Episode 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.
[00:00:24] Matt Sonnen: Welcome, everyone to Episode 39. We have two extremely experienced guests with us today running two of our industry’s most interesting firms. I think this is going to be a really fascinating discussion. Rob Ziliak joins us from Buckingham Wealth Partners. I’ve known Rob for eight or nine years now, dating back to his time as CEO at Hufford Advisors, which was a firm that I was introduced to when I worked at Focused Financial.
Hufford then sold to Buckingham and Rob joined the leadership team at Buckingham. I’ll let him walk everyone through the various roles that he’s had, but Rob was named the Chief Operating Officer in January of this year. Congrats on that, Rob, and welcome to the COO Roundtable.
[00:01:07] Rob Ziliak: Thanks so much, Matt. Appreciate you having me.
[00:01:12] Matt Sonnen: Great. Then joining Rob is Ryan Armock, the Head of Operations at Thrivent Advisor Network. Before joining Thrivent in May of last year, Ryan was the Chief Operating Officer at Private Client Services. As you will see during this conversation, he has extensive knowledge of operations, processes, and technology. Ryan, welcome to the podcast.
[00:01:36] Ryan Armock: Great to be here, Matt. Always a pleasure to listen to the dulcet tones of Rob as well.
[00:01:45] Matt Sonnen: Perfect. Well, I’m going to go with you first, Ryan, why don’t you tell us a little bit about Thrivent Advisor Network?
[00:01:51] Ryan Armock: It’s an interesting story. Thrivent Advisor Network, or TAN, as we affectionately call it, is a very young organization in the RIA space. It was really founded in 2019, and it was the outcropping of Thrivent Financial, its branching out into the independent RIA space. Thrivent being 100 plus-year-old fortune 500 fraternal organization, this was a new venture for them. Getting out into the RIA space and the independent world, this was the first branch of that. It’s unique in that it’s not publicly traded, nor is it owned by private equity. It’s a fraternal organization.
Ultimately, it has an obligation to its membership, and ultimately, the firm was started by a group of career advisors within Thrivent itself, that then wanted to go independent, and move into the independent space to expand their offering to get beyond the bounds of a career agent, become true business owners. As such, we had about 25 different advisor groups move over to help form Thrivent Advisor Network in 2019. Since then, we’ve added some other firms, external firms, and that brings us to where we’re at today with about 6.5 billion in assets under management, about 450 employees, and about 300 IARs.
Really the unique thing about Thrivent Advisor Network, I think, is this relationship with Thrivent and having that at its core. It’s really independent advisors seeking greater fulfillment, really thriving with purpose of being one of the core aspects of what Thrivent is all about and certainly what TAN is all about. It looks at money, not from the perspective of it being something we all aspire to but really looking at money as a tool to help clients make the most [of what] they’ve been given. Really the heart of it all is generosity and the heart of Thrivent and is generosity and TAN is the independent arm of Thrivent in the RIA world that really brings that to market.
[00:04:07] Matt Sonnen: Great. Rob, I’m guessing most of our listeners know the Buckingham name, but give us an overview of the firm.
[00:04:15] Rob Ziliak: Happy to do that, Matt. Buckingham was founded in 1994 by four CPAs, who were regularly asked by their tax clients to perform a broader array of services starting with financial planning, and investment management. After enough years of being asked and seeing their clients treated poorly, or at least not as well as they wanted to see the clients be treated by non-fiduciaries, those four CPAs established Buckingham as a fee-only RIA. It then also created what, at that time, we would have referred to as more of a classic TAMP that was known as BAM Advisor Services.
From 1994 to the present, we’ll fast forward and say that Buckingham Wealth Partners, as you introduced earlier, Matt, is the sum total of the RIA Buckingham Strategic Wealth, and Buckingham Strategic Partners, which is, we think more than a TAMP because it’s really a full suite of back-office solutions plus practice management, portfolio management, and more. It’s about $65 billion of collective assets under management, 25 billion for the RIA, and about 40 billion through Buckingham strategic partners.
