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Shannon Eusey

Industry Spotlight > Women in Wealth

‘Tremendous Upside’ for RIA Firms: Beacon Pointe CEO

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The biggest woman-led RIA in America, by assets under management, is based on a business model with at least three distinctive major differentiators, Beacon Pointe Advisors’ CEO, Shannon Eusey, tells ThinkAdvisor in an interview.

For a start, the RIA separates its leadership’s work from the work of its advisors. For the firm’s private wealth clients, it provides access to institutional-quality investments. And its founders — Eusey and her father, Garth Flint — bring a powerful combination of backgrounds in private wealth and the world of institutional investing, respectively.

“Having the institutional side benefit the private wealth clients is incredibly important. Our institutional business was the foundation of the organization when we started in 2002,” Eusey says in the interview.

She and the firm are 2021 ThinkAdvisor LUMINARIES award winners for executive leadership, thought leadership and education, and dealmaking.

Beacon Pointe, with AUM of $26 billion, has been on a buying spree of high-end practices since its first acquisition in 2011.

That has expanded the firm to 40 offices nationwide and more than 13,000 client relationships.

Eusey, 52, was managing investments for private clients at Roxbury Capital Management and studying for her MBA in finance at the University of California, Los Angeles, when she came up with the idea of forming an RIA in partnership with her father, founder of an institutional consultancy in the 1980s.

Now 81, Flint continues to work at Beacon Pointe serving the needs of foundations and endowment clients.

In the interview, Eusey explains the firm’s trademarked “allWEALTH” process, which “parlay[s]” access to institutional-quality investments to private clients that “they otherwise may not have been able to access.”

Highlighting the reality that women control about $10 trillion in assets and are projected to control $30 trillion by 2030, according to McKinsey & Co., Eusey declares in the interview: “It is our responsibility to educate and empower women. We feel it’s part of our duty, given what we do.”

ThinkAdvisor recently interviewed Eusey, who was speaking by phone from Newport Beach, California, where Beacon Pointe is headquartered.

She opines: “There’s more opportunity than challenges in the [RIA] space. For firms making acquisitions and those looking to be acquired, there’s tremendous upside for both.”

Here are excerpts from our interview:

THINKADVISOR: You must have lots of RIAs knocking on your door. Right?

SHANNON EUSEY: We do, but we turn a lot of them away. Our first three screens are: No jerks. No jerks. No jerks.

We want to work with people that value the client and [firm] employees and work with people who share the same values as our organization.

Are your 40 offices across the country all called Beacon Pointe?

Yes, everybody is branded the same, which is very different from some of the other models out there.

We knew that if we had one brand — one story — we’d be able to serve more clients.

What is advisors’ biggest challenge right now?

The biggest challenge for RIA firms is making sure they’ve got the ability to scale business, and having the right technology and capital, which are expensive.

But arguably, there’s more opportunity than challenges in the space. For firms making acquisitions and those looking to be acquired, there’s tremendous upside for both.

What makes an RIA a good candidate for acquisition?

Partnering with another organization could prove to be very helpful to smaller RIA firms or RIAs whose growth is stalled because they’re wearing multiple hats.

[Being acquired] also helps with succession as well as a number of other things, like employee retention and employee growth.

What were you doing right before you co-founded Beacon Pointe?

I grew up in the investment business. My dad [Garth Flint] founded an institutional consulting firm in the 1980s, when I was in high school.

During grad school, I worked as an intern at an asset management firm, Roxbury Capital Management. When the internship ended, they created a job for me.

When I left, I was a senior managing director, managing investments for private wealth clients and helping advance the firm’s socially responsible investing.

How did opening your own firm come about?

In grad school, I wrote a business plan for what is now Beacon Pointe. I convinced by father: “Wouldn’t it be great if we started a firm together?” In 2002, we opened.

Our institutional business was the foundation of the organization when we started.

It was a great combination, with my dad being from the institutional consulting side [advising] foundations and endowments and I from the private wealth side.

Having the institutional side benefit the private wealth clients is incredibly important and was in the original plan.

What made the firm different then and even now?

We were deliberate about having strategic management for the organization versus an advisor ultimately coming up the ranks and becoming the CEO.

I came in as president, and then became CEO.

Was separating leadership from the advisors’ work your concept?

That was my idea. The RIA markets have exploded over the last 20 years, but [when we formed the company], most firms had either a broker-dealer they were taking commissions through or a product they were offering.

