What I learned from a duo of Jersey guys who visited RIABiz in Sausalito

Brooke’s Note: One drawback of conducting business in the San Francisco area is that it’s not on the way to anywhere. When I get in-the-thick-of-it East Coast visitors to visit RIABiz here, I try to make the best of it by exploiting West Coast advantages. Here are some discursive thoughts from recent stopovers by Brian Hamburger and Suresh Kumar [accompanied by Trent Witthoeft.]

Two weeks ago I had visits from two high-profile and hard-charging players in the RIA business at our West Coast headquarters in Sausalito – both working to influence the market from very different angles.

Suresh Kumar is Pershing’s chief information officer. He brims with thoughts about technology and RIAs. Brian Hamburger’s law firm helps keep advisors out of legal and regulatory trouble in ways that don’t inhibit the RIA firms’ growth.

Both men from New Jersey are working to create one-stop shops for financial advisors in their respective fields. Kumar is working to create a technological central nervous system that virtually any kind financial advisor – or any person working in one of the strata of firms – can call home.

Hamburger talks about creating a single trusted advisor to advisors to ease the RIA burden of juggling four or five.

Perhaps coaxed by the Pacific breezes, they both spoke with perspicacity about how their business plans and dreams are taking shape. In both cases, my conversations spanned more than six consecutive hours and it still felt only a surface level was being scratched. I was sympathetic.

Span of time

They asked me penetrating questions about RIABiz and I felt only moderately successful in making them understand our venture in the span of time.

Suresh Kumar made the trip across country to San Francisco – and then the next leg of the trip across the Golden Gate Bridge to Marin County – to help Nevin Freeman, the RIABiz chief technology officer, and me to get a better understanding of NetX360. You can see the product of several hours of interviews and demonstration of Pershing’s macro software in two separate articles that address the technology: Pershing believes its case for NetX360 as the Apple equivalent for advisors is solid and Nevin looks under the NetX360 hood after it gets 100,000 new users and some overhauling.

But there’s only so much you can tell from a PowerPoint presentation run by an out-of-body cursor controlled by late-working Summer Fischer back in New Jersey.

Nevin and I wanted to better understand Kumar himself, to glean something about his knowledge, vision and temperament. He is seeking to help Pershing evolve from its identity as the dominant clearing firm for more than $700 billion of IBD assets from reps. The dream seems to be aid in their transformation into a giant stable of RIAs, hybrid RIAs and other wealth managers with efficiencies popping out of every pore of their laptop. He has the benefit of in IT staff of 3,000 people who report to him.

Fresh out of the cab from
their cross country flight we convinced
Suresh and Trent to pose in
front of the Mill Valley town
hall.

One challenge was that Kumar and his colleague, Trent Witthoeft, asked to meet in our offices – a place dominated by dogs, bikes and stray notes. Brent Burns, principal of AssetDedication, a separate account manager of bonds, graciously allowed us to use his firm’s conference room amid the redwood trees of Mill Valley.

They arrived here at about 3 p.m.; we didn’t break off until about 10 p.m. Over dinner, the conversation wavered little from technology. Clearly, this is the passion of Kumar who jousted with Nevin — also hot on the theme — over what makes Google and Apple click, the strengths and weaknesses of HTML and the future of mobile computing. There were flare-ups of disagreement followed by concord. “Once we got talking, we did agree,” Freeman said.

Carlos Santana

The subject of the simmering topic of the iPad intensified when Carlos Santana, in a dark woolen cap, sat alone at the restaurant table next to us – and spent his time looking in to his Apple tablet.

After eating, Santana stopped by our table as Witthoeft caught his attention so we could pay our respects. The rock star then gamely joined in the conversation about the karma surrounding the iPad. Santana laid out three levels of reality and put television and its ‘illusions’ at the bottom.

He put his afternoon activity of walking on Mt. Tamalpais on top and the iPad in the high-middle. He moved on quickly before we could conduct deeper inquiries.

Kumar and Nevin agreed that the iPad’s future may be – hype aside – underrated. NetX360 is clearly going mobile as Nevin’s review shows. The Pershing chief says he has resumed reading the Wall Street Journal because of the app that allows it by iPad.

