Animal Spirits Podcast - Talk Your Book: Advisor Best Practices

Episode Date: June 26, 2023

On today's show, Michael and Ben are joined by Chris Shuba, founder and CEO of Helios to discuss: ETFs vs. direct indexing, why differentiation matters for advisors, utilizing content to drive business, where the wealth management business goes from here, and much more!    Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Helios. Go to heliosdriven.com. If you're an advisor who wants to learn how to grow your business and differentiate from other firms, again, that's heliosdriven.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael a couple weeks ago, Duncan, our producer, was saying, you know, I know you guys love talking about the markets,

but you rarely mention the fact they actually work for wealth management firm. And I think that's because we do have a big advice. audience, I think, but some of that stuff is maybe more interesting to us in that advisor world than some of the rest of our audience. But, you know, obviously, we're in this every day. We've, we've gone from a tiny firm to a, what are we calling ourselves now? Mid-sized? Decent size? Upper-middle-class firm? Yeah. I mean, we were, we were like a startup when I joined. You were probably like a series A when you joined. I don't want to sell ourselves short. I would say we're first class. But just in terms of if you're, if you're

just measuring on size. Yes. Which are certainly not the only measurement. So we love talking about this stuff because we're in it day to day. So we had a great conversation with Chris Schubert from Helios who's been on before, just about like the state of the advisory business, how they help advisors, but just like, and also where things are going because we are at an interesting point where things are getting to become commodities. Information is becoming a commodity. Portfolies are becoming a commodity. All these things. that we kind of took for granted, not being able to do in the past, that things are becoming different. And I think that it's making changes to the advisor world. So this was a really good talk

with Chris. Anything else to add for you? We got nothing else. That was great. Let's do it. All right. Here's Chris Schuba from Helios. We're joined today by Chris Schuba. Chris is the founder and CEO of Helios. All right. I'm excited for this talk today. It's one that I don't think we've done before. We're going to get all into best practices for advisors, top to bottom, side to side. We're going to get in there. But before we do that, I want, Chris, for you to reintroduce yourself to the audience.

Who is Helios? And why are you well suited to talk about best practices for financial advisors? Sure. So Helios is a insourced CIO. And we kind of play off of the idea of an outsourced CIO, which is pretty common. But no one really knows what any of that is. It's kind of like saying multi-factor, multi-strategy or something of that nature. So at Helios, we are like having an entire investment department kind of magically appear at your fingertips.

So we handle all the holdings analytics, the model creation that's customized to the practice, portfolio analytics, compliance documentation, client communications, and all the training and education that would go with it. So everything in investment department does, that's what we do. And what makes us a little bit different is that we handle all. all of the customization soup to nuts, which is what we think about from an insourcing perspective as well as everything's white label to the practice. So overall, that's our definition of insource CIO, I guess. Chris, I have a question about the difference between white label, customizable versus model portfolios. I see a stat thrown out that advisors want to advise for the most part. I want to say advise. I mean, advise on everything, not just the asset management, a lot of which

they want to give to model portfolio companies, which you could effectively get for free these days. BlackRock puts it out. Everybody has one that you have access to, and it gives the advisor the ability to really focus on the planning and the stuff that, I hesitate to say moves the needle, but the personal stuff, the good stuff. When you talk about the customization that you do for your clients, are you lumped in with like the model portfolio growth and or what's between that or versus like an outsource or in-sourced CIO? Sure. So I think when we typically hear about the idea of an outsource CIO, oftentimes what comes

to mind is models, right? You can get models in lots of different places. In fact, it's fairly commoditized at this point. You can get them for free on the internet. You can get them free from a BlackRock. You can get them from your broker dealer. And that assumes that if the goal is that you just need models, that you can get them pretty easily.

And that's true. You really don't need some. something like a Helios if that is really the pure need that's there. If you want a true asset management experience for the client, if you want to reduce your overall workload, if you want to look good in front of your client, if you want to drive more profitability of the practice, it's much more complicated than just models. And that's really where this idea of an insource CIO comes into play. So as an example, I might get a model from BlackRock.

