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Ben Harrison and Mark Tibergien
Ben Harrison and Mark Tibergien

What’s Ahead for Tibergien, RIAs and Pershing?

Outgoing Pershing Advisor Solutions CEO Mark Tibergien still plans to do some consulting and coaching, and says his decision to retire had nothing to do with competitor Schwab’s upcoming merger with TD Ameritrade.

BNY Mellon Pershing announced this week that Mark Tibergien, the longtime and beloved CEO of its custody business, will retire in May; Ben Harrison, currently head of business development and relationship management for the firm’s advisory segment, will take over his duties on June 1.

Under Tibergien’s leadership, Pershing grew its RIA assets to over $800 billion as of the end of last year. For decades, Tibergien has been considered a guru and thought leader in the industry, speaking at RIA conferences, providing insights and bold predictions.

In an interview with, he continues to make bold statements, predicting that the RIA business model will unfold in years ahead. In the joint interview, his successor Harrison also provides his view of the future of the business.  

On Harrison’s appointment, Tibergien said it was a very involved process; he had been planning for his retirement and evaluating candidates for the past five years. The ultimate decision was made along with Tom Gibbons, CEO of BNY Mellon, and Jim Crowley, CEO of Pershing. And while the other candidates were not chosen, Tibergien says they’ll likely take on greater roles within the organization. What are your plans in retirement?

Mark Tibergien: My plan is to rebalance my life, so I'm going to rebalance more in the direction of fun, friends and family. We’ll sell our place in New York and return to our home in Seattle. But it’s hard to imagine that I would enjoy being completely without something to do. So in an ideal world, I would have a few board positions. I currently chair the workforce development committee for the CFP Board Center for Financial Planning. I’m also on the new SEC asset management advisory committee.  

I also plan to continue to do some occasional mentoring or coaching or consulting engagements. And I'd like to continue writing and speaking. That's something I enjoy.

My wife and I were intending to take a trip to Belgium where my family's from in May, but we haven't booked anything yet because we just don't know how things are going to shake out with the coronavirus. As you know, the competitive landscape in the RIA custody world has changed dramatically over the last several months, especially with Schwab’s announcement that it will acquire TD Ameritrade. Given all this change, do you think it's a good time to get out? Or a bad time?

MT: I had this on my calendar for a long time, so whatever Bernie Clark and Tom Nally decided to do had nothing to do with my plans. But I will say this: That merger was all about retail and how they get closer to the end consumer, and the disruption that it created was an opportunity for Pershing. I think the leadership team that we've built here and the individuals who we’ve attracted to work here just continue to make us a formidable competitor in the marketplace. The same would be true in the E*Trade circumstance; they’re really not a material factor in the custody business at this point. That clearly was a retail decision to go down market by Morgan Stanley. And with the Goldman Sachs acquisition of United Capital—those are three great examples of firms expanding their retail direct-to-consumer connection. Major financial organizations are attempting to establish their brand closer to the economic buyer, and in many ways bypassing the intermediary.

In our case, with BNY Mellon and Pershing together, we're the largest custodian in the world with $37 trillion of assets or more under custody. Something like 25% of the world's financial assets run through our enterprise every day. And we’re a B2B organization. So frankly, what we do is serve financial intermediaries, and just being better at it and ultimately being dominant at it is consistent with our corporate philosophy and strategy. The disruptions become distractions for firms that are not prepared to manage it. We've been very clear on a strategy all along. Ben, given the change in the custody business, what direction are you taking Pershing? You recently announced plans to modify the onboarding requirements for advisors, for instance.

Ben Harrison: And as custody businesses continue to converge, the need for platform integration, technology, client experience and everything that we can deliver as the brand behind the brand becomes extraordinarily important. So we've got a really strong foundation there. Now it's about taking it to the next level and utilizing those key differentiators and expanding our addressable market, taking advantage of the dislocation in the marketplace in that movement towards more of a direct-to-retail type of play by our competitors. And really empowering firms, even emerging firms that are looking to be energized and seeking growth opportunities—that’s going to become more in our purview of optimal clients. We are organizing our talent and our ability to serve these multiple channels as we head into the future. So, what I'm hearing from you both is no plans to get into the direct-to-consumer business?

MT: Not only are there no plans, but when it was Bank of New York, they were in the retail business, and sold that business. They sold their retail business. It's inconceivable that the company would ever want to do that because being retail versus being B2B is a massive undertaking. What does the future of the custody and RIA business look like?

MT: One of the things that I expect is that more attention will be paid to people who don't have money yet and still need to navigate financial choices. And that could be a fundamental shift in how advisors deliver service to individuals. As a result, advisors will have to think about their own value proposition. If you strip away market returns, the average firm is probably growing organically at a rate below GDP. So you have to wonder, in a normalized market, what will it take for them to continue to attract people to provide returns for their owners, to invest in their own proposition and to be relevant to the market? I think that in many cases you're going to just see the business model unfold. And I think that you'll see more advisory firms trying to get to critical mass either through merger or through organic growth.

The implication for the custodian is, I think in the last 10 years, the role of the custodian has become misunderstood. I get the impression that people perceive the role of the custodian is to be the technology provider. The reality is that our role is to provide the safety and soundness of clients’ assets, reporting and validation and helping in the risk management of that, as well as on the execution of trades and the delivery of financial solutions like cash management and so forth. The challenge and the opportunity for custodians is to be more clear on what value we are delivering to advisors and their clients and in return defining how we get paid for that. There’s been a lot of uncertainty around the service levels provided to advisors at the custodians. Are you changing your service levels?

MT: From a service experience standpoint, we're really focused on this notion of transparency and choice and flexibility. We work with clients that we think fit our optimal profile, and conversely, they feel like they're getting value from us. It's the investor that is paying the custodial fees. It's rare that the advisor is. And so part of how we have to think about this is, are we aligned with the way in which our advisors want to do business? We recognize that economics will define different levels of service and experience, but we're not inclined to charge for things that people won't get. Mark, I know you participated in Pershing’s reverse mentor program, where millennial talent are mentors to executive leaders. What are some of the big lessons learned from those relationships?

MT: The first lesson is that you have to be open to comment and criticism regardless of a person's position in the business. And if we don't think about how employees feel, then eventually we won't have any employees. And second, the client experience is very much informed by people who grew up digitally, who apply these lessons in daily life. And they just continued to teach me not how to turn on the computer, but how to think about how they interact with each other and with technology.

The third is probably understanding what drives different human beings. What my generation tends to value in many cases is more black and white. I think that reverse mentoring program has really taught me a lot about nuance and the psychology of individuals. And that in the end, it's not always about money. In many cases it's about personal fulfillment in a different way.

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