is delivered. His underlying premise: Help advisors build an exceptional business and they will have the people, processes and technology in place to serve more and more clients.

With ActiFi, the software and solutions company he formed in 2003, Segal helps financial advisors and the institutions that serve them run more effective and profitable businesses. In earlier iterations of his “calling,” as he defines it, Segal was the No. 2 employee at BigCharts and served as vice president of e-commerce strategy and development at American Express Financial Advisors.

He has been called thought leader, innovator and visionary. Segal’s longtime coach Doug Lennick, who co-wrote the highly regarded book Moral Intelligence, puts it this way: “I knew from the beginning that he had it. The guy is able to see where the game needs to be played. He actually understands what’s wrong with the industry — and there are so many things unfortunately that are wrong. He also has solutions. He’s the real deal.”

And Sam Richter, ActiFi’s chief marketing officer, observes: “At the end of the day, running a small business and trying to change the way things are done in big business is really, really hard. He’s sunk his soul, his personal finances, everything he has into this company. It’s truly his mission in life. His vision is to change the entire industry doing what we’re doing at ActiFi. It’s a big picture thing.”

Over the years, Segal has observed that advisors who have the knowledge to build a better business don’t have the time. Meanwhile, people who have the time don’t have the knowledge. That’s where ActiFi steps in.

“How do you bridge that gap: bringing high-level knowledge to running an efficient and effective advisory practice and make it more scalable? That’s the problem we’re solving with advisors and the institutions that support them. The advisor needs the help of a partner, just like clients need the help of the advisor,” says Segal. “A lot of firms have great white papers and great stuff on their websites but few have taken it to the next level: becoming a trusted business partner with the advisor.”

ActiFi’s corporate mantra pushes people, process and technology as critical to building a scalable and efficient practice. But Segal is cautious about grading them in terms of importance. “You’ve got to have all three ingredients. Is it a third-third-third? I don’t know. It depends on the people really. Putting the world’s most fantastic whiz-bang technology in a practice with people who have no readiness to adopt it yields zero business benefits,” he adds. “Yet many advisors fail to realize this.”

Segal’s best advice for advisors who wish to become true business owners? First, understand what matters most from a business point of view. What are your goals and desires as an advisor and how do you combine them with client feedback to create a business plan? Next, take that plan and translate it from a set of goals into the optimal strategy, tactics and tasks that give you the highest chance of achieving your desired outcome. Also, make sure you have the right people in place to complete the tasks. Finally, keep score and stay accountable.

“Every day, I have conversations with advisors and I’ve gotten very good at being able to size up who thinks like a business owner and who thinks like a practitioner. It’s like an on-off switch. You’re wired to think your practice is a business you invest in or wired to think of it as a mechanism to earning a living and doing what you’re good at,” notes Segal. “While there are gradations in-between, there’s a point where you say ‘Yep, I’m committed.’”

While he has never tried to convince an avowed practitioner to change stripes, Segal says: “A lot of advisors make very nice livings and are very happy just being practitioners. If there’s no business when they are done, that’s okay. I’m not one to pass judgment. But certainly one has more value than the other, that’s unquestionable.”

The endgame for Segal: the creation of a valuable and sustainable business that offers the same client experience that the founding principal can deliver in his sleep.

“You want a business that’s bigger and beyond them. If you went on vacation for a year and didn’t show up, didn’t check email, the business would grow or be better. You would come back from your round-the-world trip and you would return to more money and deeper relationships,” he adds. “The firm, the brand, represents a consistent experience.”   

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