Well, now I have to do all my holdings analytics, assuming that you're not going to just use purely BlackRock stuff, which might be a conference. I have to do all my portfolio analytics. I have to do my training education. I have to do my client communications. There's still a lot of work on my plate that has to get done if I just import the models. At Helios, we're trying to free up advisors to focus on their highest and best use and let all that nitty-gritty fall on to us. So top practices that we see, the ones that really drive profitability, the ones that really drive growth, they're much more focused on an asset management experience and models are part of that, not just the pure model. So I think that's the big

differentiation for me is just the amount of work the advisor is doing. So one of the oldest personal finance pieces of wisdom that people always say is, you know, worry about yourself, don't worry about what other people are doing, benchmark to your past self, these sorts of thing, focus on what you can control. I'm sure similar advice would pertain to the advisor space, but, you know, financial advisors are competitive people. I think that comes with being in the finance world and being well educated and all that stuff. So I think a lot of advisors maybe feel like they're on an island and they know what they do and they know best practice. Maybe they hear some horror stories from certain clients that come to them of other

advisors. But I guess for the most part, unless you have a really good network, it's hard to understand what other advisors are doing out there in terms of best practices. So we thought it would be good to talk about some of that today. So maybe you could just kind of talk about, you know, how many advisors you've interacted with over the years and then some of the things that are coming up today in terms of best practices? Good question. Yeah, it's hard to boil it down. I will say that there are three primary lenses that the top practices by measure of growth, by measure of profitability, tend to really focus on.

The first one, I think, is pretty obvious, and that is that they are very, very focused on kind of creating a world-class client experience, but not just from the angle of financial planning, from the angle also of asset management, from tax planning. They're kind of maniacal about making sure that every interaction point they have is wrapped up in an experience that's based on process. We all know that you can't have consistent outcomes without a consistent process. So they're very, very process-oriented. Second one that we tend to find is that they are very focused on highest and best use. So every person in their practice has their highest and best use to the firm, and they want their workload to be directly pertained to that. The ones that, the practices we tend

to see that are struggled are folks that are pulled in a jillion different directions. They might be good at all the things that they do, but it's not their highest and best use to do all of it. And so that's really where the concept of insourcing really plays out, is how do you get rid of the stuff that's not your highest and best use? Top performing practices that grow, do that very, very well. And the last one is, is that, The practices that tend to, again, have those characteristics of profitability and growth are the ones that are very focused on that idea of profitability. How are you vertically integrating your practice so that you're capturing as much of the overall aggregate revenue as possible? How are you cutting your internal expenses so that you are maximizing that bottom line?

How do you think about the different solutions and products that you offer as that relates to ancillary business opportunity? especially in the RAA space. They're very, very specific and focused on those things. And that's part of the reason, again, why insourcing makes sense. If you can have an entire investment department for a fraction of the cost of what a staff person could do, why not do that, right? So those three major bubbles of focus are what we consistently see, and some of them are more emphasized than others.

But those are it. Pretty easy, but hard to do. Within those three areas of success, do you find that, you find that, you know, you find that, there is a correlation between, you said best use, or maybe I'm butchering, but something to that effect, do you find the correlation between most successful and scale, or is there, you know, a range of mid-size, smaller companies are able to really do that effectively, like be laser focused? Like, where do you think the sweet spot is if I had to pin you down? So I've seen really, really well-won smaller advisors, and I've seen really really.

really, really well-run big ones and everything else in between and vice versa. It's really personal. So you say, sorry to cut him, but no correlation. If there was a scatterplot between size and however we define success, you would say it's sort of a shotgun? In my opinion, yes. And because it all comes down to leadership. Where practices tend to get very inefficient is when there isn't a clear leadership structure. And to be completely honest, we've seen a lot more of that lately as the aggregator model has

flourished, where it's a bunch of chiefs, right, as opposed to one set of command and control, the biggest compliance messes we've seen are there. The most variance in client experience is there. It's harder to build a brand that way. And so while there might be cool economics that can come with it, it's a linear set of problems. So problem number one is growth. How do you achieve that? So either you're doing it organically through your client experience or you're acquiring practices. And then that leads to scale problems. The more you grow and the faster you grow, the more you need scale. Where does that come from? And are you doing it in advance of that growth, or are you doing it after you've already had the growing pains? Now you have growth and scale,

