Mentioned In This Article
Philip Palaveev, former president of the Fusion Advisor Network, has launched his own consulting firm focused on helping advisors build team-based practices. The Ensemble Practice LLC, staffed by former Fusion execs, plans to work with about 30 to 40 individual advisor firms, including RIAs and broker/dealer FAs, who are making the transition to a team-based practice or growing an established one.
“The future of the independent side of the industry is really in advisor-owned firms that are operated by the partners who actually service clients, not by passive owners, not by public companies, not by consolidators,” Palaveev said. “I think ensemble practices offer that balance between size, scale and resources, but at the same time giving professionals freedom to do what’s right for the client.”
In July, National Financial Partners, the independent financial services company headed by Jessica Bibliowicz, announced its acquisition of Fusion, which provides high-touch practice management strategies to member firms and also allows them to benefit from economies of scale with vendors.
Palaveev will continue to lead practice management at Fusion on a consulting basis. He is also bringing over Victoria Godyn, former marketing manager at Fusion, to lead marketing efforts, and Jonathan McQuade, former director of practice management at Fusion, to focus on human capital and recruiting talent. Palaveev will act as CEO.
NFP Advisor Services Group and Fusion will, however, be a client of Palaveev’s, as he hopes to form strategic relationships with two to three b/ds and one custodian. These strategic partners will get the benfits of preferred pricing, more available capacity, more flexible schedules, as well as having programs and recommendations designed around their operations and capabilities.
But rather than focusing on practice management and an advisor’s practice, a small entity, the new firm will focus on helping advisors come together in partnership to build a business.
“A practice to me is what advisors do with their clients,” Palaveev said. “What we focus on is the business behind that practice. Something that’s larger than just the owner, something that involves multiple people, involves multiple professionals, has processes and systems and so on.
Ensemble will help teams create a vision and a strategy to grow their business. That strategy has to be supported by business development and growth, which Godyn will specialize in; by human resources and human capital, McQuade’s specialty; and by managing the finances and profitability, Palaveev’s expertise. Palaveev says he will seek to add an operations and technology component to the mix.
Practice What You Preach
The move coincides with Palaveev’s new book, The Ensemble Practice: A Team-Based Approach to Building a Superior Wealth Management Firm, slated for October.
“As I was writing the book, I realized that I had a desire not just to write this as an academic exercise, but actually help advisors do it, be involved in it.”
Part of the reason he chose “The Ensemble Practice” as the name of the firm was to signal that his firm also operates as a team.
“It would be really ironic if it was just me helping advisors building a business, an ensemble business,” he said. “In order to understand a partnership, in order to work with a partnership business, you have to be a partnership yourself. Single people will probably not give you very good marital advice.”
The Firm’s Services
The big question is, will Palaveev be using Fusion’s high-end, high-touch approach to practice management at the new firm? Fusion really pioneered the structure of advisors getting together to learn from each other and develop other practices, and they’ll continue to do so. But of course, Palaveev and his team will borrow what they’ve learned in their careers, which include Fusion.
Palaveev said this firm aims to be different from Fusion; Fusion was a network of advisors that was centered around a broker/dealer, NFP Advisor Services Group. Whereas, The Ensemble Practice is much closer to a consulting firm, not centered around one broker/dealer, and it’s defined by helping teams.
The first way Palaveev plans to help teams is through The Ensemble Institute, a group-based workshop involving a three to four-year curriculum. They’ll bring in 10 to 15 firms at a time to learn from each other and go through a curriculum on business management. That will include marketing, sales, operations management, technology management, human resources, compensation, career path, partnership arrangements, equity succession, etc. In areas where Palaveev’s team are not experts, the firm will partner with other consultants to fill in the curriculum with their specialized expertise. “Think of them as guest lecturers,” he says.
The firm will work closely with its advisor clients on an ongoing basis, not on a project basis. Rather than just fly in and fly out, they’re going to help them implement their recommendations and adjust the strategy as needed.
Palaveev says they’ll charge the clients based on the results they deliver. If the advisors don’t see the revenue growth they expected, their fees will be reduced.
According to Palaveev, the ideal advisor client will have more than $1 million in annual revenue, or about $100 million in AUM; a staff of four or five people; more than one professional or the intention to hire another very shortly; and a dedication to building a business, not a lifestyle practice.
“If the goal of the advisor is to build a nice practice for themselves, where they derive a nice income and balance of life, that’s not us.”