News, Vision & Voice for the Advisory Community
How one conversation influenced NYC economic policy
December 30, 2010 — 3:36 PM UTC by Elizabeth MacBride
What’s interesting about online publishing is that you can watch an idea take flight. Words posted on RIABiz that seem ephemeral develop a real life as they are reposted, tweeted and linked; in the ever-changing Google Analytics chart, we can see an idea spread from our pages to other locations in the cloud. Sometimes, we even get to hear the end of the story: an idea that has leaped from the online world to spur action.
When I look back at 2010, I’m particularly proud of the ideas born on and around RIABiz that grew up and walked off on their own. Maybe the most serendipitous tale is how the CEO of a venture-backed startup called Wealthfront ended up influencing New York City economic development policy.
The story starts last spring, when I wrote a story about a company that was trying to use the Internet’s scaling power to profitably connect mass affluent clients with wealth managers. The idea wasn’t new but the company, then called kaching, was interesting because of its transparent technology and the quality of the backers. (It changed its name this fall to Wealthfront). See Can Silicon Valley rewire the RIA business? eBay investors think KaChing is the answer and Why big RIAs are taking a risk on Wealthfront.
When RIABiz held its anniversary party in August at Tim Welsh’s home, we invited the CEO, Andy Rachleff, a long-time Silicon Valley venture capitalist.
At the party, we fell into conversation about the differences between Silicon Valley and New York City, where I used to live and work. It’s funny to say, but the capital of the world has a chip on its shoulder about the fact that the truly transformative companies are being born elsewhere – in Silicon Valley, for technology – and places like Texas, for energy – and in Boston, for medical sciences. Even in finance, the transformative companies are starting up elsewhere. Consider: if you had to pick a capital of the RIA world, where would it be? Probably San Francisco.
Rachleff and I talked, and he put forward his explanation: that the venture capital community in New York is more interested in money than in building world-changing companies.
I talked to a couple of people about the idea, including New York City blogger Greg David, and ended up suggesting a story looking at the culture of New York: Can New York City Ever Grow a Google? to premier tech writer Judy Messina. It was published in Crain’s New York Business. A few months after that, New York City’s deputy mayor for economic development announced a program to create more business incubators designed to – what else – help New York City grow a Google. He cited the story that Messina wrote.
New writers on RIABiz
I’m happy to say that two of the characters in that story are joining the RIABiz community as columnists. Rachleff will start a semi-regular column on investing in the digital age in mid-January. Based on the reader response to his first two pieces, written for RIABiz on an ad-hoc basis, we’re excited he’ll be writing more often.
Judy Messina, a writer I’ve worked with for more than a decade, is taking on our new Advisor Tested column, which will look at how RIAs use technology to aid their daily practice. Look for the first one of those next week.
Some of the most enduringly popular stories on our site are the breakaway stories that tell of Wall Street brokers taking steps toward independence. We’ve always imagined, based on the traffic patterns, that they are passed around in brokerage firm offices by people considering bailing out of that world.
Last spring, I got confirmation of that when I drove out to Reston to interview the principals of one new RIA. John Choudhary and Anne-Day McCabe had left UBS for Wells Fargo only a few months before. They talked about how they climbed the emotional hurdles to independence. At one point, they found themselves at the office late one night, huddled over the computer reading RIABiz breakaway stories. ‘We thought, “if they can do it, so can we,” Anne-Day told me. See: A young advisory pair escaped wirehouse cost cuts to land at Wells Fargo.
We hope our stories about successful breakaways have helped other entrepreneurs take steps toward independence.
One-man think tank
Ron Rhoades has been an industry speaker and an oft-quoted expert on the fiduciary standard for a long time. We are proud to have given him a regular platform on RIABiz and stand in awe of his ability to write so much, so fast. (Writing, to me, is more like sweating out some weird combination of blood and coffee). Just this month, some of Ron’s good ideas flew from the RIABiz site and were reposted in places like the Garrett Financial Network, Motley Fool and AdvisorOne. See: One-Man Think Tank: The fiduciary standard may sink Wall Street’s advisors-on-yachts. Should we care?.
It’s hard to tell if his crusade to persuade the SEC to extend the existing fiduciary standard to brokers will work. We won’t even know the next chapter until mid-January, when the SEC releases its study on the issue. But we can tell Ron this: based on the traffic, RIABiz has some regular readers at the SEC.
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Top Executive: Brooke Southall
Portfolio Management System
Top Executive: Andy Rachleff
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