Independent Perspectives: Knowing When It's Time to Move On

Transcript of the video:

Independent perspectives: New views of the RIA model

TRANSCRIPT:

JEFF BLUMENTHAL: I'm Jeff Blumenthal, Managing Director of Business Development at Schwab Advisor Services. Thank you for joining us for our @Home series. I'm joined today by Mike Smith. He's the Founder and Lead Principal of Emerald Advisors in Bellevue, Washington. Hi, Mike. It's great to see you.

MIKE SMITH: Thanks, Jeff, for having me. And it's great to see you as well.

JEFF: You bet. So I'm going to jump right in. You started the firm about not quite two years ago and dug really deep into due diligence. Tell me a little bit about what the impetus was for looking for alternatives to the firm you were at.

MIKE: You know, it did start in 2019, early 2019. My staff and I were counseled from our managers about over-servicing clients, and that was the telltale sign that it was time to move on.

JEFF: Over-serving clients. I thought that was the business we were in. But you dug pretty deep into due diligence. I think you described your firm as a quasi-family office. You're pretty high touch. Is there anything about the model that you find now that allows you to deliver on that goal?

MIKE: There's so much more we can do with, you know, just working more with their accountants, to doing some advanced tax planning for them, or even just working on their estate documents with the clients. So, yes, a lot more high touch, and it is a family office.

JEFF: You had a pretty tight client base and were pretty focused. But one of the things we talked about was the potential for growth after you converted. How has that turned out? Are you able to grow?

MIKE: Yeah, it's great. I would say we've opened 37 new households since we've launched. Probably 50% of assets under management growth as well. Not just from the market, but bringing on new clients. It's been great. I never got this many referrals at my prior firm.

JEFF: Wow. Yeah, it's hard to know sometimes why that is, but I think clients understand that concept of building a business for them and being a fiduciary.

Life changed a little bit after you launched the firm. You had four or five months to launch the business, and then we ended in a global pandemic, and it started four or five miles from your office in Bellevue. You had picked new technology. Tell me a little bit how technology worked, as you had to rotate to working from home for a little while.

MIKE: You know, great observation. We were only four or five months into launch, and we just did our business continuity planning with our legal counsel, so we actually had just ordered brand new laptops for everyone. So it was a little bit challenging at first because we're all new and we're still trying to bring on clients and households. Yet at the same time, it was very… I think it benefited the firm.

JEFF: Interesting. And it sounded like your employees, as a team, were able to focus on clients, manage their schedules, too, and the tech worked as planned.

MIKE: Clients are busy during that same time. They're going through the same stress as we are. And, remember, we had the fastest drawdown in market history during that same timeframe. So we had a lot of things going on during the beginning of that pandemic.

JEFF: Yeah, a pretty intense time. Now that there's a little more stability to market, when you look ahead to the future, what's next?

MIKE: We're going to continue to add staff because we're continuing to grow. We're looking at so many more opportunities to help our clients. We're looking at more hiring for an enrolled agent to a certified public accountant. I'd like to get us certified to be a trust company for our clients, as well. So there's a lot of things that we can do that I could never have done before.

JEFF: Nice to be able to take advantage of that flexibility. It's probably a challenge just figuring out what to tackle first and making the time for it. Well, Mike, pretty amazing what you've been able to do in a very unique market environment. It's been a pleasure working with you. Appreciate you sharing some time and insight into your business and joining us for our @Home series. Mike Smith, Principal of Emerald Advisors. Thanks for your time.

MIKE: Thanks, Jeff.

IMPORTANT INFORMATION:

Information included in this video is intended to be an overview and is subject to change.

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

The above mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. Mention should not be construed as a recommendation, endorsement of, or sponsorship by Schwab. The views expressed are those of the third party and are provided for informational purposes only. Experiences expressed are no guarantee of future performance or success and may not be representative of you or your experience.

Mike Smith is a client of Schwab and was not compensated by Schwab for their comments. The experience described may not be the experience of all clients and is no guarantee of future performance or success.

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