Participants:
Steve Wershing
Julie Littlechild
Eric Clarke
Steve Wershing: On this episode, we talk with Eric Clarke, CEO of Orion Advisor Solutions. Clarke has appeared on Think Advisors IA 25 lists in 2012 and 2019. And in 2019, also received the Investment News Icon and Innovators Award. We begin our conversation talking about how, during the current pandemic, Orion has managed to keep a technology and trading organization of over 700 employees operating virtually. And, during the discussion we find lots of good ideas that advisory firms can use as well. Orion began as a technology firm. Since then, it has acquired an asset management platform, and most recently, a financial planning system. We discuss the pros and cons of utilizing an all-in-one solution like Orion has put together, versus tying together best in class performers from each area, which Orion also supports. We talk about possible competition, from direct to consumer platforms, and how advisors can respond. And listen through the end, where we talk about the effect on referrals of how you put together that combination of services. Eric is one of our industry’s top thought leaders, and he’s actually deploying the concepts he sees as the future. So here now is our conversation with Eric Clarke. Eric Clarke, welcome to the Becoming Referable podcast, thanks so much for joining us. Julie Littlechild: Eric Clarke: Steve Wershing: Eric Clarke: So we have just over 850 members of our staff, across six main office locations so we, first, started with our Manhattan and Seattle teams working from home on March 10th. Then, we moved our Omaha, our Long Island, and our Philadelphia offices to working from home on March 16th. Then, our Cincinnati office on March 18th. And, we’re monitoring our service levels very closely, using a lot of really great technology tools to help us continue to collaborate, and stay in touch with each other. And, make sure that we’re able to be all hands on deck because not only has this created a work-from-home environment, but it’s also created a lot of volatility in the markets. Every single day, we’re seeing the markets move a couple of percent up or down, and that has created a lot of volume in our systems. So, happy to talk to you more that about, and some of the things that we’re seeing along those lines. Steve Wershing: Eric Clarke: In addition to your core operations systems being cloud based, a couple of years ago we made a decision to go with a cloud based phone provider, which allows us to route calls to people wherever they’re at, including from home. And, we’re also leveraging tools like online chat, so that our advisors can quickly reach out to us, right away when they need us, and be able to have a conversation via a chat window as opposed to having to email or call us with questions as they come up. I think enabling those types of technology capabilities for advisor to client is also mission critical, so that clients can conversationally chat with their advisor, whether that’s electronically or through a cloud based phone system. But then, we always have those legacy applications, typically firms will have a couple of them, we certainly did, that we enable through Citrix, and that technology has been around, obviously, for decades. We’ve probably all used Citrix as part of our business continuity plan for a number of years, but that’s also a good system because this, as I said, unfolded very quickly so that’s a very good technology to help you take those legacy systems and enable a work-from-home environment. Steve Wershing: But, you mentioned things like enabling chat or electronic communication with clients. There’s probably things you’re doing to enable more, or enhanced, chat or communication between employees, since they’re not all sitting in the same space. Are there some suggestions you can make on that? And then the other question that’s related to that is how are you maintaining the social connections that you have among your staff, now that you’re all in different locations? Eric Clarke: So, we’re using tools like Slack to help our teams stay connected, and interact with each other on a real time basis. We’ve also used it to host application meetings and huddles. And, we have encouraged our teams to leverage technologies like Zoom as they’re meeting with their advisors, and to mt with each other, as a team, for their daily huddles, or even hosting and having virtual happy hours with each other, things like that have been really fun. For those of you that use Slack, you segment out your communication into different channels, as well as having the ability to direct message each other. But in Slack, we have some pretty fun channels that are around helping people exercise together, even though we’re physically apart, and share pictures of pets, pictures of things that they’re doing with kids and as families, and those types of things are really fun. Using Slack, for us, has dramatically reduced the amount of email that we’re sending to each other, which is, I think, just a huge win across the board. And, I would expect us to continue to migrate in that direction here, as we move forward. Julie Littlechild: I did want to pick up on one of your earlier comments, Eric, you mentioned volatility. What it made me think is the fact that, as much as we’re talking about work-from-home, as if it is a technical issue, we just need to figure out how to get set up and how to communicate, it also seems that fundamental communications are also changing. It’s a different environment, clients have different challenges. And, as you said, the market is increasingly volatile. So what are you seeing as some of the biggest challenges that advisors face now, in terms of communicating with their clients on some of these topics? Eric Clarke: So I really applaud those advisors that are making those