Tremaine Wills, a financial advisor and the founder of Mind Over Money, an RIA focused on helping black women attain financial security, didn’t know anyone else who started their own RIA when she founded hers in March of 2020.
It’s a brave thing to do. Often, when a financial advisor starts their own firm, they suddenly become a chief executive, as well as the head of operations, sales, marketing, compliance, customer support, and more.
To navigate her new responsibilities, Wills found and signed up for a coaching program, Carson Coaching, to help her systematize her new business. She also joined four different groups through the National Association of Personal Finance Advisors, or NAPFA, and the XY Planning Network, in which other RIAs were navigating some of the same issues. With that support in place, she found success. “I didn't get my bearings until I started getting coaching from people who have already done this,” Wills told RIA Intel.
But setting oneself, and an RIA, up for success could be easier. To help address gaps in training for new independent RIAs, a longstanding service provider has partnered with a top university on a program to help new managers.
Dynasty Financial Partners, which supports roughly 50 independent RIAs managing an aggregate of $60 billion in assets, and the MIT Sloan School of Management announced Wednesday that they have created a three-day “Advisor to CEO Program.”
“There is a shortage of good guidance, and good coaching, and good training in this area,” said Gordon Ross, director on the relationship management team at Dynasty.
The program is only for the 50 executives at RIAs within the Dynasty network and will take place in May 2022 on MIT’s campus in Cambridge, Massachusetts. Throughout the year, RIAs will also be able to attend CEO-only roundtables focused on topics like holding partners at an RIA accountable, as well as hiring, managing, and firing employees. Participants will also attend interactive fireside chats about leadership, complete self-assessments, and can choose to engage one-on-one coaching.
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The in-person program is capped at 25 chief executives (participants must be vaccinated and wear masks while indoors on campus). Those who cannot attend in person at MIT’s campus can attend and explore virtually using a sort of robot with wheels.
“They can be in the room. They can sit at the table with you. They can participate in the discussions. They can go up to the whiteboard,” Court Chilton, a lecturer and factual director on the project for MIT, said.
RIA CEOs most likely got to their position because they were probably the highest earners within their previous organization, according to Ross.
“The chances are the person who is the CEO of a wealth management firm, probably, maybe hasn't had any kind of professional management experience,” Ross said. “One of the things we hear often from these leaders is that they are constantly looking for any guidance or coaching that they can grasp to help them make that kind of transition.”
The program with MIT is aiming to help close this gap, by bringing together CEOS in person into a hands-on learning environment where they can talk about issues around strategy, technology, people, and culture development.
“[The CEOs] bring their business plans, they bring their marketing plans, we want them to talk about it with each other. We design exercises that are that fit the context that they have,” Chilton said. There will be no case studies; MIT Sloan’s learning approach is focused more on simulations, exercises, and whiteboarding.
It’s a problem that affects many RIAs who go independent.
In 2020, 208 new RIAs filed with the SEC and 423 new RIAs filed with state regulators, according to an October 2021 Assets in Motion report by Schwab. New RIA firms represented nearly 40 percent of the $180 billion asset movement into the RIA industry, according to the report.
Tremaine said programs like Dynasty’s are invaluable to independent RIAs leaders. Dynasty is not the only one hoping to address the gap in education and training.
Programs similar in essence already exist. Charles Schwab has a yearlong, 50-week executive leadership program for management-level advisors intended to prepare the next generation of leaders. Fidelity recently launched a new training program for RIAs, although it is focused on helping them navigate wealth transferred between generations within families.
“What we're seeing is kind of the next evolution of the RIA world,” Gordon said.
“Most of the kind of training industry is still kind of focused on the traditional banking world or things like that. And so, the fact that Dynasty saw this opportunity to really kind of focus in on these kinds of CEOs and what they need, I think, is really kind of us taking it to the next stage,” he said.
Dynasty itself has been sort of training ground for leaders in wealth management. Several Dynasty employees, especially those who have held perhaps one of the most sought-after jobs in wealth management, have rose through the ranks to hold senior positions at Dynasty or other companies.
In 2019, Dynasty moved its headquarters from New York to St. Petersburg, Florida for the ease of transportation to other cities, more affordable real estate, lower taxes, and better quality of life. (At least one employee even said the pizza there is comparable to New York's.) In May, Dynasty said it would start becoming a minority investor in RIAs.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.