EP 43 – Transcript

[00:00:11] Luke Sonnen: Hi, I’m Luke Sonnen. Welcome to The COO Roundtable. Powered by PFI Advisors. Here’s your host, Matt Sonnen.

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Now, on to this month’s episode.

[00:00:23] Matt Sonnen: Welcome everyone to Episode 43. We’ve had some large RIAs on our podcast in the past, and today is definitely no exception. Our two guests manage a combined $50 billion of assets and employ over 700 employees. They’ve really had to build out their firm’s operations at scale. So this is really going to be a fascinating discussion.

Joining us from Moneta, headquartered in St. Louis, and with offices in Kansas City, Denver, and Boston is Amanda Barrale, the firm’s Chief Platform Officer. She has been at the firm pretty much her entire career spanning a number of different roles and responsibilities across the operations department. We’re going to learn a lot from Amanda today. Amanda, welcome to The COO Roundtable.

[00:01:08] Amanda Barrale: Thank you. I’m really excited to be here. This is my favorite area to speak on. I’m excited.

[00:01:13] Matt Sonnen: Great. Awesome. Joining Amanda from Wealthspire, headquartered in New York City, and they have a total of 19 offices around the country is the firm’s president and Chief Operating Officer, Eric Sontag. Eric has had a long career in RIA operations, and I’m going to let him walk through his career path in just a minute. Eric, thanks for being here today.

[00:01:37] Eric Sontag: Pleasure to be here. Thanks for having me, Matt.

[00:01:39] Matt Sonnen: Great. Well, Amanda, I’m going to start with you. Why don’t you tell us a little bit about Moneta?

[00:01:45] Amanda Barrale: Yeah, absolutely. Moneta’s lineage actually can be traced back about 150 years to the insurance business. Back in 1988, the organization was officially renamed Moneta, and in 1989, became a Registered Investment Advisor. Currently, we manage about $32.8 billion in assets under management with about 440 employees that make up our client-facing and then back-office teams.

Moneta works with people at every stage of life to achieve their financial goals. We take a holistic approach to find a best fit solution for several types of clients that typically fall into one of three categories. First is a category that we called our family CFO clients. Successful families that are looking for our comprehensive approach to financial planning. Then our family office clients, which are the ultra-high net worth clients, and then institutional and retirement plan clients.

In terms of growth, historically, we have grown organically. But over the last six years, we have focused on building out our platform offerings to be able to support more inorganic growth through M&A. So as this has happened, we’ve had more experience in the mergers area. In that, we were wanting to make sure that in these transactions, there’s a great cultural fit. Then we’ve also just been exploring what acquisitions look like for us as well.

[00:03:05] Matt Sonnen: Great. Eric, I’ll let you give us some background on Wealthspire.

[00:03:10] Eric Sontag: Sure. The firm dates back actually to 1995 when it was known as Sontag Advisory, that was founded by my father Howard. He had a JD and LLM in taxation. He was working with high-net-worth clients doing planning at Lazard. At one point, he had this realization that always putting clients into Lazard-run funds, even as high quality as a firm as it is, and was, it just didn’t feel like a true advisory relationship.

Hung up the shingle, started his own firm that was driven by in his words sitting on the same side of the table as his clients, and being a true open architecture fiduciary, and given his JD and the tax background. It was heavily focused on estate planning as much as the financial planning. That mission really hasn’t changed over the last 27 years. Of course, the brand and organization has.

In 2018, Sontag Advisory was a $6 billion firm. It had grown entirely organically. It was primarily in New York City and a small satellite office in Connecticut. I was actually in an industry study group for a few years where I met a principal at a firm called Bronfman Rothschild, which was another $6 billion firm in the DC metro area and Wisconsin.

Very organically through our study group, Bill Schwartz, who is the principal, we recognized the similar and complementary aspects of our businesses and the growing importance of scale. Eventually, we crossed that bridge of, ‘Hey, what would this look like if we combined?’ Ultimately, Sontag acquired Bronfman in 2019, and as part of that transformative merger, we knew a rebranding was necessary and Wealthspire as of today was born.

