Living at Work

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Hi everyone, this is Sterling Shea from Barron's, and I want to thank you for tuning in to another episode of The Way Forward. This week, our guest is Rob Francis, who is CEO of Aspiriant, which is a national RIA firm headquartered in California. Rob's been at this game for a very long time, and when I'm asked so frequently by financial advisors about how do they position their firm for long-term success, I think Rob has a lot of wisdom to share and a lot of insight in some of the dos and some of the don'ts in making sure that your firm strategy is really prepared for success. Rob, thanks so much for making time for us today.

You're welcome. Thank you.

Rob, prior to the start of the COVID crisis, before all this began, what, what were some of the most important strategic priorities for Aspiriant?

Coming into 2020, we were really on the tail end of an initiative that we called One Aspiriant. And One Experient, that initiative was launched back in 2016. So we were really entering our 5th year of that initiative. And One Experient was really created after we had completed 4 mergers in an 18-month period back in 2016 and 2017. And we added about $3 billion in AUM, 35 people in 3 different cities. And so, When we were taking up our strategic initiatives back then, One Aspiriant was something that made a lot of sense. And so over the past 4 years, we've been focused on the One Aspiriant initiative, things like integrating our organizations, coming together as one culturally, building our growth infrastructure to handle even more scale. So where things related to modernizing the way we serve clients, institutionalizing how we care for and cultivate our people, things like that. So, there was a fair amount of modernization and how do we scale. We added key positions and roles in our organization. Building a learning and development platform, as an example, was one of those things that we knew we needed for the next phase of our own growth. When 2020 came around, we were really sort of wrapping up One Experient. There were things that, you know, we wanted to make progress on before moving on to our next initiative, which is something we're working on today. But things like evolving our board governance, implementing new technologies, building out our learning and development platform, and really turning our attention more to growth in 2020.

Well, yeah, I want to get into some of those aspects, but what I heard you say was this notion of institutionalizing client service and thinking, being more intentional in the way you think about caring for your people. But when COVID hit and we shifted to this virtual format, everybody's priorities shifted a little bit with that. Can you talk to us a bit about how the priorities for both you as CEO and for Aspirion at large adapted to the COVID situation?

I think the core long-term priorities haven't really changed from a business perspective. They're still core to who we are and our long-term strategy, so those kind of remain. But naturally, when the pandemic hit, it created just enormous amounts of immediate near-term priorities. Almost everything long-term and things that we were working on in due course kind of get put off to the side. So, the obvious things of adjusting to working from home and adjusting to service delivery, how do we continue to provide superior service in this environment? And then a big one was just taking care of our people. And so, naturally, there's a lot of people in the organization who already were effective working from home, and then there was another 30% of the organization who really had never worked from home. And so, there was immediate pandemic-related concerns and issues, naturally, the market falling, sort of the investment team kicking into gear with webinars and connecting to our clients in a productive way. And so, all of the things that sort of dealt with the immediate, you know, concerns that we had and what everybody really was dealing with at the time, those became the priorities. And I would say, you know, that lasted, you know, probably about 4 months. I mean, it was really quite remarkable. The work that we had done around One Experient really began to shine inside of the pandemic and inside of the crisis. Everybody knew their role. They knew where their boundaries were, what the guardrails, the core values of the organization, everybody was on the same page. And so, we built out our leadership team over the past decade. And so, there's not a lot of people wearing multiple hats in the organization. So, people kicked into gear. And in many ways, whether it was our technology department being ready for what if something happens, just fairly prepared for something like this. I mean, we never prepared for a pandemic, but several other disasters. And then I would say that the pandemic also created a lot of new opportunities to reinvent our future, right? The pandemic really pulled forward so many trends and things that were happening already. And so I think once we got past sort of the immediate near-term call-to-duty type priorities that were really handed to us, we began and shifted gears to how are we going to work in the future? How are we going to serve clients in the future? How are we going to hire and develop people in the future? How do we think about our growth strategy maybe differently inside of this new paradigm? And the paradigm is just predominantly working from home and sort of leaning into that. And so, the last 6 months, we've spent a lot of time. We've had several what we call executive committee home sites. So, we used to do offsites. These are home sites now. And they're different, but in terms of how we can execute on them, but we're taking these issues up today and we've surveyed our people, we've surveyed our clients, and so we're getting a lot of really good information to develop our strategies going forward.