As of today, our employee account is rated at about 540. Obviously, a lot has changed since 1994. We do remain fee-only fiduciaries, and we’ve continued to broaden our set of internal solutions beyond just wealth management, and now includes tax prep and filing services, it includes specialized services for niches like dentists. We have services for business owners, and more. Quite a diverse firm.
[00:06:18] Matt Sonnen: I mentioned Rob, I mentioned that I knew you when you were at Hufford first, but I didn’t realize at the time you had been at Schwab for 16 years prior to that. Walk us through your background.
[00:06:31] Rob Ziliak: Yes, sure, Matt. I think one thing, it’s a sign that you and I are aging, just in case either of us were in denial. This last decade or so is done really quickly. Yes, the 16 years at Schwab was nearly 17. Like most, I actually entered the profession before Schwab as someone who wanted to provide financial advice directly to clients, and I did it the old-fashioned way by soliciting securities and insurance. After doing that, for a year or so I recognized the pitfalls of being a 20-some odd-year-old commissioned-based broker and found a better model in Schwab.
For nearly 17 years, I was really blessed to have a variety of client-facing and management/leadership roles at the firm. I did everything from lead teams and perform things like trade dispute resolution within the Schwab Call Center. I worked as a retail broker out in the physical branches. I was also a branch manager for a long time. I worked within the Schwab private client RIA, which is the RIA within the broker-dealer, an interesting model in its own right. I also then led– I had a managing director role within our Client Service arm, and at one point, responsible for about 200 employees there.
Shortly though, Matt, before you and I met in the range of 2009 to 2012, I earned the CFP designation and a Master of Science in Personal Financial Planning. I really think that those contributed largely to my ability to move to Hufford a decade ago, and achieve the role that I have today in the RIA space, thanks to that additional knowledge and credibility. When I joined Hufford, it was as a wealth advisor and COO, as you mentioned.
I joined the founder of the firm as a minority partner, largely to help him find a succession plan.
That could have been anything from me being his succession plan. It could have involved us starting to acquire firms, thanks to the help from Focus, or join a larger RIA. In late 2014, we did sell to Buckingham. In the last eight years, I’ll just fast forward through the Buckingham experience pretty quickly, I did advise clients for a short while. Most of it, though, has been in leadership roles of advisory teams within the RIA. Then also an organization-wide role as Chief Experience Officer, leading the strategic design of what we call our design-build-protect client experience.
Today now, as the Chief Operating Officer, I really consider myself the leader of the client experience as a whole. It’s my job to ensure that all facets of the client experience are executed and implemented.
[00:09:42] Matt Sonnen: First, you called me old, and now after you go through your background, I just feel very lazy [laughing]. That’s an incredible story. Wow. Ryan, I know you have an amazing background as well. I mentioned Private Client Services, but you’ve had some really long tenures with a few different firms as well. Walk us through your career progression.
[00:10:05] Ryan Armock: Yes, indeed. Similar to Rob, I thought Rob was telling my story actually when he first started because I started in this business as an advisor, just like Rob did, and had a very short stint in it. That was only after I spent a few years in radio after college. How radio translates to financial services, I’m still not sure to this day, but I found myself as an advisor with AXA back in 2000. It was a pretty short stint with those folks. One thing I knew is, ultimately, I didn’t have a passion for being an advisor, but I did love the business.
At that point in time, I thought to myself, “What’s a better role for me, somebody that’s analytical and can think through problems and problem-solve?” Luckily enough, I had known and worked with somebody back when I was in radio that actually did a talk show on our station. She was a registered rep, and an IR with SII Investments, and in Appleton, Wisconsin, and lo and behold, they had an opening. I started on the trading desk with those folks. Ironically enough, or not, ironically enough, actually, sadly enough, I started there the week before September 11. It was a very tumultuous start to my operations career.