behavioral outreaches to their clients, and helping them cope through this on a much broader scale than simply focusing on the financial impacts of this pandemic on their portfolio, or, say, a financial goal that they have. But, they’re stepping back and they’re really helping the client with models to help them adjust behaviors, look at this with a different perspective, and adjust their paradigm lens. That’s been incredibly valuable. I’ve attended several of those webinars that our advisors have hosted, and really enjoyed them, and found great benefit from them. I’ve gone home, shared a couple of things with my college age kids, and helped them adjust the way that they’re thinking about things as well. I love this industry, and these fiduciary advisors, and their ability to step back, and really help their clients in some fantastic ways. Steve Wershing: Eric Clarke: You get to a point where you accept the fact that you can’t do what you had planned, the trip that you had planned, a get together, an event, those things are clearly canceled and off the table. But, with that understanding, what can you do today that’s the next right thing? Being able to adjust your perspective accordingly not only applies, obviously, to portfolio advice, but it applies towards being able to help us accept and adjust our perspectives with our lives as well. Steve Wershing: Eric Clarke: Julie Littlechild: You know, Eric, I’d love to look a little more broadly at the work that you’re doing. As we look at your firm, which has evolved so tremendously over the years, moving from technology into being a TAMP, there’s planning, and marketing services. I have to imagine that that evolution is a reflection of the problems that you’re trying to solve for advisors today. So, how would you define those problems, how do you see your role in helping to bridge some of those gaps? Eric Clarke: As a result of that strategic thinking, we’ve been able to deploy some capital and acquire FTJ Fund Choice, which really allowed us to extend out strategies to the advisors that we were serving from a technology perspective, bringing UMA and SMA capabilities to them, and helping them implement those within their portfolios in a technology-savvy way. We were also able to acquire a financial planning firm in July 2019, called Advisor. That, although financial planning acquisition was very much about creating and extending out a best in class client experience to our advisors, to leverage with their clients. As we look at who we really admire in this business, and who we think are doing some things on a very cutting edge basis, obviously we’re all aware of the robo advisors. But, the one in particular that stands out to me is Personal Capital because Personal Capital uses that best in class technology experience to prospect, and connect, and grow their firm. As we looked at the landscape, what Advisor was doing fit squarely in that space, and really allowed us to extend that type of capability to the advisors that we serve. Julie Littlechild: Eric Clarke: You know, as we look at the industry in general, I think we’re seeing a huge shift from an asset management centered value proposition, to a planning centered value proposition. The one interesting thing about this is that clients don’t particularly enjoy the process of going through a financial planning exercise, that end-to-end, full blown planning exercise where they’re making decisions five, 10, 15, 20 years out, and entering those assumptions in, getting back a thick financial plan that typically sits on the shelf, and doesn’t get a lot of interaction and engagement. Maybe once a year, or once every couple of years, it gets dusted off and updated. I think it’s really important that we help advisors embrace episodic, just in time planning that’s relevant to the client’s specific situation. I think that’s absolutely critical so that the experience, as we shift from asset management value oriented propositions to financial planning oriented value propositions, that the experience that the client has is actually better. As opposed to something that, maybe, would be along the lines of getting a root canal. Julie Littlechild: Eric Clarke: Steve Wershing: Julie Littlechild: Steve Wershing: I’m going to relate this to one of my hobbies is woodworking. In my shop, you can buy tools that do a bunch of different things, or you can by a collection of tools, each of which does only one thing but does it exceedingly well. When I’ve worked with those, I’ve always seen a trade off between the things that can do a bunch of things, and the things that are really limited, but really good at a particular thing. I’m interested in your perspective on in building what I would view as … You can correct me if you disagree … what I would view as an all-in-one strategy, as opposed to choosing one area and getting really good at it, and making sure that you have ways of communicating and integrating with other really good, really specialized kinds of applications. Can you give us a little bit of your perspective on that trade off? Eric Clarke: So, going back over six years ago, we opened up our client portal as an open source project out on GitHub. We opened up our API, and allowed our integration partners, like Redtail and Salesforce, to come in and leverage that data, and allowing our advisors to have some real operational efficiencies. So for us, it’s not only about creating a great client experience, or creating operational efficiencies, but it’s, at it’s core, supporting the independent nature of the advisors that we serve. Now, I can tell you that, over time, one of the things that we’ve learned is that integration can be a source of frustration to the advisors that we work with. So we try and make that as easy as possible, by forming deep relationships and partnerships with the other technologies