Ric Edelman: Stay Cutting-Edge on Technology or Fail

"I'm not a marketer; I'm an educator," Edelman said. He learned that "if we give away our education, or make it very cheap, the world will take care of us." That's the main reason why Edelman Financial will add 30 advisors this year, he said.

On technology, Edelman says "we spend a lot of money" to attract and service clients, including his version of what are now called robo-advisors — Edelman Online — and a new website optimized for any device the client is using, especially mobile devices.

Tramantano said that much of his technology budget was spent internally to properly allocate his firm's resources. In 2008, when his Silicon Valley-based firm opened a New York office, "our best technology investment was the cheapest." To draw together employees on both coasts and build a common culture and client experience, Constellation "put a camera on every desktop," so that in every bi-cosastal conversation, "when you call somebody, you see them." In addition to those internal calls, Constellation also video records every meeting of the investment and compliance committees. "It's built one company," he said of the video investment.

Responding to another question from the audience about how to hire advisors, Edelman counseled "don't hire another you," and instead grow first by adding an office manager, IT person or public relations consultant. When you are ready to hire another advisor, first make sure that they share your ethics and be clear about "what you want from them." Stay away from hiring 'stars' who want to do things their own way, since providing a consistent customer experience is paramount.

Edelman, who said he was launching a marketing services offering for advisors later this year, answered moderator Barthel's question about succession planning by saying "we have a very formalized" plan, before turning to the issue of partnerships. "It's good to start with a buy-sell agreement upfront" when you start a partnership, he said, since it "will make the inevitable divorce less acrimonious."

Acknowledging that Edelman Financial has "lots of key-man risk," since Edelman is the only rainmaker (the firm's advisors "don't do any marketing" and "can't take any referrals," focusing instead on client service) he said that his succession plan includes "having six full-time speakers" for seminars and webinars and "a team of writers for the newsletters" that Edelman Financial produces for clients, though Edelman vets the content and, he said, he continues to write his own books.