Since then, we’ve made multiple acquisitions of culturally aligned and like-minded firms. We serve three client segments. The primary one, generally speaking, is clients with between $1 million and $20 million, where we offer a comprehensive suite of services covering a wide array of financial planning, investment management, and estate planning areas. We have a family office services segment for clients that typically exceed $20 million in assets.

They have a lot more complexity with respect to trust and estate work, inter-generational planning, and legacy planning, and we have an in-house trust and estates team that is a big part of that offering. Finally, for the Henrys, if you will, we have a segment called Wealthspire Pathways and those are for clients with fewer full-service wealth management needs, and they’re really looking to work with a dedicated financial advisor in a cost-effective way.

One last thing I’ll touch on is plans for growth going forward. We strongly believe in a need to grow both organically and inorganically through acquisition. Organic growth is definitely the lifeblood of any organization, in my opinion. Acquisitions are critical for getting talent and for finding teams that in turn help boost organic growth in the future.

I think people often think of organic versus inorganic as if they’re completely independent forms of growth, when in fact, I view them as highly connected. We don’t have specific targets about what our size is going to be, or we’re going to double or triple in next years. We’re never going to be the highest volume acquirer that’s out there. We really need to find the right firms to acquire and grow the right way.

[00:06:40] Matt Sonnen: You’re both active in M&A and we’re going to touch on that in just a minute. First, Eric, why don’t you walk us through your career progression and how you wound up as president and COO at Wealthspire?

[00:06:53] Eric Sontag: Sure. I’ll give my dad credit that he didn’t push me too hard. I think as any parent knows, is I have a seven and four-year-old that attempting to do that usually backfires. Instead, my interest stemmed from really witnessing day in and day out a parent who absolutely loved his work. Like most advisors, he formed incredibly deep connections with his clients. Many of them are his closest friends today.

The passion and pride he had in his work, it was just contagious and impossible to miss. In any event, I wanted to do my own thing after college, and I wasn’t sure if the RIA world was right for me. I started my career at BlackRock. I went through various training programs as an analyst, as an associate. I spent a few years in their New York office, and then they sent me to their London office for two years. Overall, fantastic experience on the investment and risk management side.

I joined Sontag Advisory in 2009, on the investment side, and I was meeting with investment managers every day. Also got my CFA at that point and we were about 20 people at the time. BlackRock was actually a very tech-driven firm. I was shocked when I saw some of the inner workings of the RIA industry. I just became very passionate about improving technology and operations.

Some of that was because I love making things more efficient and better, but it was also seeing about how the time of our staff was being used. I always remember watching one of our senior associates, spending half a day printing and stapling trade tickets, and I was just so horrified. I thought, “Wow, we really need a rebalancing system.” That was one of the first investments we made. It was a few years into the job, we had five partners at the firm, I said, “We really need to hire a COO.”

They asked me if I would consider taking the job. It came as a bit of a shock to me. I always thought of myself as more of the investment side, but it was one of the best career decisions I’ve ever made. I haven’t looked back. My role now as COO, president of a 270-person firm, and around $19 billion, I forgot some of our stats, it’s very different than it was then. I couldn’t be happier with the path that I ultimately took.

[00:09:15] Matt Sonnen: We’ve talked about it a lot on this podcast, the need to just keep raising your hand to take on more responsibility and to figure out your niche within the firm. Amanda, I know that’s a big part of your story. Can you give us an overview of the various roles you’ve held on your way to the Chief Platform Officer at Moneta?

[00:09:36] Amanda Barrale: Yes, absolutely. I initially started back at Moneta in 2007, fresh out of college with a degree that had absolutely nothing to do with financial services at all. I actually have a degree in criminology and a secondary degree in German, which quite frankly, makes zero sense as to why I wound up where I am today.

When I got out of college was just really looking for something that was going to be more process-oriented and found my way to Moneta. I started working as a client service manager with one of our partners at the firm. Really, he took me in and taught me a lot about the industry from the ground up.

I got the opportunity to meet with clients and learn about back-office process from a team perspective in which I learned. I feel like we don’t necessarily– There are so many different partners at Moneta. I knew there were a lot of different ways of doing things, and our back office at that point was very small. So, when I got the opportunity to grow into more an operations-based role on the team, I was able to jump at that.

