EP 1 – Transcript

Matt Sonnen: [00:00:25] Welcome back everyone to the COO Roundtable Powered by PFI advisors. My name is Matt Sonnen. I am the founder and CEO and we are an operations and technology consulting firm for the RIA industry. I recorded a brief intro podcast last month before the holidays. For those of you that missed it let me remind everyone that I am the former chief operating officer of Luminous Capital which was a multi-billion dollar RIA that sold the First Republic in 2012. And after that sale I joined Focused Financial Partners where I worked very closely with many of the COOs at the various Focus Firms across the country. In fact, Anna Garcia who is an analyst here at PFI she worked with me on our team that helped launch the COO summit which was an annual gathering of the operations and compliance professionals at all the focus firms. And one thing I noticed firsthand in my career as a COO and then one thing I’ve heard from almost every COO that I’ve talked to there’s a tendency for advisers and owners of RIAs to view the CEOs solely as an expense for the firm and the general feeling is “hey we’re the ones who are bringing in the revenue, you ops folks over there in the corner you’re costing us money.” So, this podcast is a passion project of mine. I truly believe that the primary unlock for both organic and inorganic growth for RIAs rests solely in the role of the Chief Operating Officer. I don’t know how RIA can experience significant growth if the rainmaker of the organization can’t get out of the office to meet with clients and prospects on a regular basis because he or she is stuck in the office dealing with H.R., technology, and compliance issues and by bringing in what Mark Tibergien has termed quote professional management. The advisors can focus on what they do best and because they’re focused on what they love, they’re going to attack their prospecting efforts with even more energy and focus. So, that’s the organic side and then on the inorganic side I believe that a potential buyer needs to advertise the infrastructure of the firm and convince the selling adviser that he or she can now grow much faster when they allay themselves of the day to day running of a business and they join the larger organization. Who better to make that sales pitch and educate a selling adviser of the capabilities of your firm more than a COO? With this podcast I hope to interview two or three COOs per episode in a roundtable fashion to discuss the strategies they incorporate to successfully tackle their day to day responsibilities and help their firms grow both organically and inorganically. And I have two such professionals with me today Jeff Fuhrman of Coastal Bridge Advisors formerly known as LLBH and one of the Focus firms that I worked with during my time there and Tony Craun of Sand Hill Global Advisors in Palo Alto. Both firms manage approximately two and a half billion give or take a bit and both firms can attribute much of their growth to these two men. So, Jeff and Tony welcome and thank you so much for being patient with me here on my first interview.

 

Tony Craun: [00:03:17] Thanks for having me Matt.

 

Jeff Fuhrman: [00:03:19] Thanks Matt.

 

Matt Sonnen: [00:03:19] Absolutely. Now I should note that as part of my passion project of trying to shed light on the role of the chief operating officer RIAs, PFI advisors put out a White Paper in late October of last year (and that white paper has the longest name in the history of white papers) it is titled “Exploring the Benefits of Professional Management for RIAs: A Deeper Look into Chief Operating Officers” and both Tony and Jeff were gracious enough with their time to be profiled in that paper. It’s available on our website PFI advisors.com. So, I’m totally cheating here with my first interview because I’ve already interviewed both of these men. And in fact, during those interviews I hung up the phone with one of them and I turned to Anna and Alex on my team and I said, “this is so much fun doing these interviews I wish I could do this for a living” and both of them immediately said “we should do a podcast.” So that was sort of the impetus for this for this podcas.t So let’s jump in, I’ll start with that with Jeff. Jeff can you just give us a bit of a background on coastal bridge advisors.

 

Jeff Fuhrman: [00:04:25] Sure, sure. But first again thank you Matt and thank you for your leadership on this on this issue. Coastal Bridge Advisors is an independent RIA founded 10 years ago as you mentioned with the help of Focus Financial in October 2008 during the heart, the height rather, of the Great Recession. A small group of people, I think was about eight of them, left Merrill Lynch with a roughly $400 million to set up this new business in our current home here in Westport, Connecticut. Today our AUM has grown roughly six fold. We’re now 23 people and we operate out of three offices Westport, Los Angeles, and most recently San Francisco. I’d say throughout our tenure our aim has always been to serve as the trusted advisor to our clients and to get there, we offer what we call our virtual family office. That’s a range of highly personalized wealth management, private banking, and family offices services and sophisticated advice for our clients. That’s who we are today but we’re never content to rest on our laurels and we’re just excited about the next 10 years as we are about the first 10.