When I started with SII, back in 2001. It did nothing but get better from there. I spent close to 17 years with SII investments, Investment Centers of America, as well as the other BDIAs that were part of Jackson’s owned broker-dealer and investment advisory network. In those 17 years, held a variety of roles, everything from the trading desk, to fixed income specialists, to products, to you name it, I did it. Ultimately, when I came into the operation space, I was vice president of products and services at the firm when we got the news back in 2018 that Jackson was selling the entire network off to LPL.
I was one of the lucky few that got to wind down operations, as the clients and our advisors transitioned off the platform. Never something easy to watch, an organization you’ve dedicated a very large part of your career to vanish in a very short timeframe. I really was fortunate enough to become affiliated with Private Client Services then. They are an independent BDIA focusing on a hybrid space. I know a lot of folks in the RIA space that do broker-dealer business are very familiar with them. I was brought on through a relationship with one of our advisors that decided they were going to start their own RIA, and it started a conversation with Private Client Services.
In that conversation with their CEO, they’d mentioned ”Hey, we need some operations folks. We’re growing quickly and we need somebody to run our operations and some support staff and everything else.” Lo and behold, that opportunity presented itself for me and 16 other folks that were with SII investments at the time, part of the wind down. We got to transition essentially the last day of employment there. We moved over to Private Client Services the next day and began work there. We spent a lot of time really rebuilding their investment advisory platform for tuck-ins and for advisors there as well as working on the BD side of operations as well.
As CEO, their COO over there, I served with all those folks for about three years, created a service center up in Appleton Wisconsin, and then certainly worked with a staff that were located both in Wisconsin as well as down in Louisville, Kentucky. My first foray into true remote working with folks that report to you that don’t necessarily office with you. Little did I know that that would prepare me for what would happen in a few short years as we got into the pandemic.
Ultimately last year, I received a call from a former colleague that I worked with years ago, and he told me that Thrivent had started an independent RIA channel and they were looking for someone to come in and head of operations on their side. I’ve always admired Thrivent as an organization, very active in a lot of communities, but certainly ours where they have a very big operation center. It was never a good fit for me just because it was a career agency, I was an insurance agent. I’m on the independent side, so I didn’t have a true passion for that side of the business.
Certainly, an independent RIA channel was something that appealed to me, and to get in with a company like Thrivent was, was a significant opportunity, and I jumped at the chance. Since May of last year, I’ve been with Thrivent and have loved every second of it, working with our advisors, with their clients, and with the staff in the TAN home office. It’s been a great ride so far. We have so many great things ahead of us in what we’re doing as an organization.
[00:15:30] Matt Sonnen: Wow, you both have amazing backgrounds. I’m going to start throwing questions at you now and get your take on a lot of things that are going on in the RIA space. First of all, as everyone knows, one of the primary principles of this podcast is to talk about the need for professional management. We’ve talked about it a lot, financial advisors, they tend to launch their own firm, and then from that day forward, they tend to struggle with that back and forth of, “I’m I a financial advisor first or am I the owner of a financial advisory business first and an advisor second?”
Most, in my experience, most want to remain financial advisors first. Then that’s where they’ll look to hire a COO or a head of operations so that they can stay focused on what they do best and on what they’re most passionate about. You both have been in this industry for so long, as you just walked through. I’d love to get your take on this. Ryan, I’ll go to you first. Why do you think financial advisors struggle with this, “Am I an owner, or am I still an advisor?”
[00:16:35] Ryan Armock: Well, I think you hit the nail on the head, Matt. Successful advisors got to the point where they could launch their own RIA firm by being just that, great advisors. Their focus does need to shift when they become a business owner as well. Recognizing that need to have someone with the expertise and passion, that same expertise and passion for other aspects of the business like technology or operations, compliance, HR, that fun stuff, that’s a key time really when you come to that realization, it’s a key time in growing their business.
I think about a Cerulli report that came out, I don’t know, a couple of years ago, and it listed, really the top challenges for RIA growth, and all of the things that aren’t really being an advisor, those were the top things on the list. Time to run the business, technology management, the operational aspects, the compliance requirements, those are the things that the advisor doesn’t want or like to deal with it. Those are the things that people like you and Rob and I, that’s what we have a passion for in this business. Having those experts as your partners keeps them in the activities that they really got into the business for.