I worked as an Operations Manager for that team and got to build out and merge two teams together because my partner team merged with another partner team. I got to look at processes across two different businesses and figure out, ‘Okay, well, what’s the best way to do this?’ From there, I got to coordinate a lot with our back office on training programs. I got to be a guinea pig, because as you mentioned before, being able to raise your hand, that’s the best thing that you can do for your career.

From there, I moved into a space of technical training and project management. I started looking at the smaller technology stack that we had back then and figuring out, “Well, how can we grow this?” At that point in time, we didn’t have a lot of systems that were necessarily talking to each other. You had a lot of advisors that were using proprietary-built analysis, and we had a lot of different databases that were housing information.

We started looking at the technology stack and really refining and deciding what was important to us, what did we need to be able to function and run an efficient business, and we started building from there. I spent a lot of time in the project management space and business systems, grew into a director of business systems over time. I worked very closely with our data aggregation tools, CRM, tax planning software, financial planning tools.

Then, as Moneta has continued to grow over time, had the opportunity to grow into the Chief Platform Officer. Really been able to focus on looking at, not only our technology stack, but then how are we applying operational practices to that technology stack and ensuring that the business is able to focus on what’s truly important, really focus on the clients, and ensure that they have the support that they need from a back-office perspective.

[00:12:29] Matt Sonnen: We talk with our consulting clients all the time. Everybody thinks, ‘Once I’ve made the tech choice, my job is done.’

[00:12:38] Amanda Barrale: Oh, just starting.

[00:12:40] Matt Sonnen: Yes. It’s the process around the technology that’s hard.

[00:12:43] Amanda Barrale: Absolutely.

[00:12:44] Matt Sonnen: Eric, you talked about M&A a little bit. I always love talking about the role operations plays in firm’s M&A strategy. I’m going to go to Amanda first on this one. Amanda, how do you use your firm’s operations platform to attract advisors to Moneta?

[00:13:05] Amanda Barrale: Well, I think what’s really important is to identify why is an advisor looking to join Moneta? What pain points are you currently experiencing that are causing you to look outside and decide what’s really best for your practice? Whether it be you are currently getting bogged down in the day-to-day of compliance, and you’re still also having to focus on your client book, and then you also have a lot of marketing issues that are coming through.

What you really need to be able to look at is, how can Moneta support you in your endeavor of growing your practice and growing your business the way that you want to? Our operational offerings for those firms are built to really solve a lot of those pain points. We have our back office structured as such that these firms will have access to, not only compliance resources, marketing, investment, research, and diligence, you have also the facilitation of onboarding a client.

We take care of new client onboarding, getting them set up with their accounts. The custodian is tracking the TOAs. Those are a lot of those tasks that have to happen for the advisor throughout to the day to make sure you’re taking care of the client but doesn’t necessarily need to be done by the advisor or the advisor staff.

Could that actually be done because it’s a scalable, repeatable process by a back office to give that time back to the advisor, so that way they can really focus on what’s important to them and what’s important to their clients? We really utilize that operations platform to ensure that any advisor that’s going to be coming to Moneta has that taken– They can feel confident that that’s being taken care of for them through this process. We want to make sure that they have time for practice management, that they’re not so tied down in actual practice operations.

[00:14:51] Matt Sonnen: Great. Eric, I’m going to ask you a slightly different question. You touched on this a little bit. How do you use M&A to bring on operations talent, not necessarily advisors, but just the talent? How do you bring them onto Wealthspire?

[00:15:06] Eric Sontag: As I had mentioned, you alluded to, we acquire for talent first and foremost. We always ask two questions when it comes to acquisitions, and they’re equally important: One, is it better for clients? Two, is it better for staff? With that in mind, I’ll answer your question about attracting operations talent from two different angles.

The first is that we’re more attracted to firms with great operational staff. It wasn’t that long ago that we had a three-person investment team supporting like $5 billion in assets. Now, at 19 or so, we have 15 members of the investment team. The same goes for client operations department, which was 10, 12 people at the beginning of 2021, and now, it’s at 20.

I saw an article that Michael Kitces had spoke recently at a conference to this point, that advice is not scalable. I think that’s widely accepted for advisors and their role, but it’s underappreciated for operations and back office. It more or less takes twice as long to open 50 accounts at a custodian as it does for 25, so you really need more operational staff as you grow.

