2020 was a year like no other.  As we move into 2021, I wanted to look back at some of the articles we wrote and the lessons we learned as we navigated the crazy roller coaster of a ride this past year.  Drawing from our recent end-of-year article for WealthManagement.com, “the craziness of this year proved to everyone, including ourselves, how resilient our businesses truly are.” 

Death of Kobe Bryant

The year started off with a punch to the gut on January 26th when Kobe Bryant’s helicopter went down in early morning fog, taking the lives of 8 other people, including his 13-year-old daughter, Gigi.  We happened to be at Legoland that day when my phone started buzzing abnormally for a Sunday morning.  I remember turning to my wife, Reese, and saying, “We are only 26 days into the new year, and we just had what will be the worst story of the entire year” – boy was I wrong on that prediction!

As I wrote in this February 25th article, Gratitude and the Mamba Mentality, “Everyone assumed that Kobe would find a way to will himself and that helicopter out of harm’s way, just like he had done with all other challenges he faced throughout his playing career and beyond.  It just didn’t seem possible… people like Kobe can’t die on someone else’s terms – it has to be on their terms.”  When a seemingly indestructible, larger-than-life personality dies, it wakes us up to our own immortality and the unfairness of life.  Our time is limited on this planet, and every day brings with it unexpected news.  I wrote in late February that this tragedy “allowed me to stop and take stock of the things in my life and the relationships I’ve been blessed to have.  And I’m happy to realize that I have a lot to be grateful for.” This was a much-needed perspective to tackle the rest of the year!

COVID-19’s Early Shock to Our Businesses

March brought stay-at-home orders across the country, forcing RIAs to close offices and COOs and other operations professionals were tasked with launching or improving an array of technology infrastructure.  From virtual desktops to video conferencing, these operations teams shifted the entire business remotely in an astonishingly short amount of time.  On March 22nd, PFI Advisors was honored to write our first guest post for Kitces.com titled, Pivoting Quickly to a “Work From Home” Model: What Advisory Firms Need to Know.  In the midst of all this uncertainty for our own businesses, mid-March saw the Dow suffer the three largest single-day point drops in history over the span of one week – clients needed their advisors more than ever, and yet everyone was working remotely, many for the first time.  The balance between work and home became increasingly difficult to manage as parents were forced to juggle homeschooling and simultaneously working a full-time job.  Because of the increased demands, many worked, and still are working, more hours than ever before.

In this article for Wealthmanagement.com, I decided to check in with some of the COOs in my network to see How Top RIA COOs Are Responding to COVID-19.  While some firms were clearly caught flat-footed as the pandemic struck, as an industry overall, RIAs proved their agility and were able to use the crisis to prove their true worth to clients in times of distress.  Heather Fortner of SignatureFD was able to communicate the value COOs bring to their firms  as she described herself as a “utility player” during this unprecedented time: “I’ve had the privilege to clear my calendar and prioritize my day so I can float from team to team and fill in wherever I’m needed most, from one day to the next.  I don’t think anyone but the COO has the visibility across the firm to play ‘Safety’ – we have a unique ability to go wherever we are needed most!”  (In what cannot be a coincidence, Heather was promoted to CEO of her $4 billion RIA in October of this year…)

Using Crisis to Improve Your RIA’s Health

In late April we published Silver Linings: Using Crisis to Improve Your RIA’s Health.  In this article, we noted “revenues are estimated to be down 10-15% for the year, putting pressure on profit margins and causing some RIA owners to fret about the viability of their businesses and what cuts they’ll need to endure in the coming months.”  (April saw many RIAs apply for Payroll Protection Program (PPP) loans, which became a whole other story that I will not get into here…)  We stated in the article, “For now, advisors are focusing on exactly what they should be doing – guiding their clients through this turmoil and keeping them calm and focused on their long-term financial goals.  When the time is right, however, we’ll forward this article to our clients so they can begin the work of focusing on the bottom line [profitability of their businesses].”

We quoted Philip Palaveev of the Ensemble Practice, “Those firms with less than 25% profit margins have less room to wiggle without going to compensation reduction and layoffs.”  And we noted Brandon Kawal of Advisor Growth Strategies’ quote, “I imagine a lot of owners are sort of stuck in the here and now [tending to clients].  As we go through the coming weeks, it’s going to be time to take a step back and really take a look at the business holistically.”  Our article walked advisors through a profitability analysis (mostly focused on expenses, as RIAs weren’t sure of their revenue numbers during this period), a client segmentation analysis, and we also advised firms to reevaluate what services they could outsource vs. in-source.   We concluded the article with a quote from management guru and former CEO of Intel, Andy Grove, “Bad companies are destroyed by crisis.  Good companies survive them.  Great companies are improved by them.”

How to Survive Working from Home

While the last article was about improving the financial standing of your company in the midst of a global crisis, one week later we published an article poking fun at ourselves with an attempt to let everyone know that their mental struggles were not unique to just them, and we were all doing the best we could.  In Working with Your Spouse May be Tricky, Except in a Global Pandemic, Reese and I detailed the very fluid daily routine we had created as we attempted to keep our six year old educated, our business afloat, and our sanity (somewhat) in check.  Ironically, reading this article today, which was meant to detail the “craziness” of our lives at the time, I’m thinking to myself, “Boy, we had it under control better then than we have it today!” – it just goes to show that life is a journey!

