Schwab's Bernie Clark on why RIAs are figuring out how to grow ... and other items from the RIABiz cutting room floor

Elizabeth’s note: The advice that writers should “kill all their darlings” (usually attributed to William Faulkner) is commonly directed at literary writers, but journalists pull sharp knives on their stories, too. In reporting a story, we come across an idea (or a person) so interesting that we include it in a piece in which it doesn’t really belong. Then, during editing process, those sections almost always get cut in the interests of length, time and coherence. Brooke and I looked back over our stories this month and found three compelling ideas from the RIABiz cutting room floor that we thought might be of interest to you.

Bernie Clark pulls it all together

At Schwab’s EXPLORE conference, Bernie Clark talked about how there was a distinct sense of mission and resolve among RIAs about finding ways to grow. (A glimpse inside Schwab’s EXPLORE conference). He made the point that it had simply been too easy to grow before, so it was hard for advisors to put systems in for growth. An analogy is that if you’re being carried along by a tidal wave, you’ll never learn how fast a swimmer you are or be able to perfect your stroke. The markets from the early 1980s to 2008 were largely like that. Then, market conditions were so bad that advisors were paralyzed in chaos. Now, it’s clear that advisors must figure out how to get a return on their work.

Brooke Southall

An Ameriprise advisor with another mission

One of the advisors at the new Ameriprise franchise in Leesburg, Va., lost his sight at the age of 20 when a bullet discharged accidentally from a hunting rifle ripped through the wall of his house and then into his head, severing his optic nerve. (How Ameriprise used its franchise system to snare a Smith Barney breakaway).

Despite his disability, Chris Harvey built a successful practice. He was a Smith Barney broker before he broke away to establish the groundbreaking franchise. (He’s one of two owners of the franchise).

Harvey has a side business as a motivational speaker and an author. He’s written a prize-winning Christian book about his journey: Until My Blindfold Comes Off.

Harvey’s humor came across in his comments about the advisory business in the article, but in a news story it was hard to capture the confidence about the future he exudes. That confidence most likely lies behind his success as an advisor, but is rooted in his relationship with God.

“I believe I’ll see again in heaven,” he said as he signed a copy of the book for me.

Elizabeth MacBride

The company from Minneapolis

The Ameriprise advisors talked about the feeling of Midwestern values that comes across when they deal with Ameriprise, which is based in Minneapolis. The relationship between a company’s location and its culture is amorphous, but it’s real. Could the financial crisis have been born anywhere but New York City, where ambition commonly trumps every other value?

Manish Dave, vice president of business development for the advice and wealth management segment of Ameriprise, moved from the hurly-burly of New York to take the Ameriprise job. He had been senior vice president of human resources for Bank of America’s broker-dealer. He said Minneapolis is a great place for children – he has two – and that being surrounded by people who have jobs outside financial services provided a dose of realism during the recession.

“Warren Buffett talks about how being in Omaha keeps him grounded,” he said. “There is something to that.”

Elizabeth MacBride

RIABiz this month

A few weeks ago, RIABiz organized its stories into three new sections. In addition to the Breakaway Stories section, we created sections on Technology, Asset Custody and Conferences. Technology has proved the biggest hit so far, including as it does stories on such hot topics as Schwab’s Project C, Black Diamond, and VEO. The Asset Custody section includes profiles on all of the industry’s major custodians, including Schwab, Fidelity, TD Ameritrade and Pershing, and a growing number of up-and-coming players, including “Ceros Financial:“https://www.riabiz.com/a/1812010, RBC and Trade-PMR. We add stories to the section as we become aware of other custodians. The Conferences section includes our coverage of the industry’s major and minor events, including the Schwab’s IMPACT, TD Ameritrade’s big conference and Pershing’s INSITE, as well as more focused events like T3. The last section is still under active development: we hope to add more features of use to advisors in the coming weeks.

Our RIABiz directory hit a milestone this month. Two hundred service-providers to RIAs have filled out listings in the directory, including the six latest: 401(k) Rekon, 6WebDesign, LLC, American Pension Services, LLC, BaySys Technology LLC, Matria Business Solutions, LLC and Next 10 Clients. You can always find the ten most recent listings on the “Directory home page“https://www.riabiz.com/d.

Our position on scandals

Some people have remarked to us that they appreciate that RIABiz isn’t out to “stick it to” people. Our view is that extensive coverage of scandals isn’t helpful to advisors who are trying to run and grow their practices. However, sometimes we feel we can advance a story or point out an issue that a scandal brings to light – such as the case when we noticed (with the help of a tipster) that Kenneth Starr’s chief compliance officer was his own son, (See What the ADV form of Kenneth I. Starr’s RIA reveals and what to make of it and Ronald Starr steps down from board seat citing the 'misfortune’ of being his father’s son) or when we could speak to the executives at an embattled firm to hear their side of the story (See As DOL investigation continues, Geller Group says it is executing the final stage of a four-year succession plan). We are always happy to hear your feedback on stories we ought to be covering.

Intelligence on RIAs

For those who look to RIABiz for intelligence on what matters most to the advisory community, here are the top stories on RIABiz in the last month:

• What Cogent’s new study says about where RIAs stand in the 401(k) business
  We have consistently found interest in 401(k)-related articles. It seems to suggest thhat RIAs see lots of opportunity in gathering these retirement assets and little good information about them.

• 10 reasons why LPL Financial could pull off a hot IPO in a cold market
  LPL’s own initial public offering documents are a treasure trove of information about the company and its strategy. This article made heavy use of that information along with comments from top analysts.

• A Harvard lawyer, a Columbia MBA and an engineer break away from AllianceBernstein private client unit to form an RIA
  Here was an interesting story with a headline that was able to capture the subplot.

• Cetera Financial shores up its technology as it prepares to take on LPL for big hybrid RIAs
  Who doesn’t want to know what the ex-Paine Webber chief behind this venture is up to as he brings aboard big-name talent and technology to compete in a crowded field of IBDs?

• Improbable win for fiduciary standard: Congress set to hand SEC power to impose fiduciary duty on broker-dealers
  This was one of the biggest big-picture stories in advisory history.

• What to make of Mark Hurley’s latest prophesy that most RIA firms will go out with a whimper
  Who doesn’t want to get perspective on a bold theory that — if correct — bodes badly for virtually all RIAs?

• 10 advisors explain how they build sales without getting 'salesy’
  Every RIA wants more sales and few want to sell. This article tackles that paradoxical situation in a positive way with comments from a brilliant array of sources.

• Envestnet buys a company to gain an edge with Schwab RIAs
  Envestnet is doing many interesting things right now — including its filing for an IPO and it is unabashedly trying to morph into something far more comprehensive than being a giant TAMP.