When we acquire firms that have really strong operations, that’s a reflection of the depth of their operational staff. It gets us that much more excited to bring them onto the team. In short, the strength of a firm’s operations team absolutely impacts our desire to acquire that business.

Flipping it the other way, our desire to add operations talent is also a key point when we meet with the sellers.

Matt, I know you often like to highlight on this podcast that sometimes our industry suffers from this perception, this really awful perception that operational staff is viewed as less important, for lack of a better word, than the advisors. I’m happy to report that when we speak with sellers in the acquisition process and the ones that we meet with, they deeply, deeply care about the impact of the acquisition on their entire staff.

In fact, we had an acquisition last year where that was one of the primary drivers was a recognition that keeping his talent on the operational side was going to be much more difficult versus firms of scale that can provide career pathing and other things that I know we’re going to be touching on. When sellers see the degree to which we value adding talent in operational areas equally and just as much as we care about adding new advisors, it’s a really powerful and welcomed message.

[00:17:58] Matt Sonnen: You mentioned Michael Kitces’s phrase, “Advice is not scalable.” That’s exactly where I wanted to go on the next question. It’s a topic that comes up a lot with our clients. This balancing act between customization and scalability. Every advisor wants their client to think that they’re offering them a one-of-a-kind solution to their investment objectives.

At the same time, you will limit the number of clients that you can serve if every single client is receiving a fully customizable or customized service offering. I’m curious, I’m going to ask both of you how you’ve solved for this. Amanda, I’ll go to you first. I know you’ve spent a lot of time focused on this in the search for that middle ground.

[00:18:40] Amanda Barrale: Yes, absolutely. It’s not so much that you can’t even provide something that is customized to your client, it’s that you have to be smart about the data that you’re providing and how you’re gathering that data and how you’re interpreting that data. We’ve spent a lot of time having conversations with our advisors about ‘What’s important to you?’ ‘What are you hearing that’s important to your clients?’ and then, ‘How are we able to track that for you, what type of tools are we utilizing to track that information?’ That way, we’re creating thoughtful output where you have the ability to pull a lever here or pull a lever there to put customization into these presentations.

We don’t want to give you something one that’s– You’re not going to have a canned response to every single client. We want to make sure also that it’s beneficial to the client and that you’re showing them everything that they’re requesting over the course of your relationship with them.

We spend a lot of time looking at the data that we have, analyzing that data, and then meeting with advisors to come up with, whether it be a formatting of a report, or is it coming up with an analysis and an onscreen experience for them based off of how they like to receive this information. It’s something that the entire firm could use because we do have a lot of similar clients across books of business, but the way Moneta is set up, you also have the ability to be your own entrepreneur, really. You have your own– each practice has the ability to show any number of analysis to their clients.

Then they will now– the way that we have things set up, they’re able to share this information and present that in a thoughtful way for each individual client utilizing the data sets that we’ve had. Before, we had information stored in so many different places that it was difficult to do this, but we’ve spent a lot of time and a lot of efforts being able to come up with standards that have really helped us in this type of presentation for clients.

[00:20:42] Matt Sonnen: Eric, how are you tackling the customization versus scalability conundrum?

[00:20:49] Eric Sontag: Yes, this is a question that’s– it’s very near and dear to my heart and we talk about it all the time. A quick story, when we rebranded and formed modern day Wealthspire, we had 50 leaders from across a company come together, for an exercise to create a set of core cultural beliefs. We came up with six, but there was one that got by far the most discussion time and heated debates and that was about that exact trade off of scalability versus customization.

Ultimately, we created this cultural belief it’s called pursue balance, and it reads, “I create a flexible environment where scale and efficiency complement uniqueness.” I think Amanda was touching on this as well. I have a few guiding principles around this debate. You want to retain and foster a spirit of empowerment and idea generation, and you can’t just force things for the sake of consistency in of itself. It needs to align with the vision of the firm.

I think we on the operational side sometimes default to this like, all hail consistency type of attitude and that more consistency is always better. Like everything else for me, the devil’s in the details and consistency can mean very different things to different people. For Wealthspire, the type of consistency I think about is like Ritz-Carlton or Four Seasons. If you stay at multiple Ritz properties, you’re not going to get an identical or cookie cutter, or I think Amanda said canned, experience at each. But you have a very consistent experience in a lot of ways.

