A week after he became chairman of Eric Clarke's board, Charles Goldman is heading the search to replace Clarke as Orion CEO-- at Eric's direction
Eric Clarke founded Orion in 1999 and built it to a $3.6 trillion AUA juggernaut, but he believes both he and the company are ready for a big change
8 min read
Brooke's Note: Losing Eric Clarke feels unthinkable. We tire. He never tires. He has done 48 years of work in his 24-year nurturing of Orion into a $3.6 trillion software and investments company. Besides running his company, Clarke hosts conferences and hackathons and also shows up at other people's events. He is self-effacing and unassuming, but also the presence at any RIA event that shows it's on the map. He returns reporter phone calls and emails and stays cool when things go wrong. When I asked Charles Goldman what exactly makes Orion so special as a software company, he said that it does so much so well and with good integration, yet also in an open architecture way. So is Eric. RIAs readily identify with a person and a company that live their message of inclusion and putting other people first. Yet, like RIAs, trade-offs occur as a company like Orion becomes a big organization determined to maintain its rate of growth and evolution. That's a lot for a former mom-and-pop founder to take on, and makes it not only thinkable for Eric to step aside but possibly quite brilliant.
Charles Goldman is launching a search to replace Eric Clarke as CEO of Orion Advisor Solutions – at Clarke's request – with an eye toward a future where the company infuses artificial intelligence with abandon.
Goldman, the former AssetMark CEO and just-elevated executive chairman of Orion, is heading a committee that will spend the next “90 days” to identify, hire and onboard its next chief executive. See: Charles Goldman takes seat on Orion board sparking thoughts about RIA custody comeback in Omaha and just what it can do with the Redtail, Brinker and TownSquare acquisitions
The following 90 days will be devoted to training under Clarke's tutelage. Clarke is on the search committee and will remain on the board of directors.
“We're going to go out and find a world class CEO,” said Goldman, on the same Friday Zoom call with Clarke from Colorado.
Clarke was in Omaha, Neb., and Goldman planned to be in Omaha today, Monday (May 22). Both internal and external candidates will be considered.
The next phase
The irony is that Clarke made the move to nab Goldman, so that Goldman could go out and replace him.
“I felt that Charles would do an exceptional job as chair. Charles is a former CEO. He has worked in the fintech, asset management, custody/brokerage and the TAMP space for years,” Clarke said.
The plan of Clarke, 49, to depart by the end of 2023 is the culmination of his growing conviction that he's given his all to Orion, and he's ready for the next phase of his life.
“This is not an easy decision and it's something I've been thinking about for a number of years,” Clarke says. “I've given 110% to the business. My wife said: What are you going to do when you retire?”
He adds: “I want to spend more time with my family and spend holidays without taking phone calls. I can't wait.”
Clarke should feel good about exhaling, says Tim Welsh, president of Nexus Strategy.
“Orion has always been a rapidly evolving enterprise, running at warp speed since the beginning, which thrived under Eric’s leadership,” he says. “I can’t think of anyone else in the industry who could have accomplished what he did and is why he is so admired and respected as an innovator and true leader.”
“But at some point, the company needs to bring all of the components together and provide a unified strategy which takes a different type of executive skills and experience. So, I think that having Brian on hand, and now with Charles – it does make sense to take that pause and identify the next generation of leader who can make all of that vision into a reality.”
A terrible loss in the RIA business of the original breakaway broker
Reaching a threshhold
Though Orion laid the groundwork for succession – not least handing Brian McLaughlin the day-to-day job of running Orion Technology – the final decision came down to having Goldman aboard for an entire year and ascending to executive chairman. See: Eric Clarke hands 'Orion' reins to Brian McLaughlin in big reorganization that frees him to begin high-level hacking of 'One Orion' with newest hire Michael Wilson
Indeed, McLaughlin's ascension was the head-spinning pivot, says Joel Bruckenstein, producer of the Technology Tools for Today events.
"I think that the acquisition of Redtail was the "mike drop" moment. He now has a technologist who can take the Orion technologies to the next level."
“He is leaving a team in place that is capable of moving the business forward.”
“Eric will always be a part of Orion’s DNA. We will continue to honor him and his vision,” says Brian McLaughlin, president, Orion Advisor Technology.
Yet Goldman, 59, provides the sense of security Clarke needed for a full-fledged exit.
“With Charles coming in, I feel more confident than ever before,” Clarke says, “That is really allowing me to take this step. I wouldn't have felt this confident.”
Goldman says he is not in the running to replace Clarke as CEO. Asked if he might become “interim CEO,” Goldman said that he will, in part.
The “executive” in his title implies some operational overlap with a CEO and that he would step in were Clarke unable to perform his duties.
“You can rule out that I'll be permanent CEO,” Goldman says.
Story Timeline
Though Clarke says the decision is largely personal, he also has a sense that Orion has reached a threshold where he might not be the “best [person] to take the business to the next level.”
Orion now employs 1,400 staff, and it administers $3.6 trillion in assets, including management of $61.7 billion, as of March 31.
“Let's leave on a high note,” Clarke says. He turns 50 in September.
Carrying culture
His starting note was to create performance reporting software for his dad's RIA, then spin it out.
His timing was auspicious because it was just as RIAs began to look for software as a service. The two market leaders – Advent Software and Schwab PortfolioCenter – were inextricably moored to the desktop.
Eric Clarke hands 'Orion' reins to Brian McLaughlin in big reorganization that frees him to begin high-level hacking of 'One Orion' with newest hire Michael Wilson
Next level and high notes aside, Goldman concedes that he would – all things equal – prefer for Clarke to stay in his CEO job.
Yet, he gets Clarke's exit decision in light of a similar decision he made two years ago in leaving AssetMark.
“Being a CEO,” Goldman says. “It just takes your whole life.”
Asked whether he fears that Orion can advance without the revered, competent, caring and trust-inspiring presence of Eric Clarke himself, Goldman says he believes that Orion carries its culture across its organization.
“My experience is that the place is filled with people like that,” Goldman says.
Emphasis on fintech
Nevertheless, a new leader gives the company the chance to push in new directions.
The new CEO must have both strong managerial and “strong fintech” capabilities “and be somebody who can spell SEC and RIA,” Goldman says.
The “fintech” emphasis in the job description alludes to Orion's artificial intelligence (AI) push that is arriving like the onrush of an Omaha crop train.
“AI is going to be a key integration point for scale and experience benefits,” Clarke says. “It represents how we are bringing it together.”
AI will be especially important for RIAs not only because of the mounds of risk data pulsing through the firm but also the demands of acting on that data according to SEC and FINRA rules.
“Advisors can't just go to Google,” Goldman says. “They need to use it in an intelligent way.”
Ready to fly
Asked if the need for a leader ready to take on AI expedited his succession process, Clarke said it was just the opposite and made it harder to leave.
When asked if Genstar and TA Associates are taking an active, or passive, role in directing strategy at Orion, Goldman did not demur.
“Any PE [private equity] investors worth their salt never takes a backseat, so their roles are important.”
PE owners, he added, get more active when it comes time for talent searches, M&A and financing.
Of course, PE activity goes ballistic when it comes time to sell – something that Genstar and TA will absolutely affect, according to Goldman. TA has already had a stake for eight years.
“PE will sell the company,” Goldman says.
He adds that he is not laser focused on an IPO because various private transactions can prove just rewarding – to another PE firm or a strategic buyer, for example.
Asked how his batteries are holding for taking on this big talent search, Goldman says he's had ample time in the charging station.
“I left Assetmark two years ago and got some sleep, rode my bike and learned how to fly,” he says.
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