Mark Tibergien has been a respected leader and mentor throughout his career in the advisory industry, and his retirement from BNY Mellon’s Pershing where he heads the RIA custody business is another lesson for advisors.
“I’m practicing what I preach,” Tibergien, who has advised about succession planning in the RIA industry and other industries and as a consultant at Moss Adams, where he headed the RIA consulting practice before joining Pershing in 2007.
Tibergien had “been thinking about retiring for many years,” intending to retire at the end of 2019 or the beginning of 2020, then went through the “proper vetting process” with the CEOs of BNY Mellon and Pershing to help choose his successor, he told ThinkAdvisor. Benjamin (Ben) Harrison, the firm’s current head of business development and relationship management for its advisory business, will succeed Tibergien effective June 1.
The retirement was “completely my idea — all controlled and planned and right on my timeline if not a little late,” says Tibergien.
He expects to continue writing and speaking, mentoring and coaching, and to join a couple of boards, mostly likely within the advisory industry, something he can’t do in his current job, as outside business interests aren’t allowed. (Tibergien is a regular contributor to Investment Advisor magazine, ThinkAdvisor’s print publication.)
In a wide-ranging discussion, Tibergien imparted his views about where the RIA and custodial industries are heading and the lessons he’s learned working in the business. Here are the highlights.
There will always be a place for smaller advisors. The advisory business is not unlike the accounting and legal professions, says Tibergien. Those fields experienced “tremendous consolidations years ago, but in any community you still see solo estate law and accounting practices … There will always be value for people who choose a lifestyle, enduring business. They‘re not building business beyond themselves; that isn’t their mission.”
The RIA industry is in its second generation. Like other industries he’s worked with, Tibergien says, RIA firms tend to founded by pioneers, then transition leadership to family members or internal investors. Though there have been an increasing number of mergers and acquisitions by outside firms, marking the third generation, that is still a relatively new development in the advisory industry. “We have a ways to go before domination by local and regional providers and with brand identity.”
RIA firms can’t compete on price but on value and service. They are inherently different from the downmarket retail-focused services of Charles Schwab, which acquired TD Ameritrade, or of Goldman Sachs, which acquired United Capital. The objective of those firms is to get clients early and their acquisitions “validate oversupply of clients and undersupply of people to provide advice,” but their clients are different than those of RIA firms.
Fees will be changing in advisory services. “There has to be a disruptor to do it, like Schwab’s subscription program for financial advice or what’s happened in Australia [where] advisors have to declare how much clients are paying in real dollars” (not as a percentage of AUM), says Tibergien. He expects the change will happen when Gen Xers and millennials replace baby boomers as the dominant clients of financial advisors.
RIA firms need to look outside themselves to keep up with consumer demands. They should look at client experiences with Airbnb and Uber, delivering services that are easy to use and emotionally fulfilling, says Tibergien. For example, firms shouldn’t just use environmental, social and governance analysis for investments of philanthropic clients. They should take that a step further to demonstrate the impact that money is making, says Tibergien.
As for lessons learned in his years in the business, Tibergien, offered a few:
- You can never control circumstances, but you can control your decision.
- Time is not your friend. When you’re closer to the end than to the beginning, you have to recognize that someone should be prepared to take on your responsibilities.
- Long-range planning should not be disrupted by short-term acting. “Every business I know has a strategic plan, succession plan and management plan, but then things like coronavirus and Fed rate cut and mergers of competitors come into play,” says Tibergien. Firms should not change the way they do business then, he says.
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