Ep 403: Carving Your Path As An Investment Nerd By Building A Fractional CIO Solution For Other Advisory Firms with Eric Stein

Financial Advisor Success

Michael Kitces

News, Business, Entrepreneurship, Business News

4.8 • 696 Ratings

🗓️ 17 September 2024

⏱️ 90 minutes

🔗️ Recording | iTunes | RSS

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Summary

Eric Stein is a Partner at East Bay Investment Solutions, a firm that offers fractional Chief Investment Officer services, supporting over $6 billion in assets under advisement across 26 advisory firm clients. In this episode, we discuss how Eric leverages his extensive investment expertise not by managing portfolios for individual clients as a traditional financial advisor, but rather by embracing his role as an 'investment nerd' serving as a fractional Chief Investment Officer, supporting multiple advisory firms and their clients.

Listen in as Eric shares how his fractional Chief Investment Officer service operates, providing investment research, portfolio design, and market commentary while leaving portfolio implementation up to the advisor themselves. He also discusses his winding career path, from commercial banking to Goldman Sachs Asset Management and as a CIO for a national RIA, to his current role, which he found after a careful 'dating' process with his business partner to ensure their visions aligned. Eric also reflects on his experiences across large national businesses and smaller firms, emphasizing the importance of role exploration, effective management practices, and learning from both successes and failures to navigate challenges that arise.

For show notes and more visit: https://www.kitces.com/403

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.
0:29.0	Welcome to the 403rd episode of the Financial Advisory Success podcast. My guest in today's podcast is
0:34.5	Eric Stein. Eric is a partner at East Bay Investment Solutions, a firm that provides fractional
0:39.4	chief investment officer services based in Charleston, South Carolina, supporting over
0:44.0	six billion assets under advisement across 26 advisory firms that they serve.
0:49.8	What you think about Eric, though, is how he has chosen not to utilize the investment
0:53.3	expertise he's built throughout his career to gather his own individual clients and manage their portfolios as a traditional financial advisor with investment expertise.
1:01.7	But instead, to really stay focused on being an investment nerd by landing his current role as a partner with East Bay, where he gets to serve as a fractional chief investment officer for multiple advisory firms in all of their clients instead.
1:15.0	In this episode, we talk in depth about how it works when advisory firms hire Eric's
1:20.0	fractional chief investment officer services, including conducting investment research,
1:24.3	designing model portfolios, and producing written market commentaries that
1:27.6	advisors can use with their clients. How Eric's firm differs from the outsourced chief investment
1:33.0	officer, OCIO services that have emerged for institutions, and how a fractional CIO also differs
1:38.7	from a tamp by still leaving the actual portfolio implementation responsibilities up to the advisor,
1:45.1	which allows Eric's firm to charge a flat fee as a fractional CIO instead of a basis point charge, enabling
1:50.5	the firm to serve more mid-sized advisors in a cost-effective manner. And Eric suggested considerations
1:56.4	for advisors considering working with a fractional CIO, including, most importantly, finding
2:01.0	a fit with respect to the firm's investment philosophy.
	...

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