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Practice Management > Building Your Business

2019 IA25 RIA/Advisory Winners

By Janet Levaux

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Michael Kitces is everywhere. He’s the co-founder of XY Planning Network and AdvicePay, has 52,200 followers on Twitter and speaks at about 60 industry events each year.

His Nerd’s Eye View blog is read regularly by about 32,000 subscribers in the advice business. Plus, he leads the wealth-management business and is a partner of the Pinnacle Advisory Group.

In a survey of 1,050 advisors, Kitces found that even with the latest technological innovations, most advisors spend less than 20% of their time in client meetings and just 50% on direct client activity — which suggests “that most financial advisors are still heavily burdened with the tasks of … running an advisory business, and handling the rest of the behind-the-scenes tasks that an advisor must do to support his/her clients,” he said.

Trying to keep up with Kitces’ pace — often by private jet — is Carson Group founder and CEO Ron Carson. The business, which includes Carson Wealth, Carson Coaching and Carson Partners, just announced plans to spend $80 million to build a new headquarters for its growing operations in Omaha.

In December, Carson said he was ending his registration with the Financial Industry Regulatory Authority and would buy up commission-based assets from the firms in Carson’s network that want to follow him.

Ric Edelman, founder of the RIA Edelman Financial Engines, is also on the go — often delivering keynotes at industry events and pushing the envelope in the advice business.

At TD Ameritrade Institutional’s National LINC conference in San Diego in February, he said he was cutting his ties to Bitwise, which makes index and beta crypto-asset funds.

Bitwise “is planning to launch a bitcoin ETF, and if we provide [it] to our clients, we don’t want that to be a conflict of interest,” explained Edelman, who served as an advisor and investor in the venture.

More broadly, the popular speaker and author highlights the speed of technological advancement with the aim of educating advisors. “Ask your client if their job is safe … if their employer is safe …,” he said at the Inside ETFs event earlier this year. “We have to start retraining ourselves to be vital for our clients.”

RIA United Capital founder and CEO Joe Duran told the crowd at Inside ETFs that the value of advisors isn’t their impact on “average clients, because [such clients] don’t exist,” he said. “All of us live once-in-a-lifetime experiences.”

Advisors should think about “what you do in terms of the client experience and deliver it” accordingly, Duran says, pointing to firms that excel at this, like Starbucks, Apple and Southwest Airlines.

“Value is perception, not reality,” he said. “Price is fact. Value is perception 100%. And it’s driven by how [that value] is delivered, how it’s explained to you and how it’s experienced.”

When your clients ask themselves if your work as an advisor is worth the fee, they reflect on the client experience. Their view? “They must feel it’s worth it, which is what great brands understand.”

Recently the level of assets by those using United Capital’s white-label wealth management platform, FinLife Partners, hit $22.5 billion.

Sheryl Garrett — founder of the Garrett Planning Network, a nationwide network of fee-only, hourly-based financial planners for individuals of greatly varied backgrounds and means, and co-founder of RIA Garrett Investment Advisors — inspires by example.

High school teacher Jennifer Lazarus, for instance, read an article about Garrett’s approach to financial planning and was sold on it; she started her own firm in 2005 in Durham, North Carolina.

And Garrett stands up for her beliefs. She spoke out against the SEC’s Regulation Best Interest last summer: “This [Reg BI] is just regulation gone wrong.” Her view is that adhering to a fiduciary standard “has not hurt me [from] a business standpoint,” but she argues that the industry needs “a true fiduciary standard” (not a bureaucratic one).

IA columnist Angie Herbers — managing director and senior consultant at Herbers & Company — has worked on human capital, leadership and management strategies for 1,000-plus advisory firms. To help them, she doesn’t shy away from the tough issues of practice management that can limit business growth.

“The real problems of transitioning to an ensemble come from the owner advisor,” she explained in a recent ThinkAdvisor blog. “What some solo firm owners don’t realize when they start adding other professionals is that their role as owner changes — dramatically. Failing to prepare for, and be comfortable with, those changes can lead to serious problems.”

Herbers’ advice always combines tough love and TLC. “It’s important to remember that although your job may have changed, the business still needs you as the owner,” she added.” Your role is more important than it ever was, now.”

Janet Levaux

@Think_JanetL

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