Peter Mangan and wily Dan Skiles host pre-elite RIAs on their Torrey Pines turf with bragging rights and a sense of SSG style

Shareholders Service Group, among the most reserved amid a class of RIA gazelles that leaped into being in the past 10 years, continues to add three firms a week and now counts more than 1,600 RIAs as clients, many of whom attended this years annual conference in La Jolla, Calif.

The San Diego custodian doesn't like to market, boast, or open retail branches. In fact, it's guiding light is to win the hearts of its employees through their stomachs, then let them feel their oats.

“We actually spend more money on employee lunches to reward their efforts than we do in sponsorships, advertising and promotion combined,” said Dan Skiles, Shareholders Service Group president at the gathering. "Our secret sauce is our people."

What Skiles knows from his days at Schwab is that RIAs pretty much judge their custodian based on service--period--and that takes experience and solid customer service.

“The average tenure of our service people is over 16 years, so they have the knowledge, skills and experience to get things done and delight our advisor clients.” (Many of the service people at one time worked for Jack White, which was swallowed by TD Waterhouse in 1998.)

Though many custodians choose San Diego and its blissful weather for their national events, (Schwab IMPACT 2019 will be here), the SSG version has a different texture because it is home turf for them.

SSG picks resorts off the beaten path, like the Hilton Torrey Pines this year. It's  tucked right next to the golf course and seaside cliffs.

The proximity means they bring pretty much the entire SSG staff to work the registration desks and other facilities, as opposed to event vendors in blue vests. Many know the advisors by name. 

Referral fueled

The continued source of SSG’s growth come from referrals from existing advisors, industry associations such as NAPFA, and referrals from a few of the mega custodians for advisors who don’t fit their molds just yet, says Barry Boyte, head of marketing for SSG.

SSG has a loyal following from its client base, who show up in numbers at its annual event (300+), and from the advisor technology community. In fact, the SSG conference is a technology event in disguise, boasting one of the largest technology presences this side of T3. 

Software vendors like it because many of the RIAs are emerging and eager to embrace technology -- even ones they haven't do so in the past. A common refrain from technology providers overheard in the exhibit hall is that, “it’s a rarity, but at this conference, advisors actually want to talk to me.”

New to the SSG tech gathering and the advisor tech world this year was DataPoints, a predictive, behavioral finance platform designed to help advisors work with clients. It's based on DataPoints PhD and founder Sarah Fallaw's best-selling book, “Millionaire Next Door." The book has since been updated, and the new edition is called “The Next Millionaire Next Door." 

This technology solution will help advisors identify potential millionaires, better coach clients on how to gather and maintain wealth, as well as offer new risk profiling solutions, according to the company. 

The exhibit hall this year was up 50% over last year, with the traditional industry leaders, such as Black Diamond in attendance. Upstarts, like (full disclosure a client of mine) Capitect recently inked a deal with SSG to provide performance reporting and rebalancing, along with a new kind of client portal.

SSG continues to take a Zen approach to its own growth

“We’re getting bigger and smaller at the same time,” says Skiles, “by being the most efficient RIA custodian in the industry.”

For SSG CEO Peter Mangan and Skiles, execution is top of their priority list. 

“This year we are up 15% to 25% in number of advisors, new accounts, transfers, trading and service requests across the board, yet we’ve been able to manage all of this with zero hold times,” says Mangan.

The growth is big enough to attract some legacy firms.

Going all in

Russell Investments is one company going all in on SSG's future potential. The Seattle-based money manager inked a broad marketing partnership with SSG late last year and was one of the top sponsors of the event.

As part of that marketing deal, Russell's top investment strategist, Mark Eibel, director of client investment strategies, told how to “dial up and dial down” exposures to various industry sectors and global markets.

Eibel likes emerging markets for their growth potential, and Europe because it follows the US approach from a few years ago with zero interest rates, quantitative easing, cheap stocks and-- rest assured --a “deal will get done” to stem Brexit worries.

