Ross Levin
Ross Levin
THE BIG PICTURE
to happen , opportunities have to exist for those behind us . I stepped down as CEO a couple of years ago , and Wil stepped aside as president . We have two terrific managing partners , Brian Martin and Becky Krieger . This transition has been successful , but not smooth . We have experienced hurt feelings and harbor some lingering resentments . We talk through things and , to the extent that we are open , we work them out . But there is a difference between
being open and being transparent . Each of us keeps a piece of ourself to ourselves , leaving some challenges unresolved .
Our employee shareholders purchase shares from us through bank financing . Wil and I are each selling 3 % of the business annually . This arrangement creates a different set of issues . Banks want to see certain results , generally defined as EBIT- DA . Every current dollar spent on the future of our firm reduces Wil ’ s and my sale price and our percentage of the profits , even though new shareholders are buying the future and we are selling the past . If we constrain spending on the future , we are limiting their future . And we are not giving the firm away . We have set a price that we believe to be fair to each party in the transaction . Shareholders who are purchasing shares are taking on tremendous levels of debt and betting on a vision that eventually won ’ t include us .
The internal sales serve Wil and me in many ways . We are continuing to do much of the work we love , and our employee shareholders are trying to help us determine how we can do it in ways that are the most rewarding to us . They want us to describe what our future looks like . This is immensely meaningful . Wil loves to build things , so he has worked tirelessly on our standards of care and integrating a tool we call the “ Wealth Management Index ” more cleanly into the practice ( the index asks clients questions about their goals and scores their progress ). He continues to carry a heavy client load and has a significant interest in continuing to grow the firm , as do I .
As for me , I still like to be with my colleagues and work with clients on better connecting them to their money , but I also continue to have outside interests ,
I ’ ve never really worked for anyone , but I can definitely say that for the last 37 years I haven ’ t worked for anyone other than our clients . such as my writing and my involvement at the University of Minnesota . The employee shareholders appreciate our involvement and want to take things we don ’ t like off our plates .
Wil and I still have important work responsibilities . We serve on the firm ’ s executive committee , which entails weekly hour and a half meetings to evaluate our metrics ; discuss issues that the firm is confronting ; and make sure the firm is moving toward our one- , three- , and 10-year goals . We still serve on the board of the firm . I don ’ t have an interest in riding off into the sunset . There are times I can get frustrated with not having enough flexibility , but my life is far more good than bad .
By keeping Accredited independent from a private equity buyer , we think we ’ re more likely to remain true fiduciaries . Many of the larger RIA firms that have been bought or have merged are no longer fee-only . They create their own products , and they can earn compensation long after a client leaves them . It ’ s not in judgment of other firms that we choose fee-only advice . It ’ s just our choice . It means every month clients can decide whether they want to continue working with us and we get paid for the work we are currently doing . If clients leave us , they can take their investments and materials with them . The investments are in their names , not ours .
Larger firms have more capital , so they may be able to market better , but independence lets us experiment in ways we couldn ’ t with outside influence . We ask that our employees spend at least 50 % of their time in the office . We want to create reasons for them to want to come in , so we have tested different types of desks , hoteling options , booths , etc . We put in two pickleball courts because over half of our staff enjoys playing , as do many of our clients . We have built an outside area where we can have staff or client events , and that helps build relationships . We have full control over our budget ( while keeping the banks in mind ), so we have ultimate control over those decisions .
Most important to me , Wil and I started this business when I was 28 years old . I am now 64 . I ’ ve never really worked for anyone , but I can definitely say that for the last 37 years I haven ’ t worked for anyone other than our clients . I love talking to them . I love walking around the office and teasing my colleagues . I have a lot of outside interests , but none provide the meaning that this work does in the way that it does . Do I really want to give this up for a potentially bigger balance sheet ? I am grateful for what I have , so why do I need to wish for something else ?
If this column touched you at all , I invite you to our offices for our “ Be Our Guest ” event on June 11 . As in the past , we open up our office to up to 20 people who make a $ 1,500 donation to the Foundation for Financial Planning . In return , we spend a day going through our practice and procedures with presentations from our wealth and investment managers and operations staff , and we explain how our concept called the “ entrepreneurial operating system ” has transformed our firm . We also provide you with templates and encourage you to interact with our staff to answer any questions you have . If you would like to learn more about Be Our Guest , please email me at ross @ accredited . com . I would love to see you there and I promise it will be worth it .
ROSS LEVIN is co-founder of Accredited Investors Wealth Management in Edina , Minn .
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