One thing I’ll say is that most, certainly not all, but most of the really successful businesses that I’ve worked with over the years, they have two things in common. First, they have great a great advisor or great advisors, and then the second is the support staff. They’ve recognized that, “Look, I want to be a great advisor. I have to have that support staff in place to be able to do the things that aren’t being an advisor.” Hiring the people that you can trust to hand those things off to, and to handle them professionally and effectively, is really key to their growth and key to making them successful.
Combine that with a partnership like Buckingham or Thrivent Advisor Network, then those advisors can be business owners without the stress and the burdens that come with it. It really is a key recognition point in advisors’ careers where they can go, “Look, this is how I can maintain the passion for what I love to do about my business, but still also ultimately own that business.”
[00:19:03] Matt Sonnen: Rob, what do you think of this internal struggle that RIA owners often go through?
[00:19:10] Rob Ziliak: Ryan gave an excellent answer. If the goal of this podcast was to have some adversarial comments, I’d check out at this point. He gave a great answer so far. Maybe the little bit more that I could add to it is that because financial advisors were trained to be advisors, they became somewhat accidental business owners. During my time at Hufford, as you referenced Matt, our niche was advising members of the dental community. We had clients in all 50 states. Whether they were general practitioners or specialists, in almost all cases, they owned their business.
They went to dental school to take care of the patient who was sitting in the chair, they didn’t get trained on how to hire people, how to buy really expensive technology, whether or not to lease or buy buildings or anything else that it takes to actually manage the business itself. The parallel is quite striking in the RIA space because, even though there’s not necessarily an RIA school of where the advisors go to learn, the concept very much applies. Thanks to their success of taking care of clients who are sitting across the table from them, many of them found themselves having to make this whole set of business decisions.
And by time they choose to join with a Thrivent, or a Buckingham, or any other firm that’s been helpful in succession planning throughout our profession, some are more ready than others to delegate those business owner decisions. Even though many of the business owners accidentally came into being the manager, they do get used to making all the decisions. Oftentimes, it’s an ego or a willingness decision to recognize all of the decisions can’t be their own anymore, and instead, there’s a broader organization that has to be taken into consideration.
[00:21:37] Matt Sonnen: Hello, podcast listeners, we have never interrupted a conversation before like I am right now. Rob mentioned our industry lacks an RIA school, and frankly, that sets us up perfectly to discuss our online educational platform, the COO Society. I hope you’ll indulge me for just a second as I discuss the RIA school that we’ve created. The COO society is an online training ground that teaches RIA owners and operators how to run their businesses more effectively. For a monthly subscription fee, members gain access to three core learning paths: Technology, Human Resources, and Business Administration.
The Technology learning path covers the RIA tech stack, and details how to best leverage these back-office tools. In our experience, most RIAs are only using 20% to 30% of what they’re paying for, so we dive deep into how to use all of the bells and whistles embedded in these technologies to their fullest extent. We also interview each of the major vendors to get guidance directly from them.
The Human Resources learning path hits directly to what Rob mentioned in his answer to this question, how to attract, hire, and manage your people, and how to create career paths that provide personal growth opportunities for your employees.
In the Business Administration learning path, we tackle topics like, what key performance indicators you should track to gauge the health of your firm, how to perform a client segmentation exercise at your firm to better home-in on your ideal client, as well as compliance, project management, and how to be a successful RIA buyer. In addition to the course content, the COO Society includes an online discussion forum where members can pose questions, not only to PFI advisors but to each other as well. The RIA operations community is more than willing to share best practices.
We’re excited to help facilitate that collaboration and provide members an opportunity to learn how other RIAs are tackling the same challenges they’re facing. We are extremely proud of what we’re building and invite you to learn more at pfiadvisors.com. On the website header, select COO Society, and you’ll be taken to a page where you can watch a few introductory videos to get a sense of what the platform provides. In the episode notes, we’ll also link to a PowerPoint presentation covering the key components of the COO society. Thanks for listening. Now, let’s get back to the conversation with Rob and Ryan.
