Seven Questions with Tony Sirianni: LPL Financial’s Marc Cohen
AdvisorHub’s Publisher & CEO — Tony Sirianni — asked executives from top firms their thoughts on the wealth management industry. Here is how Marc Cohen, Senior Vice President at LPL Financial responded.
Why did you get into the wealth management business?
When I got my first car in high school, I needed gas money so I searched for an after school job. While friends were working in retail and restaurants, I was looking forward to the opportunity to learn more about the business world. I got a job at a small consulting firm that served investment advisers to do some basic clerical work—phones, mail, filing, etc. The rest is history.
I grew up in and around small businesses, most notably my father’s advertising business. I believe in the power of small businesses and the opportunity of the American Dream. At the time when I was introduced to the RIA space, it was just starting to accelerate. I saw so many career employees willing to leave the comforts of corporate America to start their own businesses, and I was thrilled by the opportunity to support their success.
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?
Without hesitation, the most exciting development has been advisors’ increasing flight to independence and the growth in this space. It’s exciting to watch the symbiotic cycle of opportunity that exists between advisors and service providers. As more advisors move to the independent practice, more service providers have emerged to support the market, which in turn has enabled more advisors to make the move, and so on. The cottage industry that has emerged in this corner of financial services has driven incredible innovation through dynamic and collegial efforts, which has not only impacted independent advisors but also transformed the trajectory of wealth management more broadly.
The other major change is investors’ increased focus on the importance of trust and transparency, as an outcome of the last financial crisis. That was brought into greater focus with the mainstream coverage of the DOL Rule and the increasing awareness of an advisor’s legal standard of care. There may be some confusion around “Best Interest Standard” versus “Fiduciary Standard.” But ultimately, investment advisors benefit by being able to leverage their unique fiduciary relationship to differentiate their business and aid in their growth.
How has technology advanced this industry?
Similar to what we talked about earlier, the rapid innovation in our industry has led to the emergence of countless new tools and service providers to drive efficiency and customization into an advisor’s business. However, with so much choice also comes challenges. Advisors suffer from paralysis by analysis given the number of options available. Yet, for firms with a vision and appropriate resourcing, this presents a new opportunity to be able to change the expectations of what technology can do to propel efficiency and growth in an advisor’s practice.
There is no lack of access to tools and solutions. The benefits of automation and integration can’t be understated. But, more importantly, meaningful integration is necessary to be able to realize the full benefits that technology can deliver in your business. You need your proposal generation tool to talk to your CRM to talk to your financial planning application and so on. And by this, I mean bi-directional data and workflow-based integration – not simply single-sign-on. When technology eliminates significant time from your day, you start to find more capacity to be able to grow your business.
How has your company adapted to address the rapidly changing wealth management landscape?
First, we’ve been clearly focused on what our clients need. Our mission is to take care of our advisors so they can take care of their clients. It’s our north star, so it’s easy to know where to head when you understand the needs of your customer. We have an ability to then deliver on those needs by leveraging our financial strength to invest in the technology, business solutions and resources that bring value to our clients. Finally, we are committed to meeting advisors where they’re at and have a culture that supports our ability to deliver on that commitment. That takes strategic agility, the ability to be innovative and a team with the expertise and desire to be able to lead our firm and our advisors forward.
What part of the advisor business will never change?
The relationships. As we saw a few years ago with heightened concerns that robo advisors would disrupt the industry, we were reminded of the importance of the human emotional intelligence that informs so much of our interpersonal relationships, which are at the core of our business. It’s the art of developing and maintaining those genuine, deep relationships that the most successful advisors have mastered. Humans can navigate risk and hopes and fears and goals unlike any machine. And that will never change.
What three things differentiate your company from the competition?
The first goes back to our mission statement, which is to take care of our advisors so they can take care of their clients. We are an exclusively advisor-centric business and do not compete in the retail market. The advisors are our clients. And we are solely focused on our clients’ ability to thrive, and we can leverage our scale and financial strength in ways that result in value for their business.
Second, and something I think is often overlooked, is our ability to be so much more than a broker-dealer. LPL serves as a custodian, RIA (to fully outsource compliance and risk management), technology provider and practice-level support partner, providing hands-on financial management, marketing, technology and administrative resources to help advisors run their small businesses. There is power in having choice among the different roles we play. But the differentiating power is the integration we can provide across platforms and services.
Third, in addition to the choice advisors have in how they can leverage our capabilities most effectively for their business, advisors have full choice in how they operate their own business—with the comfort of knowing LPL is a partner for the full journey. Whether that means leveraging our integrated corporate RIA or running their own RIA, managing a hybrid book of advisory and brokerage business or a fee-only business, insourcing critical functions or outsourcing critical functions – LPL is proud to stand alongside the country’s leading advisors as a partner through the full evolution of their business.
What advice would you give to someone just entering the wealth management business?
Enjoy the ride. This is a fast-moving industry, with highly demanding clients given the incredibly personal nature of the business. So, absorb as much as you can – never stop learning and adapting – and keep your eyes open for unique opportunities.
What are your interests and hobbies outside of your day job?
As a recent transplant to Southern California from the New York area, I spend a lot of time exploring with my wife and two-year-old son … and we eat a lot of tacos. Aside from that, I’m an avid sports fan and enjoy exploring new cultures through travel.