Skiles, ex-tech chief of Schwab Advisor Services, hosted Aaron Klein of Riskalyze, Ed O’Brien of eMoney and Brian McLaughlin of Redtail, which serve a combined 200,000 financial professionals – eMoney, 60,000, Riskalyze, 20,000 and Redtail, 130,000.

Klein is betting the "Envestnet-ization" bundling trend will reverse itself and his strategy is to focus on their core expertise.

"There’s always going to be a tendency to want to bundle everything together – it’s just the cycle of technology. But for us, if we to try and build every piece of the stack, we would be very mediocre at everything, and not good at any one of them,” he says.

O'Brien used the stage to call out his former employer and eMoney owner.

O’Brien pointed out that eMoney is actually part of the “diversified investments” division of Fidelity, and not the financial services and custody side. Fidelity retail is actually a client of eMoney and this distinction helps eMoney maintain its independence with the industry, he contended to few nods.

For McLaughlin, the future lies in AI and machine learning to help advisors get the most out of the massive CRM data.

“This is a relationship business, and as people become more-and-more comfortable with sharing their data and the boundaries continue to get pushed, advisors will have the opportunity to gather more-and-more data – so let’s let the computer analyze it and put it to work.”

All of these tech leaders agreed that security threats are the new mafia that needs to be paid protection money. “I continue to write a lot of large checks to the security vendors,” notes Klein wryly.

Event Keynotes

Marketing guru Tina Powell, CEO and founder of C-Suite Media, kicked off the event with a high energy keynote on marketing strategies and her interesting and innovative “asset allocation” approach to marketing advisory firms.

With many marketing channels available to advisors, Powell’s advice is to strategically invest in a short list to best market and grow their firms.

Former LA. Dodgers player and Angels Manager, Mike Sciosia was one of the more popular keynote speakers. Sioscia regaled the crowd with inside baseball anecdotes about the characters on his world series championship teams, playing for Tommy LaSorda and his hope that major league baseball never goes to robot umpires. 

Closing out the conference was the iconic Bob Veres, who shared his research into client service. “Everyone believes that client service is important, but how do you measure it?  How do you track what you are doing and improve it?”

This fundamental question led Veres to pose a survey question to his Inside Information readers and ask advisors to define “client service.” The response, according to Veres, was “a hodge podge of answers,” which he was able to boil down into 6 themes:

• Set clear expectations for service delivery, and then exceed them.
• Be responsive to requests and remind clients of that responsiveness
• Develop enjoyable interactions with clients and personalize meetings, by remembering clients’ birthdays, activities, travels, details of family members, having their favorite beverages on hand, and more
• Provide high quality professional advice, which goes without saying
• Exhibit exemplary conduct and character – maintain ethical standards, don’t get arrested, or caught in any scandals
• Visibly care about clients’ well-being – hugs are good, and caring/empathy is the one thing that will always keep the robots away

If you can leverage technology such as your CRM to document and record these types of interactions, Veres believes advisors will be able to track how they are doing, and measurably improve client service.

Fun, fun, fun

SSG also has a reputation for bringing the fun factor to its conventions, including, in this case, a “Top Gun” Tom Cruise/Maverick doppelganger, who took photos with attendees.

SSG, T.Rowe Price, Black Diamond, StoneCastle, Rightsize Solutions, 55ip and Totum Risk hosted the golf event at the exquisite Torrey Pines, which includes 18-hole courses on the coastal cliffs overlooking the Pacific Ocean.

It's best known for hosting the 2008 U.S. Open, won by Tiger Woods in sudden-death after an 18-hole playoff against Rocco Mediate.

Attendees attempted heroic golf shots, while enjoying the spectacular views.

To learn more about what went on at the SSG Conference, check out the many tweets on the #SSGConf hashtag on Twitter.

Timothy D. Welsh, CFP® is President, CEO and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry and can be reached at tim@nexus-strategy.com or on Twitter @NexusStrategy.