but that means you have more people. So now all the compliance, all the communications, how you want to drive your brand becomes more and more important because more and more people are depending on it. So there is a linear set of problems that as you get bigger, to be there. But a lot of them get neglected. We all make do with what we do. It all comes down to the leadership strategy and how that gets executed that, to me, can be great leaders in small or large, and there can be cruddy leaders in small and large, and that's just how we've interacted with it from our seat. Okay. So you kind of got into this, but that was going to be my next question, which you kind of led into, is how does the client experience actually look different between a $50 million

dollar RIA with three employees versus a multi-billion dollar RIA that has dozens or hundreds of employees. How does that change for the client experience? Sure. So when we think about that question particularly, it's kind of our goal to make those the same. So traditionally speaking, when I see a smaller practice, the client experience is much more about financial advice and the service that the advisor is presenting. And because doing asset management in a truly unique and kind of deep client experience way is so much work and energy, I see less of that, generally speaking, in smaller practices. And again, I mean smaller by the number of people, not necessarily by the amount of AUM. As a team gets bigger and bigger and bigger and bigger and they can add more

resources, you start to see some of the really cool things related to client experience. This is things like content, better social media concepts that are coming into play, a deeper bench of knowledge that the advisors have ready to go that when a client calls in, they can either pull up immediately or have as talking points. But more specifically, the ability to really dial in how a portfolio and a model behaves on a day-to-day basis. So when you think about customized models, as an example, models should have an archetype. They should have a plan behind them that is based on its activity that should lead to outcomes over time. So if I have a model that's built upon a series of algorithms, right, one based on just, you know, analyzing various trends and maybe one based on analyzing the broad spectrum of the economy.

And the client understands that this is going to be risk sensitive. As risks emerge in the economy, as risks emerge in the way that the market is behaving, it'll downshift or up. upshift and a certain amount of equity exposure and things of that nature. Now the advisor can essentially sell an experience a day-to-day way of knowing how a model is going to behave that's very specific to what that client is looking for. Normally, advisors can't spend that time. They can't treat each client from an asset management perspective as if it's that only client. And that's what a model does. A model is a service. It is a C. series of activities that are done every day or, you know, every, you know, two weeks or whatever

the time frame is to create a very custom, very specific experience to a client. That is not what modern portfolio theory is, right? Modern portfolio theory is, hey, let it ride, rebalance, you know, somewhat infrequently. So hopefully that makes sense. It's a big complex topic, but that's the, that's the gist of customization and growing practices that land a lot of prospects, that drive higher revenue, custom models that they can really show a different experience to are generally at the center point of that. Chris, when you're talking to advisors, are you only doing the asset management piece of it? And the reason why I asked is because I was about to ask you about some of the technology

that advisors are using. Would you, is that an appropriate question for you to get into or is that not really your wheelhouse? Sure. So we have our own technology called Helios Tools that organizes our relationship. We kind of feel in a certain sense that advisors are a little bit on technology overload. Sometimes when we bring up the idea of Helios tools, like, oh my gosh, do I have to learn another software program? And so our usage of technology is that it organizes our relationship.

We kind of think of ourselves as a technology-enabled service like Uber, right? Uber kind of organizes connecting you and a driver, but at the end of the day, the driver is to pick you up and take you somewhere, right? And we think of ourselves the same way. So we use technology as a way to be our Grand Central Station so that, you know, we cover, you know, research and analytics on about 27,000 mutual funds and ETFs. You have a question about ticker. You type it in. The answer is there. It's not an analytics platform. It's not something you have to use to draw a bunch of lines and charts. Our answer is there. Just like if you asked your investment department, tell me what you think about this ticker, there's an answer with all the compliance documentation to back it up. So technology is very valuable to us. It's just not something that we have. we don't we don't consider ourselves to be a pure technology play so where I was going with that is do you think that there are major differences between smaller and larger RAs in terms of their tech stack or do you think there's pretty standard you've got your Orion adipar black diamond

whatever you're using then you've got Salesforce or Redtail or whatever you're using there and then you've got your portfolio analytics morning star wide charts whoever whoever like are you seeing a ton of variation and how does that change as you go as you get bigger. Yeah, I mean, I don't personally see a ton in the conversations that we have. But again, we generally are going when we are talking to a larger firm, it's usually a larger firm that has combined itself along the way with other firms. And they brought in different cultures. And they have not organized all of that. And we become that organization structure for the larger teams. The ones that have grown more organically or more purposefully, we don't typically get that opportunity for those

conversations. So we oftentimes represent an aspirational way of taking asset management, how it's always been done, almost as an afterthought to the financial planning world and turning into something that showcases all the capabilities of an advisory practice. I truly do see it that way. I think that back in the day, there was the idea of, you know, we're all brokers and And we're all about picking stocks. And then that world evolved into financial planning. We're all the service and capability and deliverables related to financial planning became the headwater for a lot of, a lot of advisors.