You know you’re staying at a Ritz because of the quality and level of service is pretty consistent. They share common elements like the Ritz kids club or the rooms in common areas have similar branding elements, you’re using the same booking system and stuff like that. That’s how I think about Wealthspire. Our advisors have different strengths and weaknesses. Some are going to go more weeds on investments and are going to want reports with their clients that are going to go more into the weeds on investment detail than others.

Some of our advisors are going to excel in terms of the bedside manner they have in terms of working with a client going through a painful divorce while others may be not as much. Should a client have an identical experience working with every advisor at the firm? No, I don’t think so, but at the same time, it should never feel like the client is working with a different firm. For me that’s really the critical distinction.

Just to put it into practice, I’ll highlight an example. We require that everyone use the same CRM and reporting platform because those systems are highly integrated into the overall daily operations and the service delivery and workflows in the client experience. Within our reporting platform, we have many different templates out there for advisors to choose from, in terms of meeting prep or quarterly reports, because we do want to deliver a personalized experience from that respect that caters to client preferences.

I’ll end with this, as the firm grows, you don’t want to lose that spirit of experimenting and testing new ideas. I think that can hamper ingenuity, create excessive bureaucracy, and it can also demoralize staff who are passionate about adopting new and better ways of working. We really aim for that balance where different teams can try new processes and techniques as long as there’s– working on the same tech stack and sort of critical and core processes are shared. Then as they try new other new techniques and experiment, we want to create an environment where they could share best practices with one another.

[00:24:33] Matt Sonnen: Somewhat of a continuation on this discussion of customized versus scalability, is whether or not a firm centralizes their operations tasks, or if they let each advisor have their own individual service team or pod, I often hear that phrase pod. Eric, what tasks have you centralized versus which tasks are held with the advisory teams themselves?

[00:24:57] Eric Sontag: Yes, at a very high level, we aim to centralize tasks that are more repeatable and scalable and don’t– actually, more repeatable, more so than scalable– and that don’t require personalization or catering to client preferences. Let me take a step back on the bigger question of whether to centralize or not.

There’s a well-known African proverb I like to cite when this question comes up, which is, “If you want to go fast, go alone. If you want to go far, go together.” I think the argument for decentralizing usually comes from a place of believing it’s more efficient to go it alone and have a dedicated client service person on your team. In theory, I can understand why someone might feel that way, but in practice and especially as a firm grows in size, I don’t think it works and I have a clear bias towards centralization.

It’s so much more than just getting like redundancy, it’s about opportunities for better training, mentorship, allowing for career paths, and specialization to name a few other benefits. One specific element of our org structure that I’ll highlight on this topic, we bifurcate the role of a client service associate that we call it CSA and client operations.

We have the CSA is assigned to specific clients and they’re generally going to work with one or two advisors, and they are engaged with the client day in and day out. They get to know these clients in very well. They’re not actually the ones dealing with Schwab or Fidelity or the execution of account opening or onboarding. Instead, they’re tasking that out to our centralized client operations department and the centralized client operations department does not engage directly with clients.

The CSA is– the goal of the structure is really to free up the time of client facing staff such as CSAs, to allow them to both work with more clients and provide more personalized service. The way I think about it is, a client’s going to call their CSA to follow up on things like, “Was that charitable gift done? Can you send something to my accountant?” They’re also going to want to talk about weekend plans.

We want the CSA leaning into that conversation and talking about weekend plans and how they’re spending the holiday and so forth. We don’t want them rushing the client off the phone because they just learned that there’s a NIGO that they have to go resolve. That is for the centralized client operations team to deal with.

Importantly, while both CSAs and client op staff are service and task-oriented, this separation allows those who love engaging with clients, which are the CSAs to really lean in on that. Then for client op staff, where they really prefer the back-office aspects, they can lean in there as well.

[00:27:56] Matt Sonnen: Amanda, I know you’ve got a mantra, repeatable processes automated by workflow. Walk us through that.

