As 2020 draws to a close, we pause to reflect on the past year here at PFI Advisors. With a global pandemic that forced companies to quickly adopt new processes and rethink the methods by which they deliver service to clients, we continued to focus on being a source of best practices and thought leadership for the RIA industry. Early in the year, we interviewed the four largest performance reporting providers for our white paper “The Importance of Reporting Technology For RIAs.” We had the incredible opportunity to write two guests posts for Kitces.com, focusing on “Pivoting to a ‘Work From Home’ Model” and a recap of our joint white paper with Stacey McKinnon, Chief Operating Officer of Morton Capital, titled “Adapting Advisory Teams To A Hybrid Office/Home Workplace: Leadership, Culture, and Infrastructure For the New RIA Workplace.”
Our podcast, The COO Roundtable, continued to grow as we welcomed various operations professionals discussing the strategies they incorporate to successfully tackle their day-to-day responsibilities and further spur growth within their organizations. We even took our podcast to the big (virtual) stage and recorded Ep. 22 live as part of Bob Veres’ Insider’s Forum. Matt also became a mentor for BNY Mellon|Pershing’s Next Leadership Forum. And, as part of the next step in our company’s journey, we hired Louisville, Kentucky-based Landon Brantley as a consultant.
Additionally, Layla Paige’s Second Annual Nature Walk for TrinityKids Care was once again hosted by actor, comedian, and musician Jack Black. Hundreds took to the streets in their own neighborhoods across multiple cities and states to show support for this amazing organization. Even with a virtual event as opposed to in-person, we were able to raise over $90,000 for this organization that means so much to our family.
Throughout 2020, we published 50 blog posts detailing best practices for RIAs.
2020 brought about a renewed focus on operational efficiencies and bottom-line profitability for RIAs, which in turn saw our services in high demand. We are currently working with more COO Resource clients than ever before and given the mind-boggling number of M&A transactions completed this year, our M&A Support Services continue to be our most in-demand service offering. We continue to help wirehouse and IBD advisors attain financial independence as they look to establish their own RIAs. Throughout the year, we worked with RIAs that collectively manage $101 billion of client assets. We are prepared to enter 2021 with even more dedication to our mission:
To further evolve the RIA industry from a collection of practices to businesses, and to be a continued voice in validating the industry as a legitimate landing spot for billion-dollar teams and their clients.
We are committed to maintaining our thought leadership in 2021, with our goal of educating readers and provoking operational thinking for growth-minded RIAs. We hope you enjoy the following articles which proved to be our most popular of the year, and we wish you and your families a happy, healthy, and safe new year!
In our mind, Mark Tibergien is the godfather of the concept of professional management within the RIA space. When he was a guest on our COO Roundtable podcast in late 2019, we asked him, “What advice do you have for COOs who look to combat the notion that only revenue-generating roles within the firm are valuable?” He provided six concrete metrics that can be used to measure not only the firm’s success but showcase the value of the COO to the organization: Pricing, Client Mix, Service Mix, Productivity, Cost Control, and Growth. It is no coincidence that the COO impacts all six of these core business elements! (Nor is it a coincidence that an article with Mark Tibergien’s name associated with it received the most views of any article we wrote in 2020!)
By early May, we sensed that people were getting tired of the doom and gloom articles being written about the pandemic’s impact on Wall Street, Main Street, and everything in between. We thought we’d provide a bit of levity by pondering the question, “How would David Lee Roth handle this?” This article, written for WealthManagement.com, was one of our best received of the year. Using some of “Diamond Dave’s” famous quotes, including, “The hood ornament on your car is for telling you where you’re going. The rear-view mirror is for showing you how good you look while you’re getting there,” we hoped to not only make people laugh, but keep a positive attitude as we all managed the “new normal” that was unexpectedly thrust upon us.
To the surprise of many, the pandemic and ensuing distractions did not slow the pace of M&A activity across the RIA industry this year. Throughout the summer months, however, we spoke with several frustrated firms that missed out on an acquisition/merger, all citing the same deal-breaking hiccup: investment philosophy. As we stated in the article, “The tension between a buyer’s need for aggressive growth immediately following the deal’s close and the seller’s desire to ‘take my foot off the gas pedal and really focus on the parts of the business I truly love (investments)’ is very real, and exists in almost every M&A transaction. We feel it is critical that buyer and seller resolve this tension very early in the negotiation process.” The fact that this article, written for our monthly contribution to WealthManagment.com, earned so many views showed us this is more common than we even realized.
When working with wirehouse or IBD advisors who are looking to establish their own RIA, the most common question we receive is, “How much time should I give myself between now and my launch date?” In this article, we detailed the most time-consuming tasks needed to complete before popping the champagne and announcing your new business. While four months is the minimum lead time advisors should give themselves, “we don’t believe advisors should give themselves much more than six months, simply because as they further explore the benefits of independence, it will get that much more difficult to continue working in their current captive environment.”
When he isn’t helping our clients run their businesses more efficiently, Jay Veale is pursuing his Master’s in Business Analytics. That’s why he was the perfect person to write this massively popular article, which states, “Reports are only useful if the underlying data has been scrubbed and confirmed as accurate, and true data analysts are trained to inspect, clean, and verify datasets before they apply any statistical analysis to them.” Understanding how valuable clean data can be, Jay concluded his article by stating, “The fact of the matter is not that RIAs can’t afford to hire a data analyst, it’s that they can’t afford not to.”
We were excited to see this article receive so many views because it is an incredibly important point that we discuss regularly on our COO Roundtable podcast. Time and time again, we are contacted by RIA owners who ask if we know of any “tech folks” that could act as their COO. And time and time again, we advise these owners that without someone developing the people and the organization’s culture, the firm has no chance of gaining adoption of the various technology tools. This article contains some of the many fantastic quotes recorded by our podcast guests on this very topic. Michelle Thetford, COO at Hightower Advisors, summed it up nicely by saying, “This business, at its heart, is all about people.”