But asset management was just something that got done. I mean, I can't tell you how many times I hear advisors say, I don't like asset management. I don't do it. I do financial planning or I do something along those lines. We're, you know, that disruptive force in the industry right now that says, no, you can have a world class client experience when it comes to asset management. And you can have all that awesomeness that's similar to financial planning around asset management. But it does require a shift in thinking.

It does require a way of valuing that. And what we found is that practices that do grow faster are far more profitable. They have a differentiation that really speaks to the heart of, I think, what many clients, especially upmarket clients, are looking for. That makes sense what you said about people. I just want to focus on financial planning. And this is, you know, I came up. I'm a CFP.

That's a lot of the advisors. that we talk to that say I would rather have someone else handle that investment piece for me. Does that require a lot of upfront lifting on your part to get people on the same page so they understand your models and how they work and how they can use those to set expectations for the financial plan? We do focus a lot on training and education. We want advisors to have confidence in the decisions they're making for their clients. And confidence only comes through a bit of education. So we do take a couple of weeks to definitely get our advisors trained up and then we walk alongside them for as long as it takes. But because everything we do is custom, they have a

deep belief structure in why the models are doing what they're doing, right? Even when they're going through a period of underperformance, everything will underperform at some point in time. But by using different models made up of different math through different parts of the portfolio, you know, we want people to be to be feeling like they're always apologizing for something, but never apologizing for everything. And I think that's the big problem that a lot of advisors run into if they're using one set of math all the time. I hope that makes sense. So, Chris, I saw a stat today that ETFs hit a record high

in terms of the amount of money inside of them. Are you seeing a trend towards customization? What's next after the ETF, or is that the be all end all? Is that going to be the king for a while? I think ETFs are the easiest. You know, there's a lot of conversation around direct indexing and things of that nature and from a tax perspective, you know, I've seen lots of different conversations, but to me, at the end of the day, you know, what, what someone's doing when they want

direct indexing is they want differentiation, right? I think there's a certain amount of the advisor segment that's seeking, how do I do something a little bit differently, how do I tell a different story? And we've often been called direct indexing for models in a weird way, as opposed for, you know, because of our customization capabilities. But no, I think that, the ETF is a great chassis because it's low cost and it gives the exposures that folks are looking for. So I'm pro-ETF. You know, Ben, to your question earlier about how do we transport an advisor from what they're doing now to where they're going? Because we're agnostic to the holdings that are underneath, we generally speaking will build their new investment models out of their

old investment models. So we'll do our analysis on all their underlying holdings, build the compliance documentation under those holdings, and then reconstruct the existing holding set into the new model so that it feels much more like an upgrade or a rebalance for their clients instead of a wholesale shift. And a lot of times we're using ETFs to get that done, especially from the NTF lists. A lot of times advisors have a hard time getting certain clients to buy into their investment philosophy. How do you deal with the case where you have an advisor having a hard time buying into any of your models? Do you find that there are times where there's just not a fit there with your advisor or how do you handle a situation like that? Generally speaking, when we first meet an

advisor because we have so much math that we can customize, we don't have a really hard time getting them to buy in unless they're coming in with a very, very deep philosophy that is there part of their sense of self. A lot of the slower growing advisors see themselves as an asset manager and that's where they feel they add a lot of value, which is totally cool. But you only have so much time in the day. And if you're a rainmaker advisor and you're spending a bunch of time picking out stocks, that's cool. You might have great returns and you may be amazing at it, but as far as being an advisor and growing your book and managing, you need to spend your time on what your highest and best use is. So sometimes you run into a little bit of that.