[00:24:05] Matt Sonnen: Well, speaking of business ownership, COVID has forced all of us to rethink how we’re running our businesses and how we’re serving our clients. Rob, I’m going to go to you first on this one, what are you doing differently today than you were doing in 2019 or early 2020, before COVID hit?
[00:24:27] Rob Ziliak: The best way I could start answering that, Matt, is my wife asked me just last weekend if I find myself having any conversations or reading anything not related to COVID, and my answer was, “Not really.” I suddenly feel like it became the replacement for the CFP materials 10 or 12 years ago. What do we do differently? Gosh, it’s almost easier to answer what do we do the same pre-pandemic. A few things I would say really jump out, or are worth sharing is, as most, we had to learn how to become much more technologically effective and efficient.
What we’ve done really well, and we actually have client net promoter scores two years in a row in which to substantiate this answer rather than it being anecdotal, is our advisors have had to become much more interactive with clients. With doing video meetings now and learning how to do screen sharing with financial planning software or updates over the portfolio, or simply looking eye to eye through a camera, our advisors can no longer sit there and do all the talking in a meeting. It’s naturally helped it become a much more interactive relationship.
From a consumer standpoint, I think that’s a huge win, especially when we recognize that real financial leadership is much about life planning as it is financial planning. The technological flexibility we have today is really a great outcome despite the challenges the pandemic hit us with. The other major thing I’ll focus on is we have been in a work-from-home environment now for almost two full years. Any advisor meetings that are in-office or in-person at all have been purely voluntary, and any of our non-advisory staff going into the office has been voluntary as well. Up until now, we’ve required them to be fully vaccinated.
Therefore, we’ve had most of our folks, whether vaccinated or not, working from home. We are going through a considerable shift and instituting a flexible and a sometimes hybrid work model effective the beginning of April. That will get us back into a new normal where our folks will split their time between working from home and in the office. It won’t always be 50-50 on the time split, and it certainly will vary across roles, like from advisor to say somebody in operations, or what have you. That’s another major thing. The pandemic itself prompted us to transform how and where we work.
[00:27:50] Matt Sonnen: You raise a good point that I’ve talked to a few people about. When this all started, the big fear was, “I’m going to lose all that intimacy with my client. Not meeting face to face, it’s going to feel distant. They’re not going to feel as connected to our firm.” Because we can meet more often, and it’s just so easy to say, “Hey, hop in a Zoom, and we can see face to face,” and because everyone was at home, people, dogs and cats, and children are in the background in a weird way that I didn’t see coming.
In a weird way, it’s made the connection with clients even stronger because of the technology, like you mentioned. I think it was a really good point you brought up there. Ryan, let’s go to you, what changes did you make in response to the pandemic that you think you’re going to keep going with long-term?
[00:28:45] Ryan Armock: Much like Rob, I think that we experienced many of those types of changes as a result. When COVID first started, I was with my previous firm, and we were fortunate enough at that time to just pick up and leave and go remote. We made that transition really easy. Now, that was the easy part, grabbing your laptop and moving everything to your home and working out of your home. The hard part was trying to figure out, ‘How do all these meetings work? How does Zoom work? How can we make the most of the technology that we have?’ To Rob’s point, it did force us to think about that.
Many of our advisors, most of our advisors were taking client meetings via Zoom or Microsoft Teams or the soup du jour when it comes to video conferencing. A few were still holding some in-person meetings, certainly for those clients that really wanted it, but the majority of it was all remote. What it’s done is just changed the way that we communicate with our advisors, and our advisors with their clients. Like Rob said, it’s a new normal in terms of how we’re interacting with them. My team itself is geographically diverse and they can work remote, and probably will work remote or in a hybrid type of environment from now on.