 

Matt Sonnen: [00:05:48] Perfect. Yes, I do know you guys well and definitely one of the leading firms in the industry. Tony, why don’t you tell us a little bit about Sand Hill.

 

Tony Craun: [00:05:59] Sure. Again, thanks for having me Matt. I guess the Sand Hill is a registered investment adviser here in Palo Alto, the heart of Silicon Valley. We’ve actually been around since 1982 and I’m not a historian of our industry but I think that probably puts us close to the genesis of our industry in that respect and of course in 1982 Silicon Valley was more of an orchard than what it is today. But we’re proud to have been kind of a startup ourselves here in the middle of the heart of startup land. Our firm today is roughly a little over 2 billion in assets under management 24 employees in total and we really cater to the entrepreneur, the executive, the families of those entrepreneurs and executives here in Silicon Valley and throughout the tech and business community across the country. We ourselves are employee owned and that was a result of the firm buying itself back from Boston Private, our parent company, at the time in the 2008 downturn. So, we’ve had a 10 year legacy of our current management team together and growing this approximately four, fourfold three and a half four fold since our acquisition and are looking forward to continuing that growth curve here into the foreseeable future.

 

Matt Sonnen: [00:07:22] Perfect. So, I’ve talked to both of you about this privately and together the RIA industry itself is pretty niche within the wealth management space and then the COO role within the RIA industry is super niche. I found that when RIAs, as they’re growing, and they finally make that decision “Yeah I think today’s the day we probably need to bring in a COO” they’re hard pressed to find an experienced professional that “Oh great. We found the perfect candidate that was looking for a job. He’s been in the COO, he or she’s been the COO of a RIA, a multi-billion dollar RIA for six years and now they’re looking for a job and we can just hire them in.” That’s just never gonna happen. So typically RIAs are forced between two choices: either, and this is how I got the job originally as a COO, you promote someone from within. A junior person but the benefits there are they know the clients already, they know the employees really well, they’re familiar with the technology that the firm is using, but they don’t have any managerial experience they’ve never had people reporting to them. So that’s the big challenge for that junior person, Or, the flip side is I have somebody with great managerial experience but they’re coming from completely outside the industry. They know business strategy. They know H.R. policies, workflows, and processes but they don’t know wealth management. They’re completely lost by our lingo and the systems that we’re using in our industry. So, with Jeff and Tony we actually have an example of both scenarios. So, Jeff, and actually you were on a panel at the Market Counsel conference recently kind of talking about the quote outsider experience of coming into to the space. So why don’t you give us the back on sort of how you personally joined Coastal Bridge – in I think it was 2012.

 

[00:09:26] Sure. Sure. Yeah it was – it was 2013. Actually, this is my second go at Wall Street. At an earlier stage in my career, I was an investment banker and transitioned from that role offering advice to operators to becoming an operator myself. In my first foray and in the new capacity I served as a CFO and then later chief executive of a technology business. Subsequently, I became the president of a talent agency called IMG Artists, and in many ways, the curious thing, is that the talent agency business is similar to what we do in the financial advisory space. And in both, it’s about the delivery of white glove service to a discerning group of select clients. And so, when I left IMG, I had to convince the founders here at Coastal Bridge that not only did I offer all the necessary skills and attributes required to fulfill the role but like you just said, my lack of industry exposure would actually offer an advantage. My perspective was, I could come with sort of a blank sheet of paper and not necessarily come with legacy thinking or legacy relationships, but I’d offer a new view of the world. And to their great credit, the founders of our firm had a progressive view about what they said drafting the best players and I was fortunate to be considered and ultimately able to land the role.

 

Matt Sonnen: [00:11:03] I’m still PFI, is three years old now, and I’m still getting used to this consulting role. But one of the very common things consultants say is the worst thing you can hear is “Well this is the way we’ve always done it.” So, I can definitely see that why they were able to make that that pitch to them and why they found that interesting yes definitely.

 

Jeff Fuhrman: [00:11:28] Yeah. That’s just that’s the kind of mentality they had they had.

 

Matt Sonnen: [00:11:31] Yep. No, that’s perfect. So, Tony you had extensive experience in wealth management when you join Sand Hill, but you weren’t brought in exactly into that COO role. So why don’t you talk us through how you joined in and how you evolved into the role of the COO.

