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May 14, 2014 at 08:00 PM
Dan Skiles’ profile in the advisory world was raised last December when he was named president of Shareholders Service Group, the San Diego-based RIA custodian that he joined in 2009. But for many advisors, Skiles was already well-known from his work at two other custodians Jack White & Co., and Charles Schwab & Co. He’s also among that elite coterie of advisor partners who thoroughly understand advisor technology and how it can best be used to improve an advisory firm’s business operations (Disclosure: He writes on that topic in Investment Advisor’s monthly Technology Coach column).
What many advisors may not know is that Skiles also has an entrepreneurial streak: In his youth, he owned a rock-climbing gym, but as he said in an April interview, he realized it was not for him. “I wasn’t passionate about it,” and realizing that “you have to be passionate to be successful,” he began to search around for another profession. That’s when he used an approach he’s honed ever since: He put his network of contacts to work. A “friend of mine, a mentor” told him that whatever he chose to do, he should “surround yourself with smart, honest, passionate people; I’ve done that ever since and that’s made all the difference.”
When he was considering leaving Schwab’s custodian unit where he was a vice president of advisor technology, Skiles said he asked several advisor friends for their advice. They recommended, he said in an interview last December, that he “get involved with all aspects of the business,” not just technology. He has done just that.
Skiles is passionate about employee-owned SSG, which was founded by Chairman and CEO Peter Mangan and Robert Reed and has grown rapidly since Skiles joined the firm in 2009 from less than 400 RIAs on its platform to more than 1,200. Part of his passion for the firm, he said, revolves around working with RIAs. “It’s rewarding to help advisors achieve their goals,” but it also presented an “opportunity to get back to my entrepreneurial roots.”
SSG’s advisors are mostly smaller RIA firms, but Skiles argues that “size doesn’t matter anymore” for small firms, including those “transitioning” from another business model. “It used to be different,” he recalled, because larger firms had access to investment products and technology that smaller firms couldn’t get. However, “with the world of outsourcing, cloud-based systems” and the competition among technology and investment product manufacturers, he said that “in some cases, firms with only $50 million in AUM can run and leverage better technology than even much bigger firms,” partly because those larger firms must use “legacy platforms, which they have to maintain.”
He doesn’t downplay the challenges that “newer, younger firms” face. “Yes, there’s a lot of work to get established,” but if you begin as a true partnership without silos from the beginning, “you have more consistency; you minimize the variables.” That can benefit a smaller firm not just in technology, but in compliance as well, whereas an “older firm’s [compliance operations] might be based on compliance rules put into place 15 to 20 years ago.”
