Seven Questions with Tony Sirianni: Cetera Financial Group’s Richard Whitworth
Why did you get into the wealth management business?
- I always had a penchant for wealth management & investing, with fond memories of my grandfather’s long tenure as Vice Chairman & Director of a community bank in central New Jersey and spending time with him in various branches. My entire family is in either public or private education, so from a young age I understood the value of saving and being prudent with money, as well as the personal reward that comes from a career in service. I wanted to apply that service mentality to the wealth management profession with a focus more on Main Street than Wall Street.
- I initially wanted to work more in the portfolio management/investment management space. I began my career in 1999 at the height of the Dot Com Era, working at an investment research company called I/B/E/S International, where I researched & tracked publicly-traded Mediterranean companies to build consensus earnings estimates.
- As I started working more directly with wealth managers, I developed a passion for helping them on practice & business management vs. investment management issues. I recognized that properly structuring & operating a wealth management firm gave advisors the freedom to concentrate on their highest-valued work – helping their clients achieve financial independence & wellness. I’ve built Cetera’s Business Consulting & Practice Management offering to reflect that belief and to empower advisors as owners of professional services firms.
In looking at the changes over the last 15 years, which, in your opinion, have been the most damaging to the wealth management business? Conversely, what have been the most exciting and positive?
In my opinion, the same change has both been damaging as well as exciting & positive – the rise of mass information has led to the democratization of the wealth management profession
- Positive/Exciting – today, people have access to a multitude of real-time information which has led to more pricing transparency, the ability to shop for and compare services & providers more easily (regardless of geographic proximity), and the ability to perform due diligence on vendors/firms all at the touch of a few buttons. In doing so the consuming public has become less beholden to institutional voices, more informed and outcome-conscious, and ultimately more demanding of high-quality solutions.
- Damaging – Despite the upside of mass information, it has also partially degraded the value of professional experience & knowledge. Without there being a standard bearer of truth & authority, so-called ‘pundits’ have filled the void and in doing so unintentionally has caused more confusion than clarity. Bloggers & Influencers can rule the day versus people who have long studied and followed markets professionally. For instance, does a stay at home day trader really understand the small cap Chinese market if he or she has neither ever traveled to Mainland nor obtained a CFA to properly analyze financial statements? In addition, the concept of “analysis paralysis” potentially creeps in with the public not understanding how to drive through mass information clutter to find clarity.
How has technology advanced this industry?
- Cost of Investment Management – the advent of ETFs and other low-cost investment solutions, as well as financial planning services, has given the opportunity for more retail investors to participate in the capital markets.
- Scalability of the Wealth Management Firms – technology has allowed advisors to scale their business without adding a 1:1 direct human capital expense. For example, social media marketing allows advisors to reach a larger audience than traditional marketing methods would allow. Likewise, systematizing the client service & account management functions by using a CRM system gives advisory firms additional lift without the requisite client service manager/associate cost.
- Enhanced Business Intelligence – the rise of Big Data/AI/analytics provides advisors with much more insights about their operations and clients than ever previously available. While sometimes overwhelming, the proper use of data can help advisors manage their businesses more efficiently and uncover latent business development opportunities within an existing book.
How has your company adapted to address the rapidly changing wealth management landscape?
- Embracing innovative technology – Cetera has done an admirable job in building a future-state technology stack. As integrations between tech vendors become more ubiquitous & commoditized, there will be a premium placed on financial services firms building or finding the “next new thing.” Our Decipher technology is an example of this innovation. Through its emotional recognition technology, Decipher® helps our advisors become “behavioral finance analysts” without a PhD and uncover a client’s financial beliefs and thinking styles. Moreover, the technology also has application internally within an advisor’s office. If the whole staff goes through the Decipher experience, the principal will have a better idea of how team members think and can therefore better align roles & responsibilities (EX: someone who’s a future & more abstract thinker probably isn’t going to be a good processor, which is more of a past or present thinker mindset.)
