With another batch of podcasts on the books and two years of consistent, monthly episodes, we’d like to once again thank everyone who has listened, subscribed, and given feedback on The COO Roundtable.  We’ve enjoyed having these discussions and hearing your responses to them.  Our interviews to date have included thirty-nine operations professionals at thirty-four multi-billion dollar RIAs across the country accounting for over $169 billion in client assets under management.  Over the past five episodes we’ve featured a few different perspectives on the role of the COO from leaders of RIAs of all sizes.  With so many unique topics discussed in the past few episodes, we felt it was the perfect time to recap the top five lessons we’ve learned from our most recent guests.  You can also check out the top lessons from previous episodes here.  Read on for our highlights from episodes twenty-one through twenty-five!

EP 21 featuring Douglas Johnson & Christopher KellerThe Value of Professional Management When Creating Successful RIAs

In Episode 21, Doug and Chris discuss the many ways a COO provides value to any RIA firm. When speaking specifically about the challenges they have faced moving away from legacy thinking and driving their RIAs into a successful future, Chris said, “Without question I think it’s human nature to rely on what’s worked for us previously, in our personal lives or our professional lives.  As a company, we had some awesome success when taking the best of the predecessor firm and implementing it here at this firm, but a lot has changed in 10 plus years. We’ve evolved where it was important to do so and we’ve been willing to work to make sure that we stay aligned with the trends in the industry.  In 2019, we added an affiliation model called Edwards Wealth Management, it’s an enterprise RIA.  We’re offering the core services that we’ve built out in our 10 plus years to independent business owners and advisory business owners who want to focus as much of their time on their clients, and as little of their time as possible on operating a back or middle office.  I can assure you, this is not at all what our original model looked like, but it’s where we see the puck going in our industry.  We are a firm believer that how you treat people is really important and our values run deep and they guide us and that has not changed and that will not change.”  In Doug’s case, he joined Parcion Private Wealth shortly after they launched and he shared his experience by stating “When I landed here in early May, one of the things that I’m working feverishly on is to break down that mentality of ‘It’s all about the lead advisors’.  What we want to do is elevate the other advisors in the room so that they can go out and harvest new clients if you will, by themselves, without relying on our founder.  Getting away from terms like ‘book of business’ and ‘my clients’, and those sorts of things have been really challenging, but it is refreshing to see we’re starting to make that move.  There’s a lot of stuff around that that I’m working on, benefits, plans, readjusting those realigning things into what’s happening in the real world, outside of the big wirehouse type thing, and so there’s a lot of those challenges that I’m working through at the moment.”

EP 22 featuring Karen Denise & Kaylyn MeliaHow Operations Professionals Help Firms Grow in a Profitable and Scalable Fashion

We recorded Ep 22 live from the 2020 Bob Veres’ Insider’s Forum Conference.  Our two guests Karen and Kaylyn joined us to discuss how they both balance the friction between top-line revenue and bottom-line profitability.  Karen stated “Oftentimes advisors will be presented with a client that maybe is a smaller client than the size that we would go for.  And oftentimes, there’s really good reasons for that.  But when that becomes frequent from someone on the service side, and the operation side, oftentimes, the smaller clients require just as much, or more work sometimes behind the scenes, and then court clients that provide us a little bit more value.  To solve this, we have a dedicated small account advisor.  Having an advisor that’s focused solely on those small relationships is usually something really attractive.  It helps us to be a little bit more scalable in that we have specific investment models that we may use with less turnover.  If you’ve got clients of a smaller size sometimes investing them as frequently as we have for larger accounts, actually, is pretty detrimental to the client.  Having them work with specific things that are tailored toward a smaller account balance is really helpful We’ve had a lot of success with that and it’s something that we’re actually looking to see if we can have additional resources or if we can use some technology to be able to explore some self-service options there.”  Kaylyn added “I feel it’s something so many firms struggle with and it’s even more challenging for family office because of the breadth of what we do.  We can get into a rabbit hole really quickly with the different things that our clients ask of us.  Sometimes it’s easier for us to tell clients that part of what we don’t do because we do a lot and typically I find that it’s better received when you’re just clear about the things that you don’t support.  We’ve learned sometimes the hard way that for many of these clients, sometimes we have to work for them for a couple of months before we can really determine the appropriate cost of the service is but we tell them that up front.  We try and do as much investigation and data gathering as possible before we even engage them because we want to have as much information as we can so we know what type of work we’re going to have to do.”