Well, give us the tricks of the trade, Rob Francais' playbook, if you will. I would guess, knowing you, that you're a hands-on leader and you thrive in the interpersonal interactions that you have with team members. That's harder in a digital and virtual format, even with frequent communication. What'd you learn about doing it the right way. And if you think about that period and that transition, were there any learning moments that you might have approached differently if you had the chance to do again?

Yeah, I mean, lessons learned inside of kind of this period that we're in. One thing I think we've observed, and perhaps maybe we're relearning it, is some version of the old adage, where there's a will, there's a way. And sort of observing that people are fairly adaptable. So taking, you know, the work from home, we were already in a conversation about working from home and what our strategy would be. And like I think a lot of organizations cautiously turning the dial as it relates to that. So we had contemplated that. And, you know, when we would talk about that, the barriers would get thrown up, you know, would we be more productive? Would you be able to team as effectively? And so, there was this notion that it's just not all that. It's good for a small part of maybe our time allocation, but it's not effective as a strategy. And I think we've learned, and look, naturally, it's very different to go from working from home along with the rest of the world, all at the same time, right? So, that's like ripping the Band-Aid off. That's very different than, as an organization, us going to work from home and the rest of the world hasn't gone to work from home or there was no pandemic. I think that's harder to— so the opportunity presented itself, and I think for most businesses to actually embrace the work from home as the pandemic subsides and gets into our rearview mirror, hopefully. Someday soon, that the benefits of work from home can remain. And so, anyway, so I think we learned that, where there's a will, there's a way. And I think the lesson there is next time we're taking up a fundamentally changed dynamic and we're throwing up barriers, let's really challenge ourselves as to whether those are true barriers or not, because I think we learned a lot how productive and how effective we can be working from home. And then the other thing I would add to that is we also learned that we're not working from home, but rather we're living at work. And there's a higher risk of burnout inside of this environment. The boundaries sort of get blurred between work and home. So, You know, right now there's not a lot on anyone's calendar. There's no social plans or, you know, sports or kids' activities, commutes. You know, there's not a lot of stuff on people's calendar. So, you know, the notion of taking a vacation as an example or even taking a break from work, taking the day off doesn't really have the same meaning because you're still at home and you're still not doing anything and there's not much in the way of plans. And so it's a little bit harder to manage taking a vacation. So I would say the risk of burnout and being a little bit more intentional about that is probably important advice.

Well, you also spend a lot of time thinking about and talking about culture of your organization. And there's one aspect of that that I wanna ask about, which is around motivation. In this period in the last few months, we've all felt so reactionary. You're reacting to volatility in the market, you're reacting to client anxiety, reacting to the pandemic, but it seems that you've taken this mindset of growth and you're moving from the defensive to a more forward-leaning offensive stance in terms of the culture. How do you motivate people to make that shift?

Well, the motivation to a work-from-home setting is built in. When we polled our employees, some 90% of them would prefer to work from home most of the time. Some of the time to most of the time captures 90% of our employees. But I think your question is really motivating people. What's changed or how are you motivating people in this environment? I'd say we're getting creative in a lot of different ways, so I'll give some example. So some of our department meetings, you know, in the beginning, you know, they would get on the Zoom call and everyone would just, you know, be on the Zoom call. And so one of our department heads came up with the idea of getting a t-shirt, you know, that, you know, had some logo on it, you know, for the investment operations group or, you know, a particular group in the organization. And they sent, you know, they ordered t-shirts, sent them all to the team members. And so when they get on team calls, they're all wearing the same shirts. And so there's a feeling of community and motivation, even though we're all at home and all of that, we're still a team. So there's a sense of unity and togetherness. So that's just one example of the kinds of things that we're doing, but there's, for children, for employees that have young children at home, as an example, we provided flex time. During normal work hours. We identified, proactively identified those individuals and allowed them to work flexibly and tend to their kids and deal with what they needed to deal with there. You know, there's, we've got Team Member Tuesday campaigns where we're highlighting different staff people, you know, on social media, things like that. And so, you know, from a from an executive committee perspective, when we have our meetings, we had our executive committee home site. So, typically those are 3 days. We're close. We share dinner together. It's usually morning to evening kind of affair, and we're all together. How do you make some aspect of that seem normal? And so, we sent out care packages to all the executive committee members with coffee and wine and snacks and all that stuff and sort of had fun with some of that. So, those are some examples. How do you motivate in a work-from-home setting?