[00:28:04] Amanda Barrale: Absolutely. We have over the past three years, actually started building out our centralized operations department and basically started from scratch because we ran into that conundrum of, we are getting to the point with our advisory teams where the number of client service managers keeps growing and growing, but you’re not necessarily seeing any let up in what’s getting pushed onto their plate.

Are there processes that these Client Service Managers are currently working on that could be done maybe more efficiently, because it is a repeatable process by back office? We started to build out our new client onboarding and then our client support teams, where we were taking a look at the new life cycle of a client and onboarding those accounts. What does that mean from a CRM perspective? What does that mean from a custodian perspective?

Then once those accounts are open, how are every single team or how have every single team been working to go through this process? We were finding that we were getting different answers from teams as we started looking at the metrics from our custodians and what we were seeing across NIGOs and through our monthly and weekly conversations, looking for areas of improvement, took a pause and said, “Wait a second. We should be meeting with our Operations Managers from each one of the client facing teams and saying, ‘What can we take from you and start building out those processes?’”

To those Operations Managers’ and Client Service Managers’ credit, they really gave us the space to say, “We think that we can really help you in this area so that you can refocus and then also be speaking with more of your clients.” There was also a want from that side of the business as well, to be able to have that opportunity to do it, but there just wasn’t the capacity. We worked very closely in testing what would work and what didn’t work coming up with these processes that would be repeatable, that we could then build out a great back-office operational team that could get these processes across the finish line. Then build out the infrastructure and the reporting in place for them so, that way, they felt confident and comfortable with what was going on, how we were communicating with them.

In some cases, our back-office actually does send new client onboarding packets directly to the client. We worked very closely with teams to say, “Here’s the messaging that’s going to go out. Here’s what they’re going to receive through DocuSign,” so we’re ensuring that the client experience matches what the advisory team expectation is, and that there’s not any miscommunication between the two.

It took a while through the testing process to get us to where everyone was comfortable. It’s been amazing to see how this has actually grown, because we have some teams now, who before were like, ‘Ugh, you know what? I don’t really know how you’re going to be able to do this.’ We’ve got the system down, and we know what we’re doing.

Over time, as we’ve had them be a part of the process, and been very inclusive and very thoughtful in how we’re introjecting into any one component of these operations, it’s become something where they’re now saying, ‘I can’t believe I was fighting you on that. I can’t believe I wanted to keep that one piece of paperwork,’ or, ‘I really want to track that TOA,’ or, ‘I really wanted to put in that cost-basis.’

[00:31:25] Matt Sonnen: I love how both of you have tackled this. Everyone struggles with this, that bifurcation of, “Where does operations stop, and clients–” It’s all client service, but where does back-office operations and client-facing, client service folks– Where is that bifurcation? This is fascinating, how both of you have tackled this.

[00:31:44] Amanda Barrale: I think you both– and I think you have to really approach it from a team aspect. We’re not really two different teams. You’re one team.

[00:31:51] Matt Sonnen: Yes. That’s great.

[00:31:53] Eric Sontag: Yes, totally agree. Amanda, those advisors that you highlighted– and we’ve had the same experience, where they’re naysayers at first, and then ultimately, they come around. They become the best sales people for new joiners, right?

[00:32:09] Amanda Barrale: Absolutely.

[00:32:12] Matt Sonnen: Well, let me switch gears a little bit. I want to talk about how we’ve had to reinvent how we work, over the past few years. On a day-to-day basis now, we’re not always sitting next to one another any longer. I’m curious, what kind of data or intelligence are you both using to make this new working model successful, especially in a remote working environment? Eric, I’ll let you go first on this one.

[00:32:38] Eric Sontag: Yes, I think that it’s a great question. It’s spot on. Data absolutely plays a more prominent role as the office has moved more to a hybrid environment. A classic example I think of relates to a centralized custodian and client operations. Previously, the manager– Let’s say there was a manager of that centralized operations team, she’s standing alongside her team and is able– Just from being attentive to the environment, she’s going to get a decent sense of who’s able to accomplish which types of tasks well, client-specific issues, clashes between centralized and client-facing staff, and the like. In a more remote environment, it’s just a much bigger challenge.