The initial approach and part of the business plan was that we needed to separate what the advisors were doing on a day-to-day basis from what the leadership team was doing to help the advisors and ultimately serve the clients’ best interest.

Our thought was to offer clients completely unbiased advice without offering products or additional services that weren’t, maybe, in their best interest.

Do you serve any advisory clients personally?

At the beginning, I did. But for the last decade, I haven’t worked directly with clients. I work with our advisory teams across the firm.

What makes a great leader?

A great team.

Yes, and what else?

I look at myself as Chief Encouragement Officer as opposed to Chief Executive Officer.

I consider our leadership across the organization as CEOs running different aspects of the business.

Certainly I’m available for input, and I’m there to guide and give my thoughts. But I don’t lead on a day-to-day basis.

Please describe your firm’s “allWEALTH” process.

It aligns the client’s life and their wealth. So wherever they are on their investment journey, we’re able to meet them. We execute the approach in three distinct areas:

The first is access to institutional-quality investments. We have a number of institutional clients; and for those, of course, you must have a robust investment platform because you’re dealing with a board of fiduciaries who are holding you to a much higher standard in terms of the investments they expect in clients’ portfolios.

We parlay that approach to our private wealth clients, giving them access to institutional-quality investments they otherwise may not have been able to access because of portfolio size or firm size.

The second pillar helps clients meet their lifetime goals through life planning and legacy planning.

The third pillar is our impact initiative, which is centered around impact investing; getting our next generation prepared; and our Women’s Advisory Institute.

Why is impact investing, or ESG investing, so controversial?

We think of ESG as driven by a client’s values-based investing. Their core values aren’t [necessarily] our values or [other] investment managers’ values.

There’s a bit of a backlash with ESG. People say, “Wait a second — those aren’t life-core values.”

Also, firms may be branding their funds ESG, but some of the investments in those portfolios wouldn’t be considered ESG, according to some people.

So one reason ESG is controversial is that there aren’t standards on how to measure ESG.

What do you think of the new SEC marketing rule?

I like it, but there’s a lot we don’t know about it yet. It’s good for the industry if done in the right way. It will open some new doors for investment advisory firms. But ours probably isn’t going to be the first to go out there doing testimonials.

We do a lot on the marketing side. We’re conducting our own internal research on the rule to see what may make the most sense for our organization.

The rule is definitely a positive; but if it steers clients in the wrong direction with misunderstood or incorrect advertising, it could potentially be a detriment.

How significant to your firm’s growth is being on social media?

Significant! To be able to get the work we’re doing in providing investment advice out on a larger platform to help every advisor across the organization is incredibly powerful.

Please elaborate.

Our goal is to share actionable and empowering content for various audiences across multiple media. That includes emails, podcasts, videos, virtual events, financial literacy workshops.

There’s tremendous opportunity in the social media space because of its wider reach to clients and helping to educate prospective clients as well.

Continuing to make sure that our messaging gets out to all social media outlets and that we’re hitting the audience we can educate and help achieve their lifetime wealth is extremely important.

What’s the mission of your Women’s Advisory Institute?

We feel it’s our responsibility to educate and empower women, who today control roughly $10 trillion in assets and by 2030 are projected to control $30 trillion of wealth, according to McKinsey & Co. research.

The Women’s Advisory Institute is geared toward bringing more women to the investment table — women advisors and women clients. We want to mentor women.

We go in and teach young high school women about the importance of compounding their wealth; we teach them about credit.

We were never taught these things in high school. And it seems kind of crazy that they’re [still] not taught at a basic level.

Also, we wrote “Your Dollars, Our Sense: A Fun & Simple Guide to Money Matters” [Best Seller Publishing, 2018]. It’s primarily for women. It’s like, the girlfriend’s guide to finance.

We feel it’s part of our duty, given what we do, to help educate women. But it’s not really just women. We’re about educating everybody.

With all the market volatility now and crises around the globe, what should advisors be watching to protect their clients’ wealth?

Our philosophy for the last 20 years is that if you focus on the client and what they’re trying to achieve, the external events — while they matter in the short term — don’t matter in the long term.

What are your thoughts about the future of the advice industry?

I’m really excited about the next decade for the industry. The RIA space is still relatively young. There are a lot of great things that will happen there.

The RIA offering is the best offering for end clients.


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