Jeff Rosenthal became the president and CEO of Triad Advisors on Jan. 1, 2016, succeeding co-founder of the Atlanta-based broker/dealer, Mark Mettelman. Rosenthal, who previously served as executive vice president and chief marketing officer, sat down with WealthMangement.com to discuss the transition, as well was the challenges and opportunities on the horizon for the firm.
WealthManagement.com: Triad announced in December that Mettelman would move into the role of chairman at the start of this month after spending 17 years at the helm of the firm. Was it a smooth transition? What are some of the components that made it a success?
Jeff Rosenthal: It’s really a testament to Mark and what he’s built that the transition was so smooth. I’ve been there 13 years and I’m probably one of the youngest members on the senior management team. Our head of operations and business development has been there since we opened our doors, Nate Stibbs, head of business development, has been there 15 years. Mark, over the years, has taken a great deal of diligence in putting together what I think is a good, loyal team. So when this time came, we had a team in place that really wouldn’t miss a step. And it's not like you're not bringing in someone from another culture. At the end of the day, what’s important to us, to Mark, to our advisors and to our parent company Ladenburg is that the culture stays the same. We’re not in an ivory tower, making decisions and then passing them on down. At the end of the day, our job is to build relationships. So we’re out shaking hands, running for office every day. So when this change came, many advisors said, ‘well, that looked like it was happening anyway.’
WM.com: What’s the biggest challenge facing independent broker/dealers like Triad this year?
JR: The easy answer is Department of Labor [proposed fiduciary rule for advisors], because of the cost of what it’s going to take to comply. Luckily we’re blessed to have a culture that is focused on the small, boutique model, but still have the backing of a large enterprise like Ladenburg. We're able to leverage the collective intelligence of other broker/dealers within the enterprise and be able to build solutions that still meet the need of independent broker/dealers. So the costs are spread out; it’s not just coming from the pockets of a single small broker/dealer.
WM.com: Are you having conversations with advisors who are contemplating moving completely away from the commission model because of the expected regulatory changes? What are you advising?
JR: About 80 percent of our advisors are running their own RIA. Do we have some guys who are running a traditional model? Yes, and we’re educating them. But the conversations we’re having are not about completely abandoning the commission business for a total RIA—the conversations we’re having are around choice and flexibility. We’ve already seen, depending on what regulators decide what they want to do, they can dramatically impact your business. Who knows what two years brings, what five years brings?
WM.com: Triad has grown substantially in recent years. Where are you seeing recruits coming from?
JR: We have 625 affiliated advisors. Last year was a tremendous year in terms of recruiting. And size going forward is a question we always ask. It’s funny, when I joined the firm in 2002, that’s the question I asked Mark: what’s the number? The answer is we’ve never put a number on it. We want to continue to grow, unequivocally that is a goal, but measured growth.
And we’re starting to swim upstream, working with larger advisors, more significant offices. For us, the bulk still comes from industry, from the independent side. I think that goes to the fact that we’re so focused on that hybrid advisor—you own your own RIA. That’s a big change for wirehouse advisors. It really takes a unique, special individual to do that.
WM.com: What’s the horizon for Triad? Any changes you’re planning to implement?
JR: The idea is really to perfect what we’ve built. And that’s a broad mandate. But I really believe that through Mark’s guidance, we have built a firm of lasting quality. And the key to be able to grow that firm, and still provide the level of service we promised to our advisors in 1998 to those same advisors in 2018, that’s where the devil’s in the details. That’s the vision. At the end of the day, our lights turn on because our advisors are successful. You’re never going to be perfect, but at least we’re moving toward that.