As much as we can tell people to speak up and tell us when things are not working, and emphasize that we’re an open culture that supports that, human nature can get in the way. A lot of people don’t like to go out of their way to tell a manager, or someone, that there’s an issue going on or tasks aren’t getting down well. They feel like they’re tattling.

We felt the need to add more fields to our CRM, to measure more specific data around how different elements of tasks– and not just like, ‘When was the task created, and when was it completed?’ Oftentimes, things are going back and forth between the client team and the centralized team. It’s being sent out for signatures, then it has to come back for processing. We now capture different points along the way to see where bottlenecks might be, and more specifics around the nature of the tasks so that the data is more worthwhile for us.

We’ve also been working on solutions, where people can provide feedback on how tasks are executed in a way that feels like it’s encouraged by all parties. You’re not tattling, for lack of a better word, when you’re using it, and it feels like it’s just part of the process. We actually launched something this week that gets to that.

Our centralized operations team is on pace to execute something like 32,000 tasks this year. While anecdotes are helpful, we need this data to help us uncover areas where more training is necessary or processes need to be improved, but that doesn’t mean that the communication is any less important as it was before. If anything, it’s the opposite. The communication between team members is absolutely essential for both collaboration and culture, but it’s just now more important than ever to supplement that with more data-informed reporting and insights.

[00:35:21] Matt Sonnen: Amanda, I know you’ve done a lot of work in your CRM to provide transparency across your team. Talk to us a little bit about that.

[00:35:28] Amanda Barrale: Yes, I’m going to echo what Eric said. Data is huge. We have spent so much time looking at what fields we could be tracking, and when we’re thinking about these items that were working on for advisers; not only where does it stand as far as who’s accountable for the current actionable item on this task, but we’ve also been looking at the load of work that is on each operations’ employee.

We had to set parameters for, ‘Okay, what can we handle, what can’t we handle?’ We had to build in a complexity scale for the type of tasks that we were doing. If we have a new client that’s being onboarded that has 72 accounts that needs to be transferred, that’s going to be quite different than an onboarding where, maybe, you’re only dealing with five accounts. We have to be able to not only put in a complexity scale, but also a timeline that’s associated with that, based off of how long we know it takes, based off of our previous experience, to get these tasks across the finish line.

Then, from that, we’ve built out daily reporting that shows us– We have one individual who, he’s quite excellent, and loves diving into this data. He was able to actually identify, ‘Okay, I know if I give each one of my on-boarders 12 onboardings on any one given day, that’s the sweet spot.’ If we go above that, then we’re going to start noticing mistakes.

Where do we need to scale back, or where do we need to add in additional resources to be able to help this team, and then what does that also mean if we’re thinking about M&A or onboarding a new team? We know we’re going to have a new influx of all of this new data and new information that’s coming into the firm. We need to really be able to measure who’s doing what on any given day, not because we’re trying to micromanage people, but because we’re trying to really help them be successful in their day.

Communication is so key as well. We have stand-ups that happen daily, or we have weekly team meetings, going a little bit more towards a project management background, but where we’re communicating; what’s working, what’s not working, and when people are raising their hands when they have a question or when they have a concern, because maybe something’s gone awry with the request that they’re working on.

We’ve tried to build in as many of those data points as possible, to create a dashboard view for operations that shows them what’s going on and where we might need efficiencies, but we also provide that to the advisor team as well so that way, they know, “Here’s what your piece of the picture looks like, and here’s why how that relates firm-wide.”

Just in that way, they know, ‘Oh? This other team is going through the same type of experience that we’re going on right now,’ whether it be from an operational perspective or an influx of clients that’s happening, just trying to really use data to help us in those manners.

[00:38:21] Matt Sonnen: One more topic I want to hit on. We’ve talked about it on past episodes, about our industry’s focus on a really well-defined career path for advisors. Amanda, talk to us about the work you’ve done in building out career paths for your operations folks.

[00:38:40] Amanda Barrale: Absolutely. When I first came over to our back-office, we didn’t have a project manager at the firm, so I got to jump into that role and figure out what that looked like. In doing that, it really became a passion of mine to be able to build out something that we could grow into.

As we started talking about business systems and then operations, traditionally, what we had saw, or what we would see, would be people that were from the back-office who eventually went over to advisor teams. You didn’t really see this huge hand-raise of people that were from the advisor teams who wanted to come from operations, because they didn’t really know what that looks like.