Well, those are great. And now let's go into process though. Say everybody's motivated. All right, let's shift to a growth mode. What is that strategy and that process around new business and growth look like in this environment? How have you shifted what you were doing and thinking around organic growth in the business from a couple years ago to where you are now?

Yeah, so, you know, as we think about, you know, growth, first of all, we think this is an opportunity to make lemonade out of lemons. You know, when you're talking about organic growth, you know, clients and prospects they need more service in these times of dislocation. They need more service, not less. And so in many ways, we're lucky that way to be part of a business that inside of a pandemic or some sort of disruption that clients actually need us more, not less. And so the prospects are out there and they need help. And so really it's a matter of how might you connect to them inside of this environment. So some of the traditional ways of generating organic growth have fallen by the wayside, the ones that sort of rely more on the physical contact and being in person. And so we've got plenty of new initiatives. So we've already been leaning in, and we talked a little bit about One Aspirian and sort of building the infrastructure that's going to help us grow as an organization. One of those is our marketing efforts and how do we modernize our marketing efforts. And so we've been working on digital marketing and digital strategies for a long time, and we run digital campaigns that target particular concerns, right? So today, concerns around volatility and general disruption, planning opportunities in these environments. We can put together a campaign, landing pages, and get that information out and begin to capture some of these prospects, the ones that are not coming through referrals. Most of our business comes through referrals. These are really sort of the marketing and the pure marketing plays for us. So, we've had an exponential number increase, increased numbers in webinars. We've had investing webinars, wealth planning webinars. We had a teen webinar series, so teaching young adults how to manage financial affairs or their financial affairs and really spoke to a particular demographic. And so, you know, we've been increasing the number of those types of things that we've done. A lot of email communication to prospective clients. So that's sort of more traditional. PR, and then everything is how can you prospect? How can you do something unique through a video sort of touch? And so we've actually executed on wine tasting as an example where we sent wine in advance and set up high-end food and set up a wine tasting event for a few of our prospects. There's different phases of the pandemic for people, I think, and I think a fair amount of us have gone through our wine phase. And so it was sort of right at that time when people were in their wine phase. And so it was well received and an interesting way to connect.

I guess I'm still in my phase in that regard, but it sounds good. But sometimes with those digital campaigns, concrete ROI can be elusive and you have to go a little bit by gut. Can you speak to any of that?

I think it's been a little bit, it's been a little bit of trial and error, but I will say that this is our best year for pure digital connection and leads to turn into clients. And I'm not talking about just, I mean, we have landed a fair amount of clients, new clients that we've never met in person. And I imagine that's similar for a lot of organizations, but I'm really talking about those individuals who didn't know anyone who knew us and got to us through a digital medium and followed through that track and then ultimately became clients. And so we're having our best year this year doing that. Tough to tell whether it's elusive, as you said, what's the attribution? Is it because we're in pandemic mode and that's a more likely way to connect to anything today, or is it because the cumulative efforts that we have been undergoing for the past 4 or 5 years building this out, are those starting to pay off? So it's tough to tell which is which.

I would bet more the latter, but let's shift gears a little bit. I know that in addition to being passionate about the culture and strategy and growth, the passion for investing and creating great portfolios and investment solutions for clients is deep at your firm. You know, the upcoming months looking ahead, we've got an election cycle that'll be crazy by all accounts. We've got a whole host of reasons to be worried about growth and the economy. We're bound to see some volatility. How are you preparing clients to withstand that volatility that's inevitable looking forward?