Zoom and Teams of WebEx, they’re all part of in our lives permanently and how we’ll interact with each other as team members, and certainly with our advisors, and their clients. It’s funny, the one thing that I don’t use nearly as much as I did pre-pandemic is the phone. I find myself on Zoom or a WebEx or Microsoft Teams meeting way more frequently than picking up the phone and calling somebody. The other thing it did, and Rob pointed to it, is it accelerated our thinking about technology, about it not just being a tool for planning, or for managing assets, but how to use it as an interactive experience that it allows advisors to share with their clients in person and remotely.
I like what Rob said about, it’s not just the advisor sitting in a meeting, talking the whole time now. There’s a lot more interactive experience with a client. Through that technology, advisors can really be ever-present with their clients without having to actually be with them. Ultimately, it’s a relationship business and they’re using that technology today to even deepen that relationship greater than it potentially was before.
[00:31:35] Matt Sonnen: As we all know that the craziness of the past two years has given everyone an opportunity to reexamine their lives, inside and outside of work, and really think about what they’re passionate about. Not only are we running our businesses differently, but we’re really just running our entire lives differently today. That’s made a lot of people rethink that work-life balance. This self-examination has led to what the press has titled, “The Great Resignation” which has been a perfect storm for the RIA industry, because we’ve all experienced record growth in the past two years.
Every RIA is looking to hire additional talent right now, to support all of this growth we’ve just had, but at the same time, employees are questioning where they want to work in the country, how they want to work, and who they want to work for. It’s a tricky proposition for everybody. Rob, I’ll go to you first, how is Buckingham handling this current war for talent?
[00:32:38] Rob Ziliak: Yes, Matt, we’ve certainly observed and felt the struggles in the war for talent. I would say, while oftentimes phrases like war for talent are embellished a bit, this one may not be. I will say we feel ecstatic that in 2020, we were able to keep up a 95% retention rate of our associates and a 90% retention rate in 2021. We are ecstatic, that we didn’t see a bunch of people hitting the exits. That said, we also allowed our folks to work from home. If they didn’t want to go into the office, they didn’t have to.
Part of the unknown dynamic as we look forward is, as we shift into a hybrid model of where folks will be splitting their time together, might there be some that eagerly look away or at other models that could be virtual-only? The answer is maybe yes and maybe no. We just believe that our particular culture of collaboration and deep relationships will be stronger if our folks spend at least some of their time together in person. That said, as we think about the acquisition part of talent, that’s where the struggle has really been so far. We have an internal recruiter, we have an internal human resources team. At times, we have more than one person focused on recruiting.
The simple reality is, we’re having a hard time filling the roles that we have posted anywhere near as quickly as what we used to. And we also have to invest much more in those roles than what we used to. Frankly, what we’ve found is the best way to acquire talent, or I should say maybe the most natural way where it doesn’t feel so much like a war is via acquisition because if we’re able to find a like-minded owner or owners of an RIA that would like to join Buckingham, we have the capability of capturing the great talent that they’ve built around them.
That’s a real key towards I think our future success of acquiring great talent.
[00:35:13] Matt Sonnen: Ryan, how is Thrivent attracting potential employees right now?
[00:35:18] Ryan Armock: I think that’s one of the benefits of COVID. If there are any, that would be one of them, it’s the transition to remote environment, and ultimately, what it’s done for us is open up the pool of candidates, of qualified candidates. Traditionally, we’d hire somebody to be in the office and you would hire at times locally, or they’d have to move. Now we can recruit good people wherever they may live. It gives us the ability to go after really the best and the brightest, no matter what spot they are in the country.
Beyond that, being part of the larger organization really gives us the ability to be competitive with compensation with benefits, and quite honestly, some of the best that I’ve seen in the industry, and that is certainly very important when we’re looking across a very broad spectrum of candidates trying to find a great fit. Another unique piece about our organization is our focus is on generosity, not only does our organization support it, but they encourage it. That really is something that resonates with candidates to understand that that’s the type of organization we are.
