What would you say are the biggest changes you’ve seen in the advisory profession in the last 30 years?
If you go back three decades there wasn’t even the beginning of the sense of the ’40 Act world as being businesses. Most ’40 Act activities were either very small and independent with no business-like quality to them–practices like a doctor’s office and there’s still some of that today–or something tacked on the side by happenstance to some other business like mutual funds, bank trust dept, etc., etc. But the notion of actually being a business, run like a business, pretty much didn’t exist. I would say that was still true pretty heavily 20 years ago. In the period of the ’90s that started to change, where people that had thought as practices shifted to think as businesses, people that didn’t exist started businesses to be businesses. Our firm as one example, or let’s say as an example in another part of the world the activities of Ric Edelman, there’s a large world today within investment advice of people that actually think of their businesses as businesses, not like a doctor’s office, or not like something tacked onto the side of something else.
Today the investment advisory business has businesses.
Aside from scale, how would you say your business is different from the average RIA firm?
Aside from scale there’s a very long list of differences. One of them is overwhelmingly we’re the largest direct marketer in investment advice. That is pretty abundantly clear to everyone. Number two, our sales and service model is very different than many others because as a direct marketer and a direct seller, we are vertically integrated, but on top of that we separate the people that do the sale from the people that do post-sale service. There’s no one in our industry that has either the dedicated sales organization we have that doesn’t do service or the dedicated service organization we have that doesn’t do sales. The separation of the two provides us with a number of benefits, one of which is the separation of labor, but another one of which is a prophylactic protection for the client, which is something I’ve always felt that the rest of our industry was missing.
Thirdly, if you look at our industry, one of the features that we distinguished ourselves a long time ago from our industry was a complete full global orientation from the beginning, that most of our industry has not embraced.
Because of our size we’ve been able to come up with forms of innovation and development that smaller firms have difficulty with, but we’ve tried to be in every way we can innovative from the beginning and our role models have always been Main St. role models, not Wall St. role models. For example, I believe we’re the only firm in the industry with a formally designated Chief innovation officer brought in from outside the industry with a prior background in innovation.