 

Tony Craun: [00:11:49] Sure, sure. And as we’ve joked before, no one grows up typically suggesting that they want to be a COO of an RIA as a life goal. So, you know, I wanted to write movie scripts or be the general manager of the Minnesota Vikings. So, my route to this position has not been one of a preordained destiny in elementary school. So, my route to the position really started with not knowing what I wanted to do in this industry. I come from a liberal arts background. I have a wide range of interests but I didn’t have a single passion or focus in terms of what I wanted to do. And so when I joined Sand Hill in 2005, I had about three years of industry experience and different roles in terms of managerial and operational and a little bit on the technical side and I said, “Hmm why don’t I try becoming a CFA and a portfolio manager.” I put that hat on for a little bit. I took it off. I was a client service associate, the manager client services. As it often happens in many of our firms, the younger you are the more likely it is you’re gonna get handed the technology of the firm. Whether you have an interest or ability or not, that typically defaults by age to a certain person and so ultimately what happened was in my exploring different opportunities and interests throughout the firm and thinking about my future. I gained what I would consider a pretty wide and generous liberal arts education in this industry. As time went on, I saw that there was an opportunity to take the parts of the business and kind of meld them together in a way that allowed the firm, in my opinion, to function a little bit better. And as I considered my role, it was more of the performance enhancing drug for all the other groups. And so over time I found that my wide interests were actually a benefit and not a hindrance to development and not being a singularly focused person was actually something that I could use to my career advantage but also to our firm’s growth.

 

Matt Sonnen: [00:13:59] So let me ask you as you were going through that a question came to mind. I think the RIA space in general, so a lot of it is, we’re leaving the corporate world. We’re leaving the Merrill Lynch’s the Morgan Stanley’s, and we’re starting our own entrepreneurial endeavor. And so there’s somewhat of a mindset of well we don’t want processes, and the man. That we don’t want the man telling us what to do on it on a day to day basis. And I think that’s one of the challenges for the COO, CCOs have this problem as well. But just how do you get buy in for the ideas of “you know, hey we’re making this a business. We’re going to run this as a business.” Now obviously some of that is going to be process driven. Do you think Tony, as you’re walking through that, do you think having that background helped you communicate to the employees and you were able to sort of appeal to them on their same level? “Hey, I’ve been in your shoes etc.” Do you think it helped you with your communications with the employees that were now reporting to you once you moved into that role?

 

Tony Craun: [00:15:06] Yeah, I think, you know one of the things we think about as we talk about the role the COO and the traits of the COO, I think that empathy for colleagues is one of the traits. I think a willingness to, I don’t want to use the word sacrifice, but sometimes you need to blend into the background – the show is not about you. It’s about other performers in the in the band you’re playing with. And so I think when you work in these different capacities, you start to gain an empathy for the frustrations that come from process. And I think one of the misconceptions, a lot of folks have in the operational world, is that those and say sales, portfolio management, compliance – I think the misconception we have is that they don’t want to do a good job. They just want to do it their way. And I find that in our organization especially, there’s wonderful talent, really great people, and what they’re looking for is someone to remove obstacles with process and not add to them. And so I think that with that empathy and that understanding you can look at it and say process, procedure, structure is the way to give you freedom. Because ultimately what people have left wirehouses for and what great job satisfaction comes from, in my estimation, is a higher degree of input and autonomy. And if you can create process and procedure that allows for additional freedom so that chaos doesn’t reign. I think that’s the reward. And if you can articulate that this process will give you more freedom, ultimately, by organizing and structuring things around you. That’s to sell and a sympathetic ear and empathy for the position that they’re in – will help the COO make that make that sale.

 

Matt Sonnen: [00:16:57] And I think that’s all exactly right. Jeff what kind of communication strategies – do you know how do you get buy in for the things you’re bringing to the table?

 

Jeff Fuhrman: [00:17:08] I mean I think Tony nailed it. I think the empathy and removing obstacles as he spoke of are right on point. In our case it is just that and adding that we need to remove those obstacles in order for the business to flourish and if the business is flourishing it means our employees are growing and developing professionally, economically, personally – what have you. And so that’s the kind of discussion as we as we build a stronger firm. It will be good for our people.