We try our best to replicate their thought process. Where we typically run into advisors that tend to become unhappy is every model at some point in time is going to go through a period of underperformance. If you're bought into its decision-making process along the way, you're much more likely to ride through that. But sometimes you lose your confidence. And then we, you know, we work as a team to get past that. But that's real life. Chris, in terms of the most successful advisors that you work with, and to me, I would define that not necessarily, in fact, definitely not, the one that has the most assets. When I say successful, I mean a great culture where people love to work, where they have great systems, happy clients, growth, profitability, all of those

sort of things. And thinking about those firms, is it, is it companies that say we want to be, we want to have a differentiation and maybe we're selling something that the traditional or the typical R8 doesn't have access to? And that could be anything. Or is it more likely that the ones that are having the most success do what needs to be done very, very effectively and might not necessarily have all of the services or all the bells and whistles, but they do what they do really well. How important is differentiation? That's a really good question. Can I give you my answer and just to tee you up? Yeah. My opinion is that it's overrated, right? Like, oh, why would this client work with me instead of the advisor down the street? If that's your focus, you're going to have

trouble. I think that the firms that I'm describing would fall into the camp of they do what they do really, really well. And not that they're not concerned with the other RAs, but they're worried about their own business and just managing the relationship and delivering the best advice possible for the value that they're delivering. Right. Yeah, I mean, I've seen very, very successful practices to do one thing very, very well and do everything else poorly, but they're successful because they've got the client base that values what they value to, right? When I talk about differentiation, I'm going to disagree with you a tiny bit, but I see it from a little bit of a different angle. If you have a really good advisor who's a rainmaker,

they're going to be successful no matter what they do because they're a really good advisor that's a rainmaker. They don't need to differentiate. And I'm sure in your role, you talk to a lot of rainmaker advisors. But when you talk about a growing practice, it's full of advisors that are not rainmakers that are not awesome. They're learning. They're growing. And they need differentiation. They've got to go up against a rainmaker advisor and take that business somehow. That's why Helios is so valuable. If you go up, if you have the Black Rock models or the broker dealer models and you give it to an advisor who's got a few years in the business trying to grow their book, you are basically killing them.

Yeah. Because every advisor tells the financial planning story. Everyone talks about their service. The one opportunity you really have to articulate differentiation in our industry is on the asset management side because so many advisors neglected. Yeah. I'm glad you broke it down that way in terms of where differentiation matters. You're right.

And I guess I take for granted the fact that we do a lot of. content, obviously. And that's for the most part, in fact, for the whole part, where our clients find us is they watch us, they listen, whatever. They're interested in what we have to say, and we align. And then they speak to one of our advisors to see if there's a fit. And speaking of that, you mentioned brand a lot a couple times earlier in the show. This might sound ridiculous, but I think, I don't think brand is overrated necessarily, but I think a lot of advice that I talk to put too much emphasis on content. And maybe that's through my own months because they're talking to us and they're curious how we do content. The companies that you're

talking to that have had success as I defined it earlier, how many of them are relying on content versus other channels to get business? The ones that we see that are very successful that grow rapidly are very brand heavy for two different reasons. Number one is it helps them articulate who they are and what they do when they're acquiring other practices. They seem to acquire practices better than others because they're able to put a stake in the ground. This is how we do things. This is our reputation and so on and so forth. We also notice that whenever advisors are very heavy into their brand, they're able to attract simply more prospect opportunities.

They're able to drive more referrals because they have talking points that are general or that are very specific to how they're going to manage money. and when that resonates, it resonates. Content for me is nothing more than how you reinforce your stake in the ground. So if I put myself out as someone who makes decisions that are fact-based, we stick to our guns, we know exactly what the goods and bads are, we communicate that to our clients, and then we're reinforcing that through cool research that comes out on social media or emails that we send out that reinforce what we promised we would do, now I'm making this big transformation. And the big transformation, you know, if you look at the five characteristics of

difference or of what we see being the big high performing factors, number one, they're focused on their highest and best use. Everybody focuses on what they do best and they outsource anything that they're not really good at. Number two, they're relentless about the differentiation for everything we talked about. Number two, they're focused on how do you maximize profit through combinations of new revenue and scale internally. Number four, they don't cut corners through the asset management process, meaning they're not cutting corners on their compliance documentation. They're not cutting corners on how they review and analyze mutual funds, ETFs, individual stocks.