EP 23 featuring Aiki Altmets & Lynne BornCOOs Need Both an “Entrepreneurial Spirit and Commitment”

For this episode, Lynne and Aiki spoke about the challenges they face and opportunities in their roles in the professional management field.  When it comes to empowering entrepreneurs in her firm, Lynne shared her thoughts “You have to have a very, very clear strategic plan.  You’ve got to pay attention.  I think that plan has to roll down to various teams, bringing those goals to life.  I think every individual’s person’s goals needs to roll back up to the overarching goal of the company as well.  There’s, this, I like to think of it, like three-dimensional chess out of Star Trek, where all the pieces have to come together in this interesting, synergistic way.  You have to have business generators.  You can’t just have the originators of the firm be the only people bringing in clients, and so what do you need to do for that?  You need to help your advisors learn the skills that are necessary.  You need to deconstruct it because a lot of folks make it bigger than it is, they make it more terrifying than it is.  That’s something you can help your 20, 30-year-old advisors do because they should be networking.  Their college roommates are going to become controllers and then CFOs.  Their networking exists even at that level of 20, 30-year-olds.  Then I think back to the entrepreneurial heart, the senior advisors, they have to have the courage to say, “I’m going to commit to trying to bring in a certain number of net new assets.”  That takes some courage to do, back to being an entrepreneur, but when you make the commitment, then it’s something you are striving for.”  Aiki shared her own experience in terms of entrepreneurial spirit by sharing the factors that led her towards the independent RIA space, “The biggest thing I think was control.  We wanted full and complete control over our firm and what we offer to our clients and how we go about doing that, as well as what we’re able to offer to our team.  If you work in this space, that if you break away from a captive audience and you go somewhere else, they’re big checks to be had and we did evaluate all the opportunities that were out there, going independent versus going into the captive audience, and we just realized that what is going to be in the best interest of our clients and the best interests of our firm is just going to be– There’s no better place for it than being in the independent space.”

EP 24 featuring Paul Hildebrandt & Paul Lythberg: The Nuances of Running a Large Organization

Ep 24 found us interviewing two prominent guests from Segall Bryant & Hamill.  Phil and Paul discuss how their CEO and COO roles work together to ensure “the trains are running on time.”  Phil stated, “When we were growing the firm, we were using an outsourced partner.  We used some fraction of their internal people who are extremely talented, but we had a third of their attention.  As we got bigger, it was just pretty clear that – I think this is what a lot of RIAs don’t quite grasp, if you want to grow beyond a small firm, you really have to make the investment in the infrastructure and the professional management aspect of it.  The infrastructure that it takes, as you scale up, it becomes more and more complex.  Even Paul was talking about the day-to-day challenges.  Every day is different.  You have to have people who are flexible, talented, confident, all those things to be able to deal with the challenges that you get faced because the firms that ultimately succeed are the ones that are the best at processing those challenges and ultimately making good decisions based on the challenges that come out of it.”  And Paul added “I would say trust.  Phil trusts me to make the right calls.  He’s been known to say that a third of the time, he’ll agree with me, a third of the time that he’ll be neutral, and a third of the time he’ll disagree with me.  I hope he doesn’t disagree with me that much.  It’s me trying to figure out where his needs are and where his head’s going.  Again, if there’s things I think that are high-risk or pose high risk for the firm, I’ll be certainly to reach out to Phil or Ralph to get their input before I would move forward with anything.”

EP 25 featuring Erica Farber & Lisa CookCOOs: Drivers of Culture

In Ep 25 Lisa and Erica discussed all of the ways their roles have them interacting with all facets of their RIAs.  When Matt asked them how an RIA should rate their COO, Lisa had this to say “The COO plays a different part in almost every RIA.  We all probably do something a little bit different.  We could be the au pair, we could be the right hand, we could be the coach for the young CEO type thing.  It was funny, I had just had a conversation the other day with our CEO and he said, ‘You’re the only role that doesn’t touch the client at all.’  I’m alleviating a lot of that — the day-to-day stuff, the obstacle removers, problem-solvers that employee HR items working on the culture, attracting new employees, alleviating headaches for the CEO.  And Erica added this wonderful answer, “My role is intended to increase profitability.  Now granted not in the same manner as selling or garnering clients per se but the more efficient I can make our various business lines and operations, the more money we can all make.  That’s a really great incentive across the board.  How do you achieve that?  It’s taken me some time to recognize that you’ve got to be able to provide some factual analytics and data to be used to evaluate your progress.  That is probably one of the largest reasons we have invested so much in our new CRM.  It is not just to have a place, a hub for all client information, but it’s also built to give us really key metrics in terms of efficiency, profitability, how are our new account paperwork times comparing to a month ago, a quarter ago, two years ago.  Having that data at your fingertips is really the only way that you can start to design what it is you think you should be held accountable for.”  

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