A year after the Advent-Black Diamond deal, the merged company is making some big chess moves

Brooke’s Note: When the Black Diamond-Advent merger happened at this time last year, the general thinking was that the two companies would have to accomplish two seemingly contradictory actions. There would have to be real management attention to the complexities of merging two companies, two cultures and two competing sales forces. But at the same time, management would have to exercise real restraint. Any effort to assimilate Black Diamond wholesale into Advent was destined to be counterproductive. Advent has many strengths, but a hypersensitivity to RIAs is not considered one of them. Black Diamond is the member of the pair that is considered to be a cracker of the RIA cultural code. What we learned for this article shows that these companies are taking these common-sense thoughts to heart with careful attention to both intellectual and human capital — though a few San Franciscans will still have to hazard the humidity in Jacksonville this summer as a human sacrifice to the corporate good.

In an unmistakable sign of change, Reed Colley is moving to San Francisco to work from Advent Software’s headquarters.

The revelation that the founder and head of Black Diamond and all of Advent’s RIA-related technology efforts is going to be based in Northern California comes just shy of the first anniversary of the sale of Black Diamond to Advent. See: Advent to buy Black Diamond for $73 million.

Colley’s move to San Francisco from the Black Diamond base of operations in Jacksonville, Fla., is “very positive” on a number of levels, according to Dan Skiles, an executive vice president with Shareholders Service Group Inc..

“It shows his personal commitment to Advent, as he can certainly contribute much more to the overall company residing in their headquarters location. In addition, now that it has almost been a year since the acquisition, it further demonstrates that Reed and Black Diamond continue to add much value to Advent.” It also returns Colley to his hometown.

Skiles’ firm has a close relationship with Black Diamond. See: Several hundred small RIAs gain access to Black Diamond software at reduced rates. But he also has perspective on the two big performance-reporting vendors from his days as head of technology for Schwab’s RIA business.

Criss-cross

The move will allow Colley to work more closely with Advent chief executive Peter Hess. The former’s role is broadening to work with other Advent business unit heads on Advent’s future technology strategy, according to the company.

“His move to San Francisco puts Reed in an even better position to lead the Advisory business and to share his entrepreneurial spirit and deep knowledge of newer technology such as cloud, mobile and social with the other businesses,” says Dave Welling, chief solutions officer for Black Diamond.

Dan Skiles: [The move] further demonstrates
that Reed and Black Diamond continue
to add much value to Advent.

Charles Goldman, co-founder of Advizent LLC, agrees. See: Steve Lockshin and Charles Goldman begin to unveil Advizent, a venture that could put thousands of RIAs under a single cooperative.

“Reed moving to San Francisco is a great move for Advent. Reed’s expertise in the RIA space and entrepreneurial focus on serving RIAs will help bring Advent to the next level,” Goldman saysl.

But it will also create a challenge: leading the bulk of the company’s 100 employees who are now 3,000 miles away. See: Peter Hess will take the CEO reins at Advent Software.

“The main challenge that I see with this move is consistent with any headquarters position … you must get out and travel frequently in the field with clients, prospects and other partner organizations, Skiles says. “The best decisions are made when executives have direct and recent experience with these constituents.”

Part of that challenge is being met by shifting Welling to the role of ground general manager of the Black Diamond team in Jacksonville. The former Schwab executive is responsible for the sales, marketing, product, service and operations teams. See: Former Schwab RIA veteran lands with Black Diamond.

“This is a natural extension of how Reed and I worked together as partners prior to the acquisition,” Welling says. “Our skills complement each other incredibly well and we are completely aligned on the future vision for the business.”

The combined sales team has two lead managers. Cathy Clauson, also recently hired — in November — from Schwab, leads the core sales team which focuses on firms with less than $300 million under management and Chris Arana, an Advent veteran, is responsible for overseeing sales to for firms with more than $300 million under management. Both report to Welling in addition to Anthony Sperling, the general manager of the asset management group.

Charles Goldman: Reed’s expertise in the
RIA space and entrepreneurial focus on
serving RIAs will help bring Advent
to the next level.

Amid this reshuffling of the deck, Mike Golaszewski comes aboard at a high level with Colley and Welling. (Ironically, Golaszewski has a home in the Bay Area but plans to live in Jacksonville for at least the next year.) See: After defecting from Schwab a year ago, Mike Golaszewski departs Pershing.

Learning to love Jacksonville

Best known for more than a decade of developing the website of Charles Schwab & Co. and, most recently, serving in a strategic position at Pershing LLC working on the NetX360 platform, Golaszewski is assuming a newly created position as head of product.

Golaszewski allows that he originally thought that having to work from Florida might be a deal-breaker.

“When Dave [Welling] and I first started talking there was basically no chance I was coming to Jacksonville, but after the first two days I knew there was something special here … I realized the San Francisco thing is just artificial barrier for me.”

Merged sales teams

Having worked with Golaszewski for years a Schwab, Welling sees in him the rare combination of technical smarts and the interpersonal skills to interact with RIA principals and to understand their culture.

Welling says that the latter ability will be very helpful as the company works more closely with third parties in the coming months and years.

“I’m excited to see Mike land back in our industry,” Goldman says. “He knows the business well and has a deep understanding of the technology advisors use.”

The creation of forward technological motion is critical in this market, Skiles says.

“What Envestnet Inc., Tamarac and even Morningstar are doing … advisors are asking for more. The speed of development is speeding up every day. The advisors are saying: 'Bring it on. I want to be with the technology companies that are innovative.’”

Mike Golaszewski: For once, it’s a
team I don’t have to fix.

Welling says another big change is that the sales teams of the two companies are being merged to create a combined force of 20 sales reps and about 17 supporting consultants. Previously, Black Diamond’s sales team consisted of four sales people and about four supporting consultants. See: Update on Black Diamond-Advent merger.

Now all the sales people are trained to sell Blue Sky, APX and Axys. “We wanted advisors to realize we could recommend what is best for them,” Welling says. See: Advent and Black Diamond are looking like soul mates but the Axys-to-BlueSky 'Easy Button’ is still on the to-do list. “When we were separate companies, many advisors had narrowed it down to APX or Black Diamond and often were unsure of which direction to go … now they just come to us and tell us about their business and what they are trying to get done, and we recommend the best technology path for them. We are currently recruiting for a couple of additions to these teams, but most of the added staff and planned personnel growth is in our product development and service teams. We haven’t let anyone go as a result of this change.”

New start

Golaszewski’s last stop professionally was at Pershing.

“Working aside dynamic and charismatic industry heavyweights like Mark Tibergien and Jim Dario has certainly been a highlight of my career,” says Golaszewski. “But sometimes you join a large institution and realize that you’re not the best fit— and that’s OK, that’s how life works sometimes. I’m certainly grateful for all of the things I learned at Pershing, but ultimately felt that I could make a more meaningful contribution to the industry at a different organization.”

But he allows that Black Diamond is very much a new day for him.

“It reminds me of Schwab when I joined in 1997. I’m surrounded by a vibrant group of people. For once, it’s a team I don’t have to fix. Everyone’s firing on eight cylinders.”