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Practice Management > Building Your Business

Mark Tibergien, Reigning Champion: The 2014 IA 25 Profile

By James J. Green

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Mark Tibergien is the only individual to have won a spot on the IA 25 for each of the 12 years that we’ve been publishing the list. Is there anything new to say about his influence on the overall industry, his personal accomplishments (and those whom he has mentored over his career) and his insights into the current state of the advisor business and its future? Turns out there’s plenty.

For one thing, he has a well-honed sense of humor. When he talks about his long-time effort to encourage advisors to build actual succession plans, he responds to the low adoption rate by saying he knows he hasn’t “turned the tide” and that he feels “like a missionary” preaching to deaf ears on the topic, “like Mitt Romney in Paris.” When speaking to a roomful of independent broker-dealer executives at the FSI OneVoice conference this past January, his topic was the future of the BD business. He chided them for pursuing a strategy of “serving the dead and dying,” suggesting that BDs should instead focus on reps who are growing their practices rather than fawning (my adjective, not his) over top producers who are on their way out of the business.

Musing on why it’s apparently difficult to attract younger people to the advisory profession, he likes to say that as an advisor you “profoundly impact the lives of other people. It’s financially rewarding. It’s intellectually stimulating. Throw in walks on the beach and it’s a pretty good personals ad.” Some years back, his stump speech for advisors who wanted to make their practices into businesses included a drawing he’d make on a whiteboard that showed a rounded “W” with a line underneath (W). What did that symbol suggest about the advisor’s role in the business? “That’s your butt on the line,” he’d say, always drawing laughter.

The humor is an effective (and clever) way to introduce topics that many advisors and BD execs would like to avoid addressing head on. Once listeners are thus softened up, they’re more likely to take to heart what Tibergien is suggesting. Which is what, exactly? Let’s start with the importance of human capital, including how to attract and motivate the next generation of advisors, talk about his personal accomplishments as CEO of Pershing Advisor Solutions and get his take on the future of the industry.

From where, I asked in an April interview, did he come up with his focus on the importance of people to the business—from the benchmarking data and consulting he did so well as a partner at Moss Adams? From his personal experiences?

Tibergien’s focus on human capital comes, he replied, from three areas. First, from his experience as an employee: “If you’ve ever been mismanaged, you aspire to something greater.” Second, as a business leader at Moss Adams and Pershing, he saw “the value that an effective manager can bring to an organization.” The third source was a “combination of academic and professional studies that validated” what he already suspected.

Tibergien then segues into another of his trademark approaches: applying intellectual and process rigor to topics or beliefs that advisors and their partners like to say they already possess. “People tend to be somewhat superficial” about their management style, he said. “If you think the key to effective management is to say hello to employees in the elevator, you’ve missed the message.” He then moved on to another, related topic: that properly motivated (or not demotivated) members of your team can accomplish great things. “People are smarter than we give them credit for—they have good intuition on whether someone,” like their manager, “is being sincere.”

His mantra that “you can’t motivate people, you can only demotivate them” is related. “One of the worst things we can do is to underestimate people,” so when you do so as a manager, you “create ‘dissatisfiers’ that take them from being a self-driven person to someone who just wants to get the hell out.” To keep employees committed, they “have to believe, at their core, that they have an impact on the development of others and can support people to achieve their goals.” As a manager, you do have to “provide guardrails” to your reports, but you can then “get out of the way; if they go off the rails, help them out or show them the way out.”

The goal is to make them feel like a “stakeholder of the business” since “in the end, we’re just people. We want to be valued and respected—it’s no different than the playground in grade school.”

For those advisor-owners who are reluctant to let valuable younger employees participate in firm ownership, he asked, “How many times have you heard advisors say, ‘There’s no way I can let an employee become an owner until they’ve suffered as much as I have.’?” He said that this bias against younger advisors “bewilders me.” For one thing, he pointed out that most older advisors “were at one point younger advisors—they weren’t born with grey hair and hemorrhoids” yet somehow “they were able to build businesses.”

Moreover, he noted that “every other profession uses a master/intern concept, but for some reason financial services prefers to eat its young.” However, “if we wanted this to be a profession, we’d think about how this master/internship would evolve: That’s the maturation of the industry.” He gathers hope for the profession from the growth he’s seeing in professional managers and in the growing size and sophistication of many advisory firms, but he warns that there’s another side of the coin to aging advisors. “What’s going to happen to the clients of those advisors? It’s not just advisors who are aging and disappearing, it’s the client base,” he said. The profession must “recognize that Gen X and millennials are accumulating money—just like the boomers did.”

A final word, and bit of humor, about the foolishness of the older generation looking down on a younger generation. “Fresh in my mind is what my father and his friends said about our generation,” he said, referring to baby boomers. “Each of us has gone through these changes—getting wiser is not a function of age,” he said before adding the coda: “It’s amazing to me that the same generation who created Woodstock are now Tea Partiers.”

Accomplishments and Looking Ahead

So what about his call to those BD execs to stop “serving the dead and dying”? Tibergien admitted that in his FSI speech he “intended to be provocative,” but he said it’s necessary because leaders in the industry “have to change the conversation about how they’re going to develop people.” Those reps and advisors who are “winding down don’t matter for business (though they do as people)” while focusing on the “next two generations” does matter. The focus for any firm is to become “an employer of choice.”

As for his accomplishments as the leader of Pershing Advisor Solutions, Tibergien said first that he’s “proudest about surrounding myself with terrific executives who get our mission and our commitment to clients and associates, and who are quite effective at executing what we’re trying to do.” What’s been important about that group of leaders—a combination, he said, “of new blood and old”—has been “getting the right chemistry. It’s a group that works well together and intuitively understands how to work with each other.”

Second, he believes that PAS has helped the larger organization at Pershing and BNY Mellon to “realize the difference and the value of the advisory group and how we can play an important role in supporting” the goals of that larger organization.

Third, he believes “we’ve established ourselves as a leader among advisory firms that serve high-net-worth and ultra-high-net-worth clients.” However, he warns that “it’s still developing; I’m not ready to write my obituary yet.” Instead, “this is a job of continuous improvement—just when you think you’ve got something licked, something else comes up.” Being both gracious and realistic, Tibergien admitted that “we’ve made an impact on the marketplace, but we’re dealing with excellent competitors who we respect a lot.” However, “in the end, we have to keep reminding ourselves to focus on our optimal client rather than be obsessed with our competitors.”

As for the future, Tibergien said, “This is such an incredible business,” and he encourages everyone who has college-age kids “to take a look at” the profession. While he worries that “we’re drowning in regulation,” some of which contradicts and little that elucidates, what problem are we trying to solve? In addition, “we’ve created a scary image of what the business is about” instead of showing how it’s “actually helping people to accomplish goals. It’s a tremendous opportunity—there’s still a lot of money that has to be managed, and that’s an opportunity.” Moreover, “it’s not just here” in the United States where there’s opportunity: “It impresses me how the world is evolving. The capital markets are becoming more important in so many countries, no matter where you’re located.”

(Check out Investment Advisor’s full IA 25 for 2014 list on ThinkAdvisor.)

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