WASH., DC – Most RIAs start out by making some fundamental mistakes, according to Joe Duran, chief executive of United Capital.
‘We do such important work and yet we treat it in such shallow ways,’ Duran told delegates on the Schwab IMPACT conference. ‘[The customer] can’t tell the difference between you, an accountant and a bank teller. We’re all money people. We think that they can tell the difference but they can’t.’
The real rot at the center of a bad RIA is an organizational structure that functions as a cult of personality around its founder, Duran explained during a panel discussion on providing a better client experience.
‘The question everyone should ask their own team is: “Who do we serve?”’ he said. ‘I think you will find that most independent firms, if you ask their staff, will say: “We serve you, master.”
‘The whole business revolves around keeping that person happy, rather than the founder saying, “No, we serve our clients.” Some firms serve their shareholders. Some firms serve the employees. The vast majority serve the founder, because the founder is the one who got the clients, makes all the decisions and takes great pride in telling everyone what they don’t do well enough.’
Duran took particular exception to the way RIA firms try to use their own clients as a source of referrals for additional business. The founder of the 89-office firm, which has more than 20,000 clients, said that using meetings intended to help clients plan for their future as a revenue generator was morally repugnant.
‘It’s demeaning and cheap and it automatically sullies your reputation,’ he said.
There’s only one solution, Duran said – prioritize the time you spend with each client on their actual goals and desires, even if it means you can’t quite fit in as many meetings as you want. If you really want to generate more business, ask them if their friends or family need your help and offer them your time at no charge..
‘You’re not asking for a referral, you are serving your clients. You are there as an asset,’ Duran said. ‘Your time is valuable. It will mean you’ll spend an hour with two or three people for every one you get.’