Ep 400: Sizing Up Versus Scaling Up To Build An Enduring Advisory Business with Mark Tibergien

Financial Advisor Success

Michael Kitces

News, Business, Entrepreneurship, Business News

4.8 • 696 Ratings

🗓️ 27 August 2024

⏱️ 90 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mark Tibergien is the former CEO of Pershing Advisor Solutions, a former Principal with Moss Adams Consulting, and a longtime practice management consultant and thought leader in the financial advisory industry. Over his 50-year career in financial services, Mark has witnessed the evolution of the financial advice industry and has actively defined best practices for advisory firms aiming to scale up and build enduring businesses. His extensive experience has enabled him to measure and track the key strategies that help firms not just grow in size, but also enhance their scalability and operational efficiency.

In this episode, Mark shares his insights on the crucial distinction between growing in size and truly scaling an advisory firm, emphasizing that genuine scale is achieved when revenue increases outpace expenses. He also discusses the ongoing industry consolidation and outlines the different types of firms looking to acquire RIAs—financial, tactical, and strategic buyers—highlighting how smaller firms can still thrive by focusing on local excellence or specific client demographics. Listen in to learn about the importance of proactive succession planning and defining personal measures of success, which influence both strategic decisions and the broader impact of the advisory business on the community and the industry.

For show notes and more visit: https://www.kitces.com/400

Transcript

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0:00.0	Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with
0:07.1	financial planner, speaker, and consultant Michael Kitsis to hear stories of how leading
0:12.4	financial advisors navigated the inevitable challenges that arise on the path to success
0:17.4	and get insight from leading industry consultants about how to break through to the next
0:22.2	level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone.
0:29.2	Welcome to the milestone 400th episode of the Financial Advisor's Success podcast. My guest on today's
0:35.2	podcast is Mark DeBershian. Mark is the former CEO of Pershing
0:38.7	Advisor Solutions, a former principal of Moss Adams Consulting, and a longtime practice
0:43.1	management consultant and thought leader in the financial advisory world.
0:47.0	What's unique about Mark, though, is how over the course of a 50-year career in financial
0:50.7	services, he has seen firsthand the evolution of the financial advice business
0:54.7	and has measured, tracked, and through his expertise, has helped to define the best practices
0:59.6	for advisory firms looking to not just size up, but truly scale up to build enduring
1:05.6	advisory businesses.
1:07.5	In this episode, we talk in depth about how Mark views the difference between simply growing in size versus truly gaining scale in an advisory firm,
1:15.5	with scale only occurring when revenues are growing faster than expenses, not just growing in line with rising asset and client headcount growth.
1:23.3	Why Mark thinks that advisory firms need to aim for 30 to 35% operating margins, with a higher
1:29.1	profit margin potentially indicating a lack of reinvestment in the business and a lower
1:33.0	margin, often implying some problem, whether around pricing or client or service mix or team
1:37.7	productivity. And how Mark sees the differences among advisory practices, which revolve around
1:43.1	the founder, versus businesses,
1:45.2	which start to add employees and build processes and procedures for them to follow,
	...

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