But all of that gets to number five, and that is that the best practices that we've run across understand that you cannot create consistent outcomes without consistent processes. And all of those things, focusing on your high standards. and best use, differentiating yourself, creating new revenue and driving scale, not cutting corners throughout the entire asset management experiences, all process, process, process, process. And when teams fall into those processes, a culture gets built around it, the feeds on itself. So I guess to ask Michael's question a different format, those advisors who don't utilize content to build a brand, culture is kind of their brand, right? Culture is the thing that, like, they have a

consistent culture in the way that they do things and their processes, and that's the differentiating factor, right? Well, and content oftentimes creates a lot of scale. So if I have a client that would otherwise call me and eat up an hour of my time, can I solve that with content? How am I out there letting all of my clients know if I've got a thousand of them that I'm thinking about the things that you're seeing on the news? That's content. So, Chris, we've said that a lot that, like, if you want to do content to broadcast to all of your clients on a really scary day or whatever, that's a great use of content. Speak to 100 people at once instead of having a hundred different phone calls about the bank runs, for example. That's a great way to use content.

But it's very unlikely. We've been doing this a long time. It's very unlikely that you're going to write a blog post, do a podcast, and a client's going to, or a prospective client is going to call you and say, oh, my God, I saw what you wrote, take my money. It doesn't work like that. So I guess what I would ask you is, can you, how do people build successful brands without using content? Or do you have to use content to build the brand? Hmm. Well, you're going to know a lot more about content than I will give in your role.

I can just tell you what we've seen from the content that we generate that our advisors will repurpose. But a lot of our advisors want to put a stake in the ground when they work with us around a fact-based decision-making process, and they use content to reinforce the facts that they're seeing. They're using that as a show of force. They're using that as a way to articulate what matters to them, because that's what we're feeding them. So it's a brand that they live, and it's a brand that their clients see. But we've also learned that as clients or as advisors go up market, that the prospecting is harder and that you are going to see your social media accounts

get reviewed by a CPA that's maybe looking for a new advisor for a high net worth individual. Or a high net worth individual is smart. They do research. They want to see that you're out there, that you're putting out things that resonate with them, but they might not want to sit down and have a meeting with you yet. So just like any other form of marketing brand, branding and content is kind of part of that. But the most important thing that I feel exists about a brand is it's your identity. It's how you go to market.

It's how you drive referrals from your. existing prospects. That's how it's more of your swagger than anything else. And most advisors when it comes to asset management, I think feel like they struggle there. But content is the expression of your brand in a public space to me. I'm not a brand expert. But you got to live that brand first. Where do you see where do you see RAs getting into trouble? You can take this any direction you want to go. Okay. Where do I see RAs getting into trouble? Something earlier is there's so many shiny objects in the RIA space, there's so many technologies or so many where you could go. And I think that to piggyback in the last conversation is you kind of lose

yourself in that a little bit. What we know about successful RIAs are those that that that pick their lane and focus on doing that lane in a world-class level, whatever world-class means to them. And generally speaking, that's going to be the financial planning road and it's going to be the asset management road. And then once those are done at a world-class level, then you can branch out. You can bring in those new technologies. You can build your own structured products if you want and all those kind of things. But it's just time and energy to get that done. The biggest problem that I've seen from a lot of, you know, breakaways is they get in the RAA space that their kids in a candy store and then two years goes by and all of a sudden they're like, holy cow, we just need

to re-center ourselves. I see that a lot. And the manifestation of that is that a lot of these RIAs than just end up selling themselves to larger RAs, this whole gobble up culture has existed. They get there and then they're even more unhappy, right? Not to say that some of these bigger aggregators aren't great spots. I mean, some of them are. But at the end of the day, we've got this big rotation going on that I don't necessarily think is healthy. Our job is to take those RAs, you know, as an example that want to be the master of the domain, they don't want to have to roll up and give them the resources they otherwise would have given in a big roll-up scenario. So that's where a lot of our advisors sit is, you know, how do we help them maintain