The soft-spoken Kumar is focused, deliberate, intellectually ravenous, open to others’ opinions, unassuming and well-traveled. “There was no PR-ness; it felt like he was talking to someone on his development team,” Freeman said.

I didn’t always follow the technical conversation but I noticed that Kumar was willing to acknowledge apparent strengths that were weaknesses or vice-versa. He seems to have the skills and energies to take on a project that encompasses so much business management and technology. And he says he draws on the MBA-equivalent he earned in India as much as his technical training to perform his job.

No leg room

We apologized for making him squeeze in the back of Nevin’s old Acura Integra and thank him for being a good sport in swinging by my place to feed the dogs and see a little of houseboat life. The same thanks go to Witthoeft who kept the discourse lively over the course of the longest demo ever done by us.

Brian Hamburger with Oscar takes a
break from the board room meeting.

Hamburger was in San Francisco for the Salesforce.com conference with 10,000 other CRM users. His company, like many RIAs – and in large measure, Schwab Intelligent Integration – relies on the company’s software for its automated approach to staying in touch with clients.

He was also in town to look for office space for the growth of his West Coast presence as MarketCounsel and the Hamburger Law Firm, and to interview candidates for his left coast offices. The combination of these firms he sees as an ‘end-to-end solution’ or one-stop shop as I know it. It’s for advisors that want surrounding compliance – deep legal services or help finding the right SEC form.

When Hamburger suggested that we convene to share thoughts, I suggested that he join me on my evening dog hike. We walked the coastal trail between Rodeo Beach and Tennessee Valley – a high-cliff path along unspoiled coast where waves crash and Asia-bound freighters steam by.

Hamburger talked about his desire for growth and change. His MarketCounsel Summit – with an amped-up schedule and roster of talent — scheduled for later this week is an example. Stars include: Joe Duran, Bill Crager, Mike Durbin, Dan Skiles and David DeVoe.

We handed off the camera and
Shadow and I got photographed as
part of the out-of-the-office conversations. This
snapshot was taken by Hamburger about
5 miles from the Golden Gate
Bridge.

Stays in Vegas

Hamburger explained how much more difficult it was to organize the event in a far-away state [Nevada] than he imagined. The conversation wandered to whether New Jersey schools, however well-rated, are right for his children and whether he might move himself and his family to California.

He expressed an admiration for the atmosphere California provides for human souls and businesses. This is something I agree with but not something you hear much these days. I thought about how San Francisco continues to be a hub for matters related to RIAs even while the state’s fiscal troubles, high cost of living and tax policies continue to push some of the RIA community’s stalwarts too grow elsewhere.

BlackRock is expanding in New York and Ken Fisher is migrating thousands of employees to the Washington state woods. Putnam Lovell has consolidated to New York. The size and tenure of Schwab Advisor Services in this area remains an overweening influence. BlackRock is still strong here; Wells Fargo is strong here and Advent Software rounds things out.

There is also a world of Schwab alumni – including Chip Roame, Tim Welsh, Dennis Clark and Jeff Roush — with no intention of leaving the RIA realm or the Bay area. Litman/Gregory, Genworth Financial and Loring Ward and WealthFront are other Bay area RIA-centric companies with a progressive air.

Of course, the only all-RIA publication has three-quarters of its partnership here, too, and we have no plans to budge. Frank Noto likes San Anselmo, Nevin, Santa Clara [though he’s eyeing Berkeley], and me, Sausalito.

Budding RIA brain trust

As I continued walking, I was thinking that it would nice if that critical mass of RIA brain trust continued to build on itself – even going so far as to lure a New Jersey denizen like Brian Hamburger.

Elizabeth’s note: Pacific breezes have their appeal, but I must point out there’s a sizeable RIA brain trust on this side of the country, where an extensive transportation network turns the East Coast cities into the Megalopolis. It was the huge community of RIAs on the East Coast that led Schwab to a smashing Boston IMPACT in this year, enlivened by Fidelity’s presence across the street. Moreover, it’s important for the rest of the nation’s business community to keep humming along outside of California. Someone’s going to have to bail our largest and fairest state out of its fiscal crisis.