I think 10, 15 years ago, that was still being built a lot across the industry. Especially in the RIA space, it was, “Well, I don’t really just want to go work with one custodian,” or, ” I don’t really want to go work, and be in just compliance.” As we were thinking about career paths and how we needed to build out this structure– Our platform really started as a small group of four or five individuals, and now it’s over 45 individuals.

It was building in the roles, as we knew we needed scale, and then taking a look at what people were interested in and how all of these tasks organized well together. Then from there, building out a structure that showed employees, here’s how you’re going to grow in this role. Then as the firm grows, here’s how your department grows. Here’s how you’re participating in the vision of the firm. Here’s where we see you growing.

We have a lot of one-on-one meetings where we go through employee goals, what they want out of their career in the near term, and then long-term. Where do they see themselves growing? If we have an employee who two years down their path at Moneta, who is sitting on centralized operations and they say, “You know what? Really, based off of the work that I’ve been doing and the interactions that I’ve had with the compliance team, I really think there’s a role for me over here.”

We facilitate the move to that team because that’s important. We want to retain that talent. It’s so much more beneficial to have that individual as a part of your operations team, who has the background and knows what happens in other areas of the business. It just builds that great foundation for them, and then they can keep moving and growing in their career based off of whatever path they want to go.

It’s really been great to see how this has evolved over the course of the past few years and how there have been more and more individuals who are excited about the operation side and just to see what has been possible.

[00:41:17] Matt Sonnen: I really love it. Eric, how have you approached career paths at Wealthspire?

[00:41:22] Eric Sontag: A lot of similarities to what Amanda was saying. I felt myself nodding along and to our head of our advisory technology platform, Alia Wagenhoffer, she previously was an advisor at Wealthspire who realized her passion was actually in technology and process. We’ve had other members, we’ve had members join our investment team who had started in the advisor track.

It’s great to see that happening more frequently in the industry. I’ll admit that, if you’re a smaller firm, defining career paths for operational roles is inherently more challenging. If you have two people in operations, it is hard to create a well-defined and reliable track. I think this is an area where scale absolutely matters.

We have a 20-person client operations team and it’s regionally based across the Mid-Atlantic the Northeast, the Midwest and the West coast. Just from the sheer size of the team, there are natural progressions. If you like to manage, you could get involved in training. You could become a manager. For more junior members of the team, you could eventually work your way up to be a regional manager and so forth.

There’s a lot of projects and specializations within the team. Someone who’s a more senior operations staff member could take the lead on projects that impact the entire firm. There is one aspect related to career pathing that I feel very strongly about that can be put in place regardless of your firm’s size. That’s a consistent title structure.

I still see firms or too many firms where someone who’s in the back office just has the title of like operations. It’s like the name of the department they work in. We felt it was critical early on to have a system where everyone is sharing the same title hierarchy in terms of seniority. We’ve structured our titles to have two components: The first one is about seniority, for a lack of a better word. The other is more descriptive of what you do. For example, you could be a Vice President, Client Operations or Vice President, Advisor.

The Vice President reflects a similar seniority. You just work in different departments. Everyone at Wealthspire has that same set of titles, which there’s six in total. It accomplishes a few goals. One, it allows for HR policies on things like, paid time off. If those are driven by seniority or years at the firm, the structure helps with that. It highlights a progression of promotion for how your titles can change over time for every single role.

Finally, and most importantly, it’s inclusive. It puts everyone on the same playing field to avoid any belief that advisors are more important to the firm than operational staff, because at the end of the day, everyone must feel included and that they’re all on the same team in order for the firm to be successful.

[00:44:49] Matt Sonnen: I want to thank you both for being here today and sharing your experience with all of our listeners. This has been a really deep discussion into RIA operations at scale. Amanda and Eric, I can’t thank you enough. Thank you both for being here.

[00:45:03] Amanda Barrale: Thanks for having us. This is great.

[00:45:05] Eric Sontag: Thanks for having us. Its been great, Matt.

[00:45:08] Matt Sonnen: Thanks. That is a wrap on Episode 43. We will talk to everybody soon.