 

Matt Sonnen: [00:17:47] Perfect. I think that’s right Jeff. I started the podcast talking about the COO position being a unlock for growth. And I really do believe that by freeing up the advisors to do what they do best it allows for the firms to grow much faster. At the same time though to be fair, if your firm isn’t growing, you’re probably not bringing in a COO. Both of you are on rocket ships. We talked about the growth that your firms have gone through in the lifespan of the firm. But let’s talk specifically about how fast the firms have grown since you’ve joined and what challenges that has brought up for both of you when things are moving so fast. You’re adding so many more account numbers to your reporting system, you’re adding just so many more clients that need to be serviced, et cetera. So, Jeff I’ll go to you first. Can you just talk a little bit about, I think from the White Paper interview we did, I think Coastal Bridge, you mentioned they were $400 million when they launched. I think there were about $900 million when you joined and now you’re over $2 billion. So, can you just talk a little bit about the growth the firm has undergone since you’ve joined and how you’ve sort of navigated that.

 

Jeff Fuhrman: [00:18:59] Yeah, that’s right. We were about $900 million when I joined and today we’re probably two and a half to three times that amount. At that time, I think I was the 13th member of the team and today we’re 23 and we were one office then and three offices now. But I think it’s actually more than just the numbers. We’ve grown in other ways as well. We’re much stronger. Our technology is better. Our organization is communicating and operating more efficiently, and I’d say the level of sophistication and creativity we’re offering our clients has taken a big step forward.

 

Tony Craun: [00:19:39] And I would agree with Jeff. If I could just jump in there. Because I think that a lot of times the growth we talk about is in AUM and accounts. But what Jeff said really nails I think what we’re all facing which is the complexity of it. And so, in that respect, and I’m sure Jeff is seeing this as well, which is clients don’t get less demanding of services over time and the competition doesn’t offer less over time it becomes “hey I’d like this. I’d like that.” And the strength of our firms, in my opinion, the independent RIA is the customization, the personalization, and the high touch – Jeff referred to the white glove treatment earlier. And so I think that those types of businesses that we are in, the ones that are high touch, customized, personal. Scaling those, adding more clients, adding more services – I think that is really the challenge that we all wrestle with. And so sometimes it’s not so much how much your assets or your client grows but the offering mix that changes, the demand and sophistication that they’re asking for. And it forces you from a technology, a people perspective, a risk management standpoint, and quite frankly just a business choice in terms of the bottom line. And so I think that’s in our experience the challenge of the growth is that the complexity and sophistication on an individual client basis has to be scaled. And I think that is the challenge and the growth.

 

Matt Sonnen: [00:21:11] I think that’s exactly right. In our in our white paper, we pinpointed three high level roles that that the CEO takes – responsibilities that they have. One is just the day to day administration of the firm and that sort of leads into the culture of the organization. Two is really what most people think when they hear COO – they just think, well you just manage the technology, so it’s managing the technology the workflows, the processes, of the organization. And then three, is there’s a there’s a big H.R. component to it. Most of the time, the COO is doing the interviewing, the hiring, doing the staff reviews, on whether it’s an annual basis or semiannual basis whatever it may be. Most of the staff is reporting to the COO and both of you have very strong H.R. focuses at your firms. So, Tony can you walk us through your hiring campaign that you’ve did you’ve done and the work you’ve done Sand Hill to attract to make your workplace attractive for new talent.

 

[00:22:12] Sure. Sure. Yeah. So, I think one of the one of the epiphanies, if you can call it, that I had some years ago, when I was competing against Merrill Lynch’s, the Morgan Stanley’s for talent you know. My office sits a couple of blocks from Stanford University. Obviously, the war for talent in Silicon Valley between us and technology is there. And I kept saying to myself why would a young person, why would a mid-career professional want to join an organization, that I think is phenomenal and wonderful to be a part of both for personal and career development. But I’m not Google and I’m not Amazon and I can see both of their offices from my office – as I looked down the street here. And the thing that I come back to that the independent RIA has as a talent advantage, especially for younger people, is that we offer opportunity. And I’ve never met a CEO of a wealth management firm that said “You know we figured it all out. It’s rinse and repeat for us. There’s nothing more to do.” Usually a CEO carries a list of 17 or 18 things in their pocket that they hope that they can pull off this year. But they know behind that that’s making them better. And then there’s another 17 things after that. And so, we as independent RIAs, offer wonderful career opportunities for young people especially because it’s a chance to try something, to take on something. There’s things that are laying around untouched. You want to try that. Go for it no one else has time for it. And so my sales pitch, if you call it that, to folks working at wirehouses. I was going to lose on compensation to be frank. Silicon Valley and Sand Hill Road is it’s quite a behemoth in terms of compensation for people in this industry. But I had opportunity and I had career growth and I started by bringing people who saw a career path here and opportunities to touch things that were untouched and went from there. And they brought in similar minded people. And it’s probably my most proud accomplishment today is that people that I brought in on the client service side are now in the chief compliance role, their senior portfolio managers, their wealth managers, and they saw the opportunity and the small RIA and ran with it. And I think that was from the H.R. breakthrough. I had I was competing on the opportunity I can offer and not the brand name.

