From Office to Couch and Back: Why I Joined Diversified

Welcome to what I hope will be a long-term and meaningful series of conversations between us. Over the years, I’ve had the privilege of observing and discussing trends in the business of financial advice, and I look forward to continuing that dialogue here on this new platform. Some of you may be wondering, “Why now, why this and why here?” Let’s kick off our journey by addressing these questions right from the start.

Why now?

I made the decision to leave my previous employer almost 15 months ago, and I have no regrets about that choice. After nearly 28 years with the same company, it felt like the right time. This decision aligned seamlessly with our family’s long-term financial plan and by design, I had a proven and successful successor in place – Shauna Mace. Her team has made some significant moves to strengthen their practice management offering – things I had never considered or could have accomplished.

The primary goal was to transition into semi-retirement, reducing my work-related travels and increasing leisure travel which I have enjoyed so far. This transition also was with the intent of gaining more family time including important milestones such as our oldest son graduating from high school and embarking on his first year at U of Pitt. I had the opportunity to be more present and see our younger son continue to mature, and obtain his driver’s license, and I even got to attend most of his high school wrestling meets. A perfect world, right?

However, that does not imply that I can just walk away from an industry that has been part of my life for almost 40 years. I still maintain connections with advisors, industry friends, and colleagues with whom I speak and share ideas, observations, and frustrations. I am part of an advisory council to a promising fintech firm which keeps me active (at arm’s length) and I follow the social media accounts of many industry leaders and influencers agreeing with many and vehemently disagreeing with others. You can say it is in my blood.

Why This?

I have always been passionate about the growth of advisory firms – but not just for growth’s sake.  I have witnessed (and experienced) the transformative impact of a well-crafted financial plan. I know that there are so many families out there that would benefit from the experience and counseling of a good financial advisor. Growth, to me, means more people achieving financial freedom not just more AUM or revenue for a firm.

One of the phrases that has always stuck with me is “Growth is the lifeblood of an advisory business.”  As we assess 2023, most of you will look back and see a large increase in AUM and feel great about yourself and your business but how many of you will look at the root cause of the growth? Were you able to help more people or did you ride the wave of the market?

Let’s do a quick exercise to show what I mean:  In very rough numbers, the S&P (proxy VOO) grew just under 25% last year and the bond market (proxy BND) was just under 2% – that means if your average client maintains a 60/40 portfolio, your firm AUM growth for the year needs to be roughly over 15.8% account for the markets.  If your growth was higher that is great – but ask yourself, was it because of a plan? Is it repeatable?

Next look at your expenses – while AUM (and thus, revenue) is mostly likely up, for most of you so are the expenses. Almost everything cost more in 2023 than in 2022, so even if you did grow by more than 15.8%, what was your net margin? Did it increase or decrease?

Why this? These are the types of discussions I want to have on these pages!

Why Diversified?

This part was not a difficult decision. I have had a longstanding association with Diversified, having consulted with them over the course of many years. The partners and professional management at Diversified have played a pivotal role in propelling business growth, creating systems for success, and ensuring a planning-focused experience for their clients. While many firms consider sitting back and resting on their accomplishments, it is the DNA of the firm to continue focusing on both organic and inorganic growth. It is in my DNA too.

What’s next?

I look forward to collaborating with the advisors and staff at Diversified, focusing on growth and best practices. I look forward to sharing with you, our readers, what is working (and what’s not) as we enter this new chapter together. 

I invite you to subscribe to Notes and reach out with questions and comments.