Welcome back to the 192nd episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Paul Pagnato. Paul is the co-chairman and chief visionary officer of Cresset Capital, a multi-family office with nearly $9.5 billion of assets under management for just over 600 ultra-high-net-worth clients. What’s unique about Paul, though, is the journey he’s had as an advisory firm owner, from a nearly 20-year career at Merrill Lynch to breaking away to work with HighTower Advisors as a partner, deciding to go out entirely on his own as an independent RIA to build his own vision, and then deciding to merge his multibillion-dollar advisory firm into Cresset and give up control in order to further expand the reach of that vision.
In this episode, we talk in-depth about Paul’s entrepreneurial journey through the industry. How the stresses of the financial crisis on the brokerage industry created a unique conflict that led him to leave the wirehouse world after 20 years there, the challenging learning curve than an advisory firm faces when first breaking away, the unique stresses that emerge in the client relationship when the Broker Protocol and wirehouse employment agreements require that clients not be informed about the plan to leave until surprising them with it after the fact, and why it’s so important to have a strong support structure in place with experienced vendors when making the decision to break away as a large team.
We also talk about the unique multi-family office that Paul built once he was finally able to go fully independent. The $90,000 a year flat fee structure the firm uses to serve its ultra-affluent clientele, why and how Paul’s firm weaves together tax services, legal support, and even concierge travel assistance into their high-net-worth offering, the unique approach of quarterly experiments that Paul’s firm conducts on an ongoing basis to come up with new ways to serve clients more efficiently, and how Paul has been able to scale efficiently with a philosophy of always trying to outsource as much as he can.
And be certain to listen to the end, where Paul shares the journey of deciding to merge his multibillion-dollar multi-family office into an even larger one. The investment banker he used to explore the options, why he ultimately decided to sell instead of raising capital from a private equity firm, and how he got comfortable with the decision to no longer have full control with the decision to merge.