 

Matt Sonnen: [00:24:44] You and I met many, many years ago at a Fidelity conference and I thought I had this – I was so unique as a COO of an RIA and I saw your next door to Stanford. We were right next door to UCLA, and we would put up job postings and one if we were lucky, would apply. One kid would apply, and we didn’t understand because we think within the RIA space right – I said it earlier it’s very niche – but within the RIA space we manage a couple billion dollars. What’s wrong with these kids? And it dawned on me. Yeah most of these kids can’t spell RIA. They don’t have a clue that this side of the world even exists. But also, what’s very different. When I when I got into the industry in 1997. Finance, Wall Street, all of that was much more exciting for a 22 year old. We definitely do have that problem I think right now. Is kids coming out of college right, now aren’t thinking of just wealth management period. But then they don’t even know that the RIA space exists. And so I used to do. I got to the point where walking into the career center at UCLA was like Norm walking into Cheers. They were like “Matt’s here!” Because I would do anything I possibly could to just to have the Luminous Capital logo behind me for an hour. So, I was teaching resume classes. Anytime they had a panel of let’s teach – you know juniors and seniors – what finance is and so there would be a forensic accountant with the FBI on a panel and then I would be representing wealth management. But anything I could do just to get the Luminous name in front of people. And so it did work. When we started posting jobs we would we went from 1, we’d get 25, 30, 40 applicants because they at least knew who we were. I thought I’d unlock this this great thing and then you and I met and you told me what you were doing and I said, “oh I’m an amateur.” But it is a challenge to bring in new talent and I think you’ve done a great job.

 

Anthony Craun: [00:26:41] Well I think one of the things too that we as an industry and you think about the COO role can do is tell people that not all positions in our industry are sales. I think that one of the big detriments, in terms of people wanting to join our industry, is they their image of who they are going to need to be is a broker who can sell and they said I can’t sell or I don’t want to sell. And they first misunderstand what sales are actually which is relationship building, not a flake pitch. But then they say you know I don’t know about financial planning. I don’t know that I can work in technology in this way. And so I think someone like Jeff’s background is encouraging because it shows you that you don’t have to be an industry person to be a major contributor or a force in your firm. And I think that seeing that folks from outside our industry can come in. Be it from tact from entertainment – that show that this is not just a place for, you know people, off the assembly line of the sales machine at Merrill Lynch. And that’s an area I hope we as an industry can keep telling people that there’s opportunity here for people with lots of different backgrounds, thoughts, and experiences.

 

Matt Sonnen: [00:27:50] Shameless plug – Alex Webb on our team just recently wrote an article on our blog about. Because he’d he just started this June. He graduated from Miami of Ohio and he just wrote an article about the RIA space is a great place for millennials, we just aren’t doing a great job of expressing it. So that’s our shameless plug for the for the podcast. So, Jeff you’ve got a – I’ve never heard of this before. You’ve got a very interesting strategy around job descriptions and roles within the organization. Walk us through that.