their independence? So I don't want to put words in your mouth here, but one of your selling points would be maybe if you want to remain independent and have the resources, then you come to a company like Helios. Correct. Yeah, absolutely. I mean, that's the whole idea. A lot of times RAs are like, oh man, one day when I have this big investment department, I can do all these cool things, we are more or less a way for advisors to leapfrog their own designs many years into the future right now. It's cool. It's what outsourcing is all about. It's the niche that we solve. But it comes philosophically with this idea of we want advisors to work with us who want to give their clients a world-class asset management experience. And I know in saying that alone,

that there's a lot of advisors out there to say, I don't care about asset. management, great. Then Helios is not going to be a good fit. But if you want all that power and differentiation, like we mentioned as you grow, then we're a great fit. So what are you delivering for the advisors? Are you delivering model portfolios and customization that they then have to implement? Or are you taking care of everything? So they get to choose. God. Yeah. So they get to choose. So our traditional business models, we do all the research, we do everything across the board. But when comes to the model specifically, we'll go all the way down to the ticker and percentage level. They can drop that on their system, just like their same custodian, same technology, same

everything, and trade it just like any other advisor-created model. We charge a flat fee for that. We are about to roll out the ability to do everything we just mentioned, but for certain scenarios, have us do all the execution for them as well. It's going to be coming out in the next couple of months, but we will have that capability as well. So depending on how they want to work, obviously the flat fee model means the advisor is paying us.

If we move to more of a, I hate to call it SMA, but kind of that feel, then obviously it's a basis point relationship with the end client, very cost effective relative to SMAs normally, but still a different charging model because that's how that industry or that side of the industry works. How do you see the next 10 years in our industry playing out? One of the conversations that I've had over and over is. advisors that are roughly my age, I guess, you know, anywhere in the band from 35 to young 40s. In a midlife crisis.

And their senior, there we go, I knew that was coming. And their senior partner has been telling them for years that they're going to get equity or they're going to retire or they're going to step back. And it just doesn't happen for various reasons. Do you think that there will be a point where there will be a revolt or how is the next generation And like, again, the people that have been doing this for 15 years, how do they get ownership of, of their senior advisors business? I got to watch myself here because I have a lot of opinions about this. But I do believe there's going to be quite a bit of a snapback back to more of that true be your own boss, run your own practice type of mentality.

What it feels like to me is that we went through this period of time where you had all these advice. that were locked up in captive or quasi-captive environments. And there was that rush to go RIA or pure independent, right? And then 10 years goes by, and now you're exactly right. You've got a lot of advisors in their late 50s, early 60s, and they're saying, well, now I want to cash out, right? But maybe I want to do it under my own terms. And so these aggregators emerged.

And so it became, you know, sell your book to us or sell part of your book to us or just simply affiliate with us. give up some of your autonomy, give up some of your revenue, and we'll make your life easier and give you a nice exit, right? And that exit has meant that now there's this whole world of junior advisors, right, that are now inheriting these books in a corporate structure. Well, all that that seems to see to me is that now those junior advisors are going to become senior advisors. They're going to build those relationships. And now that's going to start all over again, where they're going to jettison out from whatever structure they're under to start their own thing. And we're banking on

that world. What we believe is that, you know, there's a lot of advisors out there that want to live within a structure. There's a lot of advisors that don't. And we play in both of those worlds, but it's all about being able to define your path, your brand, your philosophy, and doing it where you're focusing on your highest and best use at the same time. So I think a snapback's going to happen. I think that the world is going through this transition of books right now. And I think it's going to be a few years before that snapback happens. But I do think that these junior advisors that didn't elect to roll up under a structure that were forced into it because that was their only option are going to become senior advisors and snap out at some point. Chris, I can tell you, it's already happening.

I'm having those conversations pretty frequently. Yeah. And frankly, I mean, those disruptive junior advisors become senior advisors, grew up in a world where financial planning and all the accoutrement around it is now commoditized. It's no longer the frontier. What is? Well, the frontier is how do you create the feeling with each of your clients that they are your only client on the asset management into things? And that's where customized models that are a service, I think, are part of that conversation.

So where do we send people to learn more about Helios? Website's great. At www.heeliosdriven.com. Love to have a conversation for sure. Perfect. Thanks very much, Chris. Appreciate you. Thanks again to Chris. Remember, if you want to reach out, if you're an advisor,

go to heliosdriven.com and send us an email Animal Spiritspot at gmail.com.