Adapting a fast-growing registered investment advisor firm to include new stakeholders, including next-generation talent, is daunting. But who better to help think through that process than the next-generation leaders themselves?
At WealthManagement.com’s recent RIA Edge West conference, Mark Bruno, managing director and head of strategic advisory at Emigrant Partners, spoke with two next-gen leaders at Emigrant-backed RIAs about how they’re re-thinking and re-positioning their firms for the future.
Stacey McKinnon, COO, CMO and wealth advisor at Morton Wealth, a $3 billion RIA, had a non-traditional path to financial services. In 2013, Fiduciary Network (now Emigrant Partners) helped Morton Wealth buy itself back from a bank. At the time, McKinnon was working as a Pilates instructor and wedding planner, and one of the two people who took over as Morton’s majority owners came into her Pilates studio. She liked how the studio was run, so she asked McKinnon to join her at the RIA.
“I said, ‘That sounds like you’re talking to the wrong person,’” she said. “She ultimately convinced me that helping people with their wealth is similar to helping people with their health.”
McKinnon made the leap, and started out filling out paperwork. She soon got her CFP and learned the business.
“When she met me, I was 28 years old, and by 31 I had become COO of the company.”
Her skills as a wedding planner also helped.
“You’re not coordinating caterers and photographers, but you’re coordinating a lot of different teams to all work together for the common goal, whether it’s the clients, the team, the company or your community,” she said.
“You may not find it in the most conventional places, but having an eye for people who do things that are different, people who have the potential to become leaders but need the time and the grooming is one of the most important things you can do as the leader of any organization but, in particular, an RIA firm that is all about people,” Bruno said.
Tylor Bordelon Seaman, CEO of Maslow Wealth Advisors, the $1.75 billion RIA formerly known as Durbin Bennett, had a more traditional background. He came into the industry out of business school and worked at Dimensional Fund Advisors as a practice management consultant.
“I was looking to go from a large company to a small company—more of a startup. I had the benefit, the luxury of seeing things that worked in the industry and things that didn’t work in the industry,” he said.
Durbin Bennett, which was founded in 1987, took on some minority capital in 2013, and then started the transition from G1 to G2. Bordelon Seaman came on in 2015, and the leadership liked the fact that he had expertise in investments, practice management and financial planning.
“They had strong leaders in each of those siloes, but they lacked the connective tissue. It was a natural evolution to go from advisor to managing partner to CEO.”
About three years ago, the firm was having candid conversations about selling to a big national RIA. They also had the option of recapitalizing with Emigrant, and they took that opportunity. This got the founder liquidity, reset the RIA’s cap table and allowed the firm to look forward to the next five to 10 years.
As part of that, the team decided it was time to pick a name that was more about ideas, over people. Earlier this year, the RIA rebranded to Maslow, which is a nod to Maslow’s hierarchy of needs.
That was part of Founder Rick Bennett’s vision, who had been a mentor to Bordelon Seaman. He was 100% behind the new name.
“It was his vision to be a firm that would outlast him,” Bordelon Seaman said.
While McKinnon hasn’t led her firm through a rebrand, she had an early objective to chart a new path forward for Morton Wealth. And when she became COO, the firm had some growing pains to sort through.
“I had to be in a leadership role at the onset where we were managing this firm through what I like to term as the ‘teenage years,’” she said. “I mean, I’m going from mom-and-pop to institutional adulting. In some ways, we didn’t do it the right way.”
At that time, she and the leadership team took the responsibility the founder had given them too seriously.
“It’s a one-to-many ratio, because you can’t duplicate what a founder did,” she said. “We took on the responsibility to run and lead the organization, and we took that so seriously that I think we accidentally made the firm feel like a little too disciplined, a little too robotic, with too many processes, procedures and systems.”
Since then, she has tried to lead the firm by elevating others and delegating more responsibilities and decision-making authority to them.
Fundamentally there was a lack of trust between the firm’s leadership and the rest of the employees that had to be overcome.
“We said, ‘We have to change this. The first thing we have to do is we have to build a culture of trust. We have to be a firm that puts people first.’”
Like many firms, they started a leadership team made up of everyone with a C-Suite title, but it wasn't working.
The conversations became very circular because, she said, they didn’t have the right people at the table.
“That was a very unproductive set-up actually.”
Morton reconsidered how a traditional leadership team works and how to bring in more useful perspectives. They created a “growth team,” which meets to discuss the priorities for the firm, and a “resiliency team,” which focuses on the infrastructure needed to carry out the goals.
“You need to give more space for the excellent people within your organization,” she said.