that our advisors are using. We get together with those partners on a regular and frequent basis, reviewing items that are top of mind to our advisors. We have Slack channels, so we’re communicating with each other throughout the day via Slack, to make sure that those integrations are working. And yet, at the same time, if there’s something that we can be doing better for our advisors, we’re absolutely going to go after that. If we can be providing a better client portal experience, and you know what? That might involve aspects of planning, we’re going to be pursuing that. But, we’ll continue to integrate with the third party systems that our advisors love, and we’ll be champions of that. As I explain it to my team, what we’re all about is independence, bundled. If we’re proprietary in providing that bundled solution, that’s great. If we need to use third party integration partners to provide that integrated, bundled experience to our advisors, then we’ll absolutely be supportive of that as well. Julie Littlechild: Eric Clarke: So for instances, the custodians that many of our advisors us have lowered their tradings fees to zero. So I think that opens up opportunities for our advisors to create more tax efficient portfolios, take advantage of tax loss harvesting without that friction point existing, and maybe even challenge some of their traditional assumptions around building portfolios, just by using index funds or ETFs. Now, the technology exists to replicate those indexes, and get the tax benefits of individual security ownership with a couple of clicks, and the advisors can extend tax alpha out to their clients in a very unique and efficient way. So I think that we should be looking at the things that are change in the industry, and asking ourselves what changes can I be making in my business, to benefit my clients that I serve? Not just simply saying, “Well, this is a very interesting thing,” as these custodians are competing with each other to win business. But really, step back and ask ourselves, what can we be doing differently, as a result of these fundamental shifts that are taking place, and how can I help my clients win as a result of these shifts? Steve Wershing: Eric Clarke: When you look at any business, really, your marketing engine creates the leads. Your sales team creates clients, and your operational teams create promoters. Those promoters, then, in turn create referrals back, which become leads. That’s how any business really operates as a team. As I look at Vanguard, Schwab, Personal Capital, Betterment, they all have fairly aggressive digital ad campaigns in place that are generating a lot of leads, a lot of opportunities. And, advisors have a lot of third parties that are providing marketing campaign capabilities out there. They just simply need to look at, what can we be doing to execute these campaigns? What markets should we be targeting? How can we narrow cast our message to the specific type of client that we can really come in, and add a lot of value to? The firms that are executing those digital ad campaigns successfully are seeing a lot of really great lead flow as a result. Steve Wershing: Eric Clarke: But then, not only knowing what message you want to put out there, but then how do we track the interest that comes in? Whether it’s downloads of a white paper, or downloads of some educational material, and how can we then execute an email campaign to follow up, and really nurture those leads? But, when it comes to referrals specifically, I always tell my staff, our marketing team, again, creates the leads, our sales team creates the clients. But, our operational and IT staff, that’s where we create promoters. So every time we engage with an advisor or client of ours, I ask them to look at the communication and ask themselves, “Am I creating a promoter, or am I simply maintaining a client?” Because our objective needs to be to create promoters for our business, and do whatever we can to help support those advisors that we serve because those advisors, in turn, will then create referrals back for our business. As advisors are listening to this podcast, I’d like to challenge you to do the same thing with your teams as well. Really look at the operational teams that you have, the experience that you create, and leverage that to create referrals. You know, there’s a book that I read several years ago, called Brand Harmony. That Brand Harmony book really stressed the importance of the client journey, that client experience, and making sure that the marketing message doesn’t promote something that’s very different than the client experience. I think that’s something that we all need to step back and look at, constantly, with our businesses. Julie Littlechild: Eric, just before we wrap up, though, I always see you as someone who’s got their finger on the pulse of what’s going on. How do you stay current on what’s happening in the industry? I ask, because I think that might be helpful for advisors as well. Eric Clarke: I think that we constantly have to be willing to embrace change, and be adaptable because times like this, especially, we create opportunities for ourselves to come out the other side so much stronger. If we can have that mindset of being adaptable, and really digging deep to challenge ourselves and our teams as leaders saying, “Hey, you know what? This is our new norm. Understanding that, what can we accelerate today that puts us in position to win tomorrow” Steve Wershing: Eric Clarke: Steve Wershing: If someone wanted to find out more about you, or more about Orion, where could they find you? Eric Clarke: Steve Wershing: Eric Clarke: Julie Littlechild: Eric Clarke: Julie Littlechild: You can get all the links, show notes, and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs and other resources. Thanks so much for joining us.