 

Jeff Fuhrman: [00:28:27] Sure. Sure. So, one of the things we think about as we continue to build out our organization to meet the increasingly complex needs of clients as, Tony alluded to earlier. It’s how everyone’s position fits in the greater scheme and job descriptions tend to seem like a trivial matter. But I believe there that crafting and maintaining a well-defined job description is of fundamental importance. When you consider that in many organizations, you know, a new employee comes in and they’ll get a job description, maybe. And often that job description looks more like a recruiting document. It says things about, you know, the education requirements and certifications and technical skills required and then it will have a brief job description. And then oftentimes that person’s job morphs over time. And the job description that they signed up for originally bears no resemblance to that. And frankly, in my view that’s not fair to either the employee nor their manager – to have a clear and agreed upon expectation of the role. It creates confusion, inefficiencies, and frustration. So, what we’ve done is spend a significant amount of time drafting highly detailed descriptions of every single role in the organization. Laying out functional responsibilities and expectations. And to make sure that they’re fresh, if you will. The employee and their manager review them every 90 days to ensure consistency and in that agreement between those two people – beyond performance management. This this helps us with training and development, career pathing and even resource allocation. So, it’s a key element of our human resources strategy.

 

Matt Sonnen: [00:30:30] I think it’s fantastic. Like I said, I hadn’t heard of heard of it executed exactly the way you guys are doing it. I think it’s fantastic. One other thing, I want to switch gears a little bit. You can’t really have a discussion about the industry right now without talking about consolidation and M&A. It’s such a big piece of what’s going on in the industry right now. So, Jeff what is your view, it’s a two part question. What’s your high level view of the M&A opportunity in the RIA space? And then more specific, where do you see your role within your organization playing to better make Coastal Bridge successful in the M&A game.

 

Jeff Fuhrman: [00:31:21] We’ll take the latter one first. It is as you mentioned, with your opening remarks, about advertising the infrastructure. I mean I think it’s about – a build it and they will come type strategy. My role, or at least the way I see my role, is to build a suite of services to support our advisors build, sustain, and grow their business. And the concept there is true for existing advisors but also for those will bring on. So, we think we’ve built an attractive engine and we continually need to evolve. But that engine offers tremendous value to those currently inside and could potentially to prospective outsiders. So are our M&A strategy as a firm is really built around that. I mean we’ve got to keep our house in order and as long as our house is in order so too, we’ll find opportunities for those to come in.

 

Matt Sonnen: [00:32:25] Perfect. And Tony you and I have talked in detail about your kind of high level thoughts of consolidation in this space. Why don’t you share those with everybody?

 

Anthony Craun: [00:32:37] Sure. Well I think the conversation you and I had is that it’s going to happen. That you look at the economics of individual business. You look at the competitive nature of the space and it’s just a matter of time before we start to see a pickup in that and that perhaps a maybe a benign market or a bear market might scare some folks or give some folks the impetus to move. But I think just in general and again I look get a Focus Financial and how they’ve done a really great job of growing through all the acquisitions and doing all the different ways of growth inorganically. But in general, I think there is a misperception of what this should look like. What I would call a revolution. A lot of stuff that crosses my desk is more like sixty five year old advisor doesn’t want to do it anymore – buy us out. And a lot of the acquisitions are being presented more as hospice and organ harvesting. As opposed to the joining up of two healthy bodies together. Right. So, I think first and foremost, I think that our industry needs to look at not waiting until the terminal end of a firm before selling because in my opinion strip mining a firm for cash flows at the end of an adviser’s life cycle is not the ideal thing to do. It’s human capital business. I can’t imagine that taking the human capital out of a business is the ideal way to go. So that’s one thing I’d hope the conversation gravitates more towards one of mid stride firms joining together and I want to use that word joining. Teaming up, because I think the nomenclature around – acquired, take out, threw in the towel, or gave up. I think those phrases make founders, who have a lot of pride in what they built a lot of ego in what they’ve done, kind of repel themselves away from this because it’s like well I’d sell out or they took me over. And I think if we could look at firms more like how the tech community works around me. A lot of times companies are started with the intention of being a part of something bigger. You create a niche, you create a specialty, you develop some kind of technology. That would look really good as a complementary piece to a bigger firm. So, I think of our firm we have a specialty in divorce. We’ve done that now for almost 30 years and it’s become kind of our hallmark in terms of a niche. And there’s all kinds of these niches and pockets throughout our industry that look good strapped to a bigger firm like a Sand Hill in this process. So, I think just in general people will have to realize that fees only go in one direction over time. You need scale. And complexity and offering is going to grow. I think back to a few years ago in the robo craze everyone’s like do you want a human or do you want a robot. And the answer everyone said was I want both and I want it cheaper. And then Vanguard starts hiring CFPs to go with their offering. So, I think people are going to come to this realization that they’re better together than apart. I hope they come to it at a mid-stream standpoint not in the terminal, hospice phase of their firm’s history. And I think firms like ours look at it and say we don’t want to be a conquering hero that takes you out. We want to bring you into the fold together to build something greater with our specialty your niche and our combined scale of economics.

