Operations has more leverage with RIA owners now than possibly at any time in our history—it all starts with you caring just a little bit more than anyone else.
The RIA industry has always done a good job detailing the career path for those aspiring to become financial advisors and ultimately owners in their business. In fact, the CFP Board Center of Financial Planning put out a fantastic report last year titled “Financial Planning Career Paths,” where they spelled out the responsibilities and compensation levels as an employee progresses from analyst to associate advisor, service advisor, lead advisor and ultimately a partner of the firm. But for those not interested in becoming a financial advisor, is there a path that can lead them to becoming a partner through the operations or service track?
I posed this question to Steven Beals of EP Wealth Advisors and Eric Hehman of Austin Asset on a recent episode of The COO Roundtable podcast.
Beals responded, “You don't have to work for a company with tens of thousands of employees to have a career path and an opportunity to seek a job as somebody who oversees operations or a chief operations officer of an investment advisory firm. I don't see a lot of obstacles at the firms that are outside my window. They really do value great talent and invest. Certainly, a thirst for knowledge, people who are innovative and looking to make positive change, enjoy communicating with people at all levels… those are all important attributes of successful COOs, in my experience.”
Hehman’s career at Austin Asset began with an unpaid internship. He took it upon himself to follow the founder of the firm throughout his day, marking on a clipboard areas in which he saw room for improvement with the firm’s processes and workflows. After working his way up from various positions to the COO role and having served in that position for seven years, he transitioned to running Austin Asset as its CEO and principal and has done so for the past 13 years. He seems uniquely qualified to provide advice to those looking to ascend through the operations channel to ultimately own a piece of an RIA.
To those aspiring employees, he says, “There is no one way to get there. If you care just a little bit more about this thing than someone else does, then that could become a whole new avenue of the business that you can have an impact on. I just cared a little bit more about QuickBooks than the founder did. I cared a little bit more about organizing the files and making sure we had agreements for all our clients than he did. So, it started at a very basic level…”
“I think any of us (RIA owners) would look at our employees, our staff, and say, ‘If you’re making a positive impact to the business in a way that didn’t exist before, I want to advance that and expand that as quickly as possible.’ I think that’s where an operations person can have a huge impact.”
The stereotype against millennials and Gen Z is typically that they want too much responsibility, too fast, without earning it. Hehman’s advice provides a simple framework for employees to follow to earn that extra responsibility that they cherish. Later in the podcast conversation he added, “I think the most valuable part of a career path that you’re going to design for operations is just understanding the impact of pulling this lever and the impact it makes to the other side of the firm. Essentially, when I think of the COO role I was in, it was, ‘How can I live above the noise that’s happening every day, but then also know how to reach into (the business) and move things around to make it more efficient?’ I’ve got to know enough (about the components of the business) to know what I need to do when, and so I think that’s where anyone, even an entry-level position in a firm, can go to their supervisors or leaders on their own and say, ‘I care about this one little area. I’m not saying it’s being neglected or that no one is doing their job, but what if we put a little more water on that (apply more attention)? And I’m willing to bring the bucket. I’m willing to bring the bucket and do it myself.”
While there is a well-defined, linear progression up the advisor track, it’s important for operations professionals to acknowledge that there is no worn path to ownership for them. They must take it upon themselves to create their own opportunities. Beals added, “It may not be the path that you see for yourself, but at the end of the day, we have a lot of really hard working, passionate people in our business. I think a lot of (RIAs) are looking for really great people, and they want to invest in them and allow them to grow. You can tackle it from all angles.”
Hehman continued, “I love the fact that people might start in a client service role and then move to the planning team, or they might start in an operations role and then move to an investment role because the exposure to how the business comes together, those dots that are connected… I think the beauty of operations is that you might be able to live in a world where you see those dots connect before others (do).”
The current work-from-home environment has thrust operations professionals into the spotlight and reminded everyone how important the non-client facing roles can be to the organization. This is truly the opportunity for operations-minded employees to assert their knowledge and provide the biggest impact on the business.
Hehman had this advice: “If you're a founder listening to this, reach down into the team and get their feedback on areas of the business during this time right now, because it's all new. It's a great place to ask the people on the front lines, ‘Hey, how are those wires going? What's it like to data enter information from a virtual meeting?’ I mean, just whatever these things are that we're doing differently, because you could find some real gems in there from the team that can help the operations of the firm.”
Should the current owners of your RIA not come to you with these questions, you must take it upon yourself to seek them out and find your area of expertise, the area of the firm that you truly want to make your own. Operations has more leverage with RIA owners now than at possibly any time in our history—it all starts with you caring just a little bit more than anyone else.
Matt Sonnen is founder and CEO of PFI Advisors, a consulting firm that helps financial advisors build more impactful and profitable enterprises. Follow him on Twitter at @mattsonnen_pfi