Welcome to Becoming Referable, the podcast that shows you how to become the kind of advisor people can’t stop talking about. I’m Steve Wershing.
Yeah, welcome.
Thank you, Steve and Julia. It’s an honor to be on the podcast today, and I look forward to talking with you here, over the next few minutes.
Yeah, we’re looking forward to it, too, and we really appreciate your taking some time because this is a crazy time, and lots of things are going on. One of those things is that most of us can’t go to work the way that we traditionally do, and I know that you have done a lot of figuring out how to keep the team running, even if you can’t all be in one place. Can you tell us a little bit about how much of your team at Orion has moved to remote work? And, how you’re supporting their efforts at that?
Absolutely. We are 100% in a work-from-home environment, at this point. Back at the beginning of March, as the virus situation began to unfold, we were dealing with a status of what to do with our teams. At the beginning of March, it was a week by week, and then it moved to a day by day, and then almost an hour by hour situation, as we made decisions to move members of our team to working from home.
Yeah. Well, I think one of the things that we’d love to get from you is some of those insights because, as you say, you’ve got a very large team, and a lot of different locations, and you’re working in a time critical environment. A lot of advisors are also having to figure out how to work from home, and have staffs, and trying to figure this out. So, you’ve got a lot more resources that you’ve been able to tap into, so what could you share with our listeners about what you’ve learned, that might help them work more effectively in that distributed model?
Well, I think it starts with making sure that your business is running on cloud based applications, wherever possible. Those cloud based applications not only provide you the ability to work remotely, but they also typically will provide greater transparency in the data and information that they store.
Yeah. Obviously, a lot of this stuff that we’ll want to dig into a little bit more, in terms of what do we learn from this and how you will operate in the longterm. For those firms that have legacy systems in the office and they’re trying to cope with it, what kind of suggestions would have for the short term? One you just mentioned, which is utilize Citrix to get some of those legacy systems up online, so that you can access them even if you’re not in the office.
Well, it’s absolutely critical because we think of web enabling or cloud enabling our mission critical systems, but we also have to recognize that the culture of our of business has been dramatically impacted by this work-from-home environment.
I think you’re raising so many important points here. One is getting rid of email, I’m with you on that. Slack is often a tool, I think, for larger teams, but it could be anything from other chat features, or even What’s App, there’s a lot of different things being used right now.
Well, I think that the topic itself has changed. We’re not just talking about an economy that is in a correction, we’re talking about a global pandemic. And, while many of us may have been aware of pandemics that took place centuries ago, I don’t think that any of us ever planned to live through one. And as we find ourselves in the middle of that, a lot of clients are scared, a lot of advisors are reaching out behavioral techniques to help clients cope with this new reality that we find ourselves in.
What are a couple of the most interesting points that you took home from those advisor webinars? What kinds of things did you share with your kids?
Well, there was a model that Alex Murguia at McLean Asset Management shared called The Rain Model. Alex has a PhD in clinical psychology, so he’s uniquely skilled, and his perspective on stepping back, being able to recognize our emotions that we’re feeling. But, not letting those emotions become us, just simply say, “Hey, I feel this way. Now, I’m going to step back, and adjust. And say what can I do today, with the understanding and acceptance of this new reality, what can I do today that’s the next right thing? With consideration of the circumstances that I find myself in.”
Well, in addition to that, I would add that one of the things that’s overwhelming a lot of us, advisors and clients both, is the fact that we have no control over this. You can really get overwhelmed quickly because this is a whole situation that you don’t really have an ability to influence. So just giving people something to do, giving them something that they can control, helps quell some of those anxiety feelings that we get.
You’re exactly right.
Yeah, it’s a big part of, certainly, the research that we did this year, on this concept of self confidence, and what we can do. These things have always been important, but probably more so now than ever.
Well, we’ve certainly had the good fortune of being partnered with TA Associates as a private equity investor in our business over the past five years. They have helped us really think differently about our business’s strategy, and what we can be doing to more broadly help the independent fiduciary advisors that we serve.
So you talk about best in class client experience. How do you see this kind of technology specifically supporting a differentiated or best in class experience?
Well, we’re all about enabling our advisors unique value proposition, helping them accelerate and accentuate what makes them unique in the marketplace. Identifying what their great at, and then being able to individualize and personalize our technology, to help them extend those capabilities out to their clients.
I hear you. So, where you do see the future of some of this going? I imagine you have moments of imagining what that will look like.