The Long-Lasting Impact COVID-19 Will Have on Our Businesses

In June, I was honored to work with Stacey McKinnon of Morton Capital to co-author a white paper titled The New RIA Workplace in which we detailed ways the global pandemic will shape the nature of the RIA business forever.  The paper examined the pros and cons of working from home vs. working in an office environment and described what the office of the future may look like.  Stacey and I attempted to frame the “new normal” in a holistic fashion by focusing on the historical pillars of RIAs success: Leadership, Culture, and Infrastructure. 

Many industry pundits at the time were declaring remote work and video meetings the “death to genuine human connection,” but our paper pointed out that “instead of relying on desk photos of family members and pets, [internal] video calls [led to deeper connection with co-workers by] allowing children, spouses, cats, and dogs to meet coworkers and say ‘hello.’”  In terms of client communication, we pointed out that “polished presentations have given way to genuine human interaction, creating an even stronger bond between advisor and client.”  Despite the many benefits of remote work, Michael Kossman of Aspiriant cautioned advisors reading our white paper to “accept that some functions in your organization, and some people, will do better in an office-based environment and that others will thrive working remotely.”  Therefore, we concluded that The New RIA Workplace would be some hybrid of remote workers and in-office personnel, all rowing in the same direction to best serve clients.

Stacey and I were blessed to write another guest post at Kitces.com on September 22nd, Adapting Advisory Teams to a Hybrid Office/Home Workplace: Leadership, Culture, and Infrastructure for the New RIA Workplace, detailing the findings of our paper and digging deeper (in true Kitces fashion!) into some of these concepts.

Breaking Away During a Pandemic

In addition to working with Stacey McKinnon, June also provided me the opportunity to join Pablo Bizjack of BNY Mellon Pershing and Brian Hamburger of MarketCounsel for an enlightening webcast titled “Breaking Through – Navigating the Path to Independence,” hosted by BNY Mellon Pershing.  In my recap article of the webcast, Is It Easier or Harder to Go Independent During a Pandemic?, I detailed the four broad categories of tasks needed to establish an RIA: Business Infrastructure, RIA Infrastructure, Client Transition, and Billing Set Up.  During the webcast I mentioned that coordinating these activities could in fact be made easier for advisors who were working from home, but Brian Hamburger raised a great point: While an advisor could be conducting these planning activities throughout the day while working from home, that doesn’t necessarily mean they should.  “Working from home or not,” Brian cautioned, “while the advisor is still employed, they have a duty to their current employer to be conducting business on behalf of that employer, and in the employer’s best interest.”

For the remainder of the webcast, Brian, Pablo, and I detailed what advisors could and couldn’t do while still employed by their current employer, and what tasks would be best outsourced to a project manager who is not employed at the advisor’s current firm.  We then discussed, now that clients have grown accustomed to advisors working from home, if expensive office space was still needed in a post-pandemic world (some form of office space is still a good idea, we advised).  We concluded our discussion on a positive note, and that is the fact that the pandemic has further proven that RIAs can offer the same level of service, the same institutional-caliber investment solutions, and in many ways RIAs can provide these services in more nimble and tech-forward ways than the large wirehouses.  Coming out of this pandemic, we anticipate more and more advisors will be exploring the independent channel, confident that it can service their clients’ complicated needs.

Eddie Van Halen Passes Away After Long Battle with Cancer

On a personal note, October was a rather tough month for me.  If someone had asked me at 15 years old to describe the worst month in the history of the world, I would not have hesitated to describe the month as containing a Dodgers World Series championship, and the death of Eddie Van Halen.  In a nod to the utter bizarreness of 2020, both events occurred in the span of 3 weeks, and I merely responded to the double-whammy of horrific news, “Yep, that about sums up the year!”

My tribute article to Eddie Van Halen on the day of his passing was simply titled Heartbroken.  In the article, I detailed how my obsession with the man and his music dated back to 1983 when I was introduced to him via MTV.  Two months since his passing on October 6th, our son Luke continues to catch me daily watching video clips of Eddie’s guitar wizardry on YouTube and he has to warn me, “No more than one hour [of watching], Dad.  It just makes you too sad!”   I wrapped up my tribute article by saying, “Most will only remember him for his hair, his smirk, and his bright yellow jacket he wore in the ‘Jump’ video; but for me, Eddie Van Halen was a musical genius that provided inspiration and joy to my life for nearly 40 years.  I used his music to celebrate the good times and turned to his music to get me through the bad times.  What an incredible gift he gave the world.”  Rest in Peace, Eddie.

2020 has tested each and every one of us – on both personal and professional levels – like we never could have imagined.  And yet, we are all still standing.  We survived, and many thrived amidst the chaos.  We’ve advised many of our clients throughout the year to keep perspective and appreciate the fact that the wealth management business can be conducted remotely and the market turbulence allowed advisors to shine in their clients’ time of need.  Operationally, many RIAs have taken the year as an opportunity to better position themselves to service clients in more streamlined and profitable ways.  While the turn of the calendar doesn’t necessarily put this pandemic behind us, we’ve learned valuable lessons that will allow us to move forward more prepared for the next challenge.


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