That coupled along with that flexibility of the remote work environment has allowed us to search for and hire some of the best in the business. I’ve been in small or mid-sized towns and cities almost my entire career, so commuting has never been a big issue for me. When you can get back 15, 20, 30 minutes by working from home and not commuting, that’s a pretty big benefit. If you’re in a larger city, where you may have an hour or an hour and a half commute, that’s a huge time saving, that’s a huge amount of time that you’re giving back to that particular individual.
I think, even in a hybrid space, where we may have individuals that do come in back into the office, just having those two or three days a week where they’ll have the ability to work from home and save the commute time, save the time that it takes obviously to go ahead and get ready, get in the car, get off to the office, it is really one of the best benefits you can offer. Because ultimately, time is the one thing you can’t make more of. If that remote environment offers that to the folks that we’re talking to, to help recruit, that’s a really big benefit.
I love Rob’s response about recruiting via acquisition. I think that that is an area that certainly we’re looking to take advantage of at TAN, and making sure that we can have that steady pipeline of candidates that come in as part of acquisitions. I think that you look at the business and the advisors, that’s one thing. The other key element of that is the current talent there within that organization that you’re acquiring. We at TAN are certainly looking forward to that as is one of the many benefits on the M&A side.
[00:38:35] Matt Sonnen: You both mentioned M&A in the context of acquiring employees, but I’d love to hear from both of you about how your role as COO and as head of operations, how do you impact your firm’s ability to attract advisors to your firms? Both of you are so active in this M&A arena. Ryan, I’ll go to you first on this one.
[00:38:59] Ryan Armock: Well, I would say certainly, having the technology, the platform, the processes, and the people in place, those are key factors. If you don’t have those operational aspects in place, if you don’t have that competitive toolset, you’re dead in the water from the start. It also comes down to I think your operations philosophy. If you build things strictly to be operations friendly, making life easier for myself and the operations folks, you may ignore the advisor and client experience. That balancing act between the two can be tricky, especially when you want to scale.
Having an advisor/client-centric experience that is operationally efficient and is a constantly evolving process. I think that’s the big key there. There’s no ‘set it and forget it’ when it comes to what we’re doing from an operational perspective every day. Listening to your current advisors and their clients, and translating that into what we do operationally, I think is the first step. Then, being able to articulate that and demonstrate that to a prospective advisor, to something that we’re looking to acquire, that’s where you go beyond just tech demos and process discussions with them.
Knowing that their clients will be well served is at the heart of their decision process from an operation standpoint. Then the real proof of that really comes when you do acquire an advisor or an advisor joins because you can make it all sound really good, but the experience, is it the best that it can be? Transitioning over, transitioning that advisor and those clients over is never easy, but making it as smooth as possible, and then delivering on what you’ve articulated can make or break your future acquisitions.
If the move was a bad move, the experience, wasn’t good, didn’t feel right, then they get here and it doesn’t feel good from an operational experience, doing business with us, that makes that story really hard to tell to others. It’s a small business and a bad experience can travel fast and far. It is really worth paying attention to creating raving fans because that can give you an edge on the next M&A conversation that you have.
[00:41:30] Matt Sonnen: We’ve written many articles with the varying versions of this headline, but success in the M&A arena is way more than just getting financing from a bank. I love everything you said that a bad transition is the worst type of advertising and a smooth transition is obviously the best type of advertising. I couldn’t agree with you more on all of that. Rob, what is your specific role in Buckingham’s M&A’s success?
[00:42:02] Rob Ziliak: Excellent answer by Ryan. I’ll start mine by saying I think of my role a bit as a doctor’s – it starts with a do-no-harm. Because I work with such talented folks like Adam Birenbaum and Justin Ferri, they do such an excellent job, setting the stage with prospective transaction opportunities. I just try to step in and not screw it up quite frankly. Specifically, what I try to do is actually similar to what an advisor does with a prospect, and that is engage with them in a thorough dialogue and share with them, of course, at some point about what we do, how we do it, the processes, the technology, what have you, all that goes in to help deliver a client experience.