Well, I think that it involves a context that creates an interactive and enjoyable experience for the client, and it also has to be efficient for advisors to execute and provide to clients at scale. So there’s not a better example than this pandemic that we’re living through that would allow us to see the importance of having a planning technology that allows us to engage our clients, allows the client to interact with that technology on a real time basis, and ultimately becomes the hub of all things financial for that client. So that they are engaged in their financial plan, without even directly knowing that hey, I’m creating a financial plan, here.
Julie, did you want to ask more about that? Because I’d like to ask about the all-in-one versus separate thing.
Yeah, no you go ahead.
Eric, you have taken your firm in the direction of adding more capabilities into a suite, into a unified, connected group of applications. I’m interested in your perspective on this, because I know I have feelings from the past, and I’m really interested in hearing what people think about this.
Absolutely. The 2000 plus firms that we serve with our technology are independent advisors, and they’re independent for a reason and they typically have very unique value propositions. So for us to serve those independent advisors, we not only have to be great at the services that we provide to them, but we also have to open up and allow them to leverage the data that we do have across other systems that may be providing additional value adds to their value proposition.
We touched, briefly, on Betterment and whatnot, and the impact on the advisory business. Are you seeing any different kinds of competition coming that we should be thinking about?
Well, I think that there are things that have fundamentally changed in our industry that advisors should be taking advantage of.
Do you have any thoughts, an example of how an advisor might adapt? You mentioned Personal Capital before, as a great example of a firm that goes direct to advisors. Then, there is Vanguard Personal Advisory Services, that throws a human in the mix, there, and does it real inexpensively. Do you have any examples of something that you took from observing firms like that, that an advisor might think about incorporating into how they do business?
Well, absolutely. All of those firms that you just mentioned have some pretty significant digital ad campaigns that they’re executing. It’s going to be more and more difficult for advisors to win business, especially in this environment where we can’t meet face to face with prospects. I think that it’s always a good idea to look at these digital ad campaigns, and advisors to challenge their marketing teams to say, “What can we do to create leads for our business?”
So you mentioned in there the secret word for the podcast, which is referrals. I’d like to specifically get … You said you’d observed a few things that some of these companies are doing that bring in not only fresh leads from new marketing campaigns, but also stimulate referrals. How do you see an advisor leveraging some of these evolving technologies to increase that means of getting new leads specifically?
Well, there are digital ad campaign tools. We launched one this past week, which we call Marketer. Marketer really allows the firm to come in, select the type of campaign that they want to run, whether it’s around college savings, retirement income, retirement accumulation, they can execute the digital platform that they want to advertise their message on. They can track the referrals and leads that they receive. There are email campaigns that can be executed, if digital ad seems a little bit too far of a stretch. There are mailers, there are all types of resources that are available.
It’s such a great point to head us into, to wrapping this up because I do think, as we talk to a lot of advisors about referrals, the experience that gets described to us is, frankly, the experience that anyone should expect if they’re paying any money to an advisor. It is maintenance, to that extent, so I love this idea of a journey is active, and a journey needs a guide. The more that advisors can be supporting that, I think, is really a great thought, and a great question that we all need to ask ourselves.
Well, I absolutely love to read. I love to read different books on business strategy, I love to read different industry publications so that I can have a pulse of what’s going on. But, I also love to read things outside of our business, whether they’re things that happened historically, or things happening now, and really challenge myself to say, “What can we be doing, to bring back this great idea into our business today?”
So Eric, what would you say is the best book that you’ve read in the last month or so, that advisors should think about?
You know, when the pandemic started, my friend here in Omaha, Ron Carson, sent me his book Proven in the Trenches. It just showed up in the mail with a note, and I read it, I loved it, and would encourage all advisors to take some time to read that because it really allows us to see what an opportunity situations like this create.
That’s great, that’s excellent. Well Eric, thank you so much for joining us, there’s a lot of good stuff here. And, we’d love to keep talking, but we have to let our listeners go onto the next thing.
The other thing that we acquired in 2019 was the Orion.com URL. In fact, it was such an exciting acquisition for us, I should have mentioned it earlier.
Oh, so close.
Our website is simply orion.com, O-R-I-O-N.COM. And my email address, should you wish to reach me directly, is just Eric, E-R-I-C@orion.com as well.
Well, that’s wonderful. You’re known for being very open and communicating directly, so I’m sure that’s appreciated. Thanks so much for your time today, appreciate it.
Thank you, Steve, and thank you, Julie.
Hi, it’s Julie again. It was great to have you with us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes, it really does help.