- Changing the advice delivery model – with our Advice-Centric Experience® and its associated tools & resources, we are evolving the advice dynamic to one in which advisors are paid for their time, knowledge & services rather than the investments they choose on a client’s behalf. For instance, our new Fee for Service program decouples asset management from advice and gives advisors a chance to provide more comprehensive services while also created recurring revenue streams that aren’t correlated to market performance.
What part of the advisor business will never change?
- Human Relationships & Emotional Intelligence – technology can help advisors manage their businesses more efficiently and invest more economically, but the deep personal relationships built over decades of service to clients can never be automated. When the client’s moment of true need arrives, the advisor’s true value shines brightest. No one has ever cried on an avatar’s shoulder.
What three things differentiate your company from the competition?
- Voice of the Advisor Helps Drive & Inform Corporate Strategy – with our network-wide Advisor Engagement Council and Enterprise Action Committees, as well as our broker-dealer advisory councils, Cetera constantly listens to the voice of our advisors as we build our go-forward strategy. Decisions that impact advisors aren’t made in a vacuum. Instead, advisors’ viewpoints inform our thinking. And, in many instances, they can help co-design solutions with us for the benefit of all advisors. Though this work, we try to drive real alignment with our advisors.
- Unique Advisor Cultures within Large Enterprise – Cetera’s affiliation & distribution models across five distinct broker-dealers gives us with the flexibility to provide a destination & home for advisors regardless of how they choose to operate and manage their business. This multi-brand structure also allows us to create unique advisor cultures that provide close-nit communities supported by the scale of a large organization.
- “Partnership in Growth” with Our Advisors – at our core, Cetera exists to help our advisors envision their ideal firm and then successfully execute against that goal. We view the advisor as a CEO and build solutions that help them manage their firms objectively & strategically. Be it through our Advisor Growth Loan program (provides capital to advisors for growth-related initiatives) or Wealth Management University (industry-accredited designation curricula), we empower advisors to become better business managers and financial professionals.
What advice would you give to someone just entering the wealth management business?
- Having recently spoken to the Financial Planning Program at my undergraduate alma mater (University of Delaware), I was struck by a few things:
- Multiple Entry Points / Non-Linear Career Paths of the Profession – historically, there were only a few entry points to the Profession (advisor training programs, rotational analyst programs, etc). With the advent of the FinTech space and the overall push for greater financial literacy, there are many more ways to enter the profession than previously available.
- Leverage Your Skill Set – new entrants aren’t without skills, it’s merely incumbent upon the advisor/leader/principal to identify and draw them out. New entrants should promote the complimentary skills they bring to the advisory table that more tenured advisors may lack – social media/communication skills, technical skills, business & financial management skills, etc. If a tenured advisor can mentor a new entrant on sales & client management skills while learning more ‘new age’ skills from a younger professional, the combined power of the organization is amplified.
- Progress from the Back to Middle to Front Office – the best leaders understand the nuts & bolts of how their organization operates. Selling & client engagement is “easy” (relatively). First learn how accounts transfer, money moves, investments are allocated & traded – then, use that knowledge during the client engagement & relationship management process. It demonstrates both awareness and empathy.
What are your interests and hobbies outside of your day job?
- With three children 6yrs and under (6yr old girl, 3 1/2yr old boy, 2yr old girl) – aptly nicknamed “Destruction, Terror & Chaos” – most of my free time is consumed with (poorly) wrangling my progeny.
- When I do have time, my biggest interests are:
- Surfing – I love being in the ocean & challenging myself in good surf
- Baseball – I’m a lifelong baseball & softball player and Yankees fan
- Cooking – spending time with my family in the kitchen & introducing my children to new cuisines is really exciting & rewarding
- Travel – I’ve visited 35 countries thus far, beginning with Spain when I was 18yrs old. My favorite thing is to “spin the globe” and find someplace new & far afield to visit. There is much world to see in one lifetime.
Richard is a panelist at AdvisorHub’s November 19th Industry in Transition Summit in NYC — Learn more.