The biggest thing that I try to do is learn what is most important to that particular owner about what they do and how they do it currently, and find a collaborative agreement around what aspects of their infrastructure should change right away and get replaced with what Buckingham does. What aspects of their infrastructure should we look to preserve, maybe indefinitely because, it’s great, and it still allows us to be scalable and somewhat consistent. Why disrupt what we have if we don’t have to?
The third option is what could we agree to slow-play and evolve over time to say, “If you have a contract in place for a piece of software or whatever the case may be, at what stage might we want to bridge that into using Buckingham? Maybe that’s a multiyear decision.” That’s the type of role that I try to play in potential acquisitions.
[00:44:11] Matt Sonnen: Perfect. In this discussion, we’ve talked about the importance of attracting employees. We’ve talked about the importance of attracting advisors. Now let’s talk client acquisition. Obviously, the client experience is critical to all of our businesses. Ryan, how does your role as head of operations, how do you affect the client experience at Thrivent?
[00:44:36] Ryan Armock: That’s what it all comes down to, Matt. If there’s no clients, there’s no us. You always have to be asking yourself, “Are we easy to do business with? Is it easy to open an account with us? Is it easy to get information? Do we have the right tools or do we have the tool in place to deliver for the client?” If the answer to that is “yes”, then “How can we make it easier or how can we make it better?” Always evolve, always improve in terms of that experience that you’re giving the clients. To me, it really helps to listen and read.
Listening to your peers, listening to your advisors and your clients, and to understand what’s on their mind. Keep up with the industry trends and the changes in client behavior. Then you can solution and innovate based on your business and client needs. Then after you do all that stuff, then you service the heck out of it. In order to do that, you have to have great people. I’ve been blessed with a great operation staff and a great staff across TAN, some of the most fantastic people in this business. Those are the boots on the ground when it comes, when it comes down to servicing those clients and making the experience all that it can be.
They’re also the people that can help you be proactive and anticipate the client’s needs because when you react, it’s the firm across the street, you’re already behind them. They’re doing more, they’re innovating. If you’re only reacting to that, you’re always going to be sort of behind the 8 ball when it comes to it. Again, the key is to really think about the experience, put yourself in the client and the advisor’s shoes, and then make sure you have the right processes and technology. Then most importantly, people in place to be able to support that and make that experience as best as it can.
[00:46:43] Matt Sonnen: Rob you’ve brought up the client experience a few different times during this discussion. What impact do you have on shaping the client experience at Buckingham?
[00:46:53] Rob Ziliak: The way that we’ve evolved the COO role, Matt, is really now– What I have the great privilege of overseeing is a set of departments that in some aspects are quite disparate, but we’re all unified resources that actually help fulfill the client experience. Specifically, what I mean by that is our advisory solutions, where we have our tax business, our business valuations, our 401k, and other for-fee services, we actually have a team of client and advisor experience. That includes what is the design of that client experience that allows for a degree of consistency, but yet intimate personalization between advisor and client.
Then there’s the training aspect so that advisors actually learn how to deliver our designed and desired client experience. It’s responsibility for our overall investment strategy team, policy committee, our financial planning team, and that evidence-driven planning committee, our strategic initiatives. Being thoughtful around what more should we be doing for clients and advisors as time goes by. Then lastly, our information and technology team, that we’ve talked a lot about during this podcast.
It’s my responsibility to lead the efforts of all of those support departments and teams that help fulfill the client experience. Ryan said it well, the way that we say it internally is very similar. We’re constantly looking to reduce friction and make it easier to do business with Buckingham and to allow clients to make it easier to stay with us as time goes by.
[00:48:51] Matt Sonnen: Well, I promised a fascinating discussion today, and Ryan and Rob, you both delivered in spades. Thank you both so much for being here and sharing your vast experience with all of our listeners.
[00:49:04] Ryan Armock: My pleasure, Matt.
[00:49:06] Rob Ziliak: Likewise, Matt, it’s great to be able to catch back up with you and I enjoyed hearing all that Ryan had to share.
[00:49:14] Matt Sonnen: Absolutely. Well, that is a wrap on Episode 39, everyone. Thank you again for listening and we will talk to everyone soon.