 

Matt Sonnen: [00:36:24] I’ve talked to quite a few people and I think there’s been a couple of articles written about it as well. The term tuck-in should be removed from everybody’s lexicon. It doesn’t go well in your dating phase. Calling someone a tuck-in does not make them feel warm and fuzzy to join your organization, so I think everything you’re saying is right. And you win the prize. The quote of this podcast is definitely a hospice and organ harvest. That’s it’s very true. So, one of the other goals of this podcast is not only promoting the role of the COO and shining a light on the importance of the COO role but specifically for those COOs that are listening. One of the challenges of the role is just juggling so much. A lot of times you’re handling, again, the technology of the firm but you’re handling the what the lobby is going to look like. I mean literally watering the plants many for falls on the COOs whoever is in charge of infrastructure that covers everything. So, one of the challenges is how do you, as a COO, handle so much responsibility in any one day. So, I’ll go to Jeff first. When you’re laying your head down on your pillow at the end of a specific day how do you define success. What had to have happened that day, that you say yes, this was a good day.

 

Jeff Fuhrman: [00:37:55] Well I think about, when you talk about laying your head down to sleep it reminds me of the line about “I sleep like a baby. I go to sleep. I wake up crying and then I go back to sleep again and do the same thing a few times every night.” And when you think about organ harvesting and hospices perhaps that’s true here too. You know no two days are alike. But what excites me, I guess, is when I know our business is growing. That tends to mean our team is working at optimal levels and our processes and technology and ecosystem is delivering as expected and our clients are being delivered the service they deserve. Ultimately, you know you don’t measure your business on a day to day basis especially in this role. It’s hard because every day is indeed so, so different.

 

Matt Sonnen: [00:38:54] Yeah, yeah. So, Tony what are your bedtime rituals.

 

Anthony Craun: [00:38:59] Yeah. Well besides praying long and hard about myself and what I’ve done for the day. I think it’s twofold. I think that as a COO I think about risk and growth and how they fit together, right. So, I think with the uptake in cyber incidences, with the uptick in money movement fraud, with all the ways that firms have become more exposed and vulnerable to risk in the last few years I think that’s part of it that I do my part today to help mitigate the risk at the firm. So that’s one half of that. But then on the other half I’m thinking about the growth. Did I do things today that will allow the firm to grow? That will allow individuals in our firm to grow? And balancing those two can sometimes be a challenge as you both know because growth sometimes entails risk. You know I think about technology initiatives going to the cloud, going mobile, trying to take on more client data, protect it. And so for me that’s the conversation I have in my head. Did I do everything to protect the firm today and promote its growth at the same time both at the firm and the individual level. But that said, I view my role as being a performance enhancing drug for everyone in the organization. And if someone is not growing that I have to take some responsibility for that as well.

 

Jeff Fuhrman: [00:40:24] Fantastic. I cannot thank you both enough. Number one for being patient with me this was my first podcasts interview so thank you both. I think we’ve raised some amazing topics here and strategies things you guys are doing to help your firms continue to grow. So, I just I really want to thank both of you for your time today.

 

Jeff Fuhrman: [00:40:44] Thank you Matt.

 

Anthony Craun: [00:40:46] Yeah. Thanks. I really appreciate it.

 

Matt Sonnen: [00:40:48] Absolutely. So, podcast listeners, I think we’ve spelled out with this what the strategy is going forward. We want to continue to talk about these types of topics and others that the COO role can do to help their firms continue to grow and at a macro level continue for the RIA space to grow from a collection of practices to businesses. I think there’s going to be, as the space continues to evolve, I think that is going to become more and more of a theme that we’re all dealing with – more assets, more clients, consolidation. So, we’re very excited to continue this this journey. Our next interview is also coming from people that were profiled in our COO White Paper. I’m going to be speaking with Mike Lee of LourdMurray and Gary Bonner of Avalon Advisors. We’re really excited about that and we’ve got we’ve got others in the pipe as well that I will not reveal. So, thank you all for listening. And we will talk to you soon. Thanks.