So in many ways, we've been preparing for increased volatility, you know, including the potential for material pullbacks over the past few years. So if you read our materials or our insights, fundamental value investors and so leaning away from risk more and more as valuations got stretched. So, you know, growth was slowing, profits seemingly peaking. Interest rates are pretty close to zero, right? Valuations are elevated. So we've been leaning away and preparing clients for downside volatility for quite a while now. In fact, I would say that we spend some time preparing for volatility the other direction, right? So the kind of volatility that's up, so a melt-up type of environment. We spend today more time talking about the potential for continued, you know, sort of melt-up environment because our clients are fairly well-versed and prepared for increased volatility the other direction. So, you know, our portfolios and how we're positioned today, you know, we are leaning into fixed income defensive strategies. Lower correlated liquid alternatives, some gold, defensive equities. So we've been leaning in that direction. So their portfolios did very well in the fall-off in March. And then as it's been sort of a growth-concentrated, growth-led rally over the past 6 months, we've stayed the course pretty much, continued to lean away from that risk. So I'd say our clients are pretty well prepared for downside volatility at this point.

Well, the portfolios might be prepared, but then there's the client psyche in and of itself. If there's a return to more anxiety and fear, if there is potential for a contested election, for example, I think there is that possibility that we could see sharp turns. How do you prepare emotionally for advisors, or how do advisors prepare to respond to the emotions and behaviors of their clients?

I do agree with you. There's any number of things that could go awry, especially in the months ahead. So, you know, whether that's failure to reach, you know, additional bipartisan fiscal support, you know, the election turmoil, which is, you know, really starting to play out, it looks like, you know, in terms of what's out there today. And then just additional trade and business disputes with China. So, you know, there's a lot of, among other things, there's a lot of risk out there. And so, you know, preparing clients emotionally, like I said, I mean, we've been in this conversation for a while. In some ways, you know, it's validation that the strategy is working more than anything else. You know, the clients that we serve, long-term financial plans, they're tailored. Most of our clients, on average, our clients have been with us for almost 20 years. So, many of them, we've got several new ones, but many of our clients have been through this many times before. And I would say that it was a little bit harder. We used to be a little bit more on the benchmarks and more sort of a buy-and-hold strategy. And we can work through the— with intellect, we can work through the emotional battle. So, going into the great financial crisis, that was our strategy. And so, when the big drawdowns happened in '08 and early '09, clients experienced quite a bit of drawdown. Now, we were fortunate because our clients have long-term plans and they were pretty well versed and educated in what the long-term strategy was. But what we found, first of all, only 4% of our clients actually changed their allocations inside of the downturn. And so many of them stuck with their long-term plans, or 96% of them stuck with their long-term plans, and they were rewarded for that. And so in the 2011-2012 timeframe, we held client focus groups where we were talking to clients about, let's talk about that experience now that the emotions of the downturn are sort of in our rearview mirror. Let's talk about the experience and what that was like for you. And what we learned was from them at that time, they understood it, they stayed the course, they get it. They asked for something that was a little bit more valuation sensitive so that if we can chop off the peaks and fill in the valleys a little bit and have a little bit of a smoother ride through these peaks and valleys, that that would be more attractive of an experience for them. And so we introduced valuation overlays and risk management strategies into our portfolios that have really served them well. And so Preparing them for the downside in our model is more preparing them to pounce when valuations get more attractive and them being more opportunistic. So, it's the flip side of the downside risk. It's how do you have your clients feel comfortable buying in March of '09, right? As opposed to as it's going down, right? Preparing our clients for the next drawdown is really about purchase opportunities and reallocating capital to riskier assets.

You know, you've given us a lot to think about around business strategy, motivating a team, engaging with clients in the digital format, and thinking about best approaches for portfolio and wealth planning. Send us home with a final piece of actionable advice. Thinking about not just the last 6 months of our shared existence in the COVID situation, but more broadly, your experience at Aspiriant the last few years. What's one piece of, what's one actionable idea or one piece of advice you'd offer to the advisors that are listening in?

So I'll answer the question and it probably falls into an idea around how you might consider motivating your people. So the best way to motivate the team is to connect them personally to the difference that we make for the families that we serve. And so we have an annual get-together. We call it Achieve. This year we're doing a virtual Achieve. And Achieve is a 3-day conference. We shut down the offices. Everybody comes into town and we talk about culture and strategy and service, and we do training and team building and all kinds of good stuff. But it always ends— we do two things. We hand out core value awards, and then we have one client come in and speak to us. And part of what the client talks about is themselves and kind of whether it's about their careers or their family or both, sort of a personal connection. And then it launches into, you know, why Aspirient, or, you know, what do we provide for the family? And I have to tell you, if organizations haven't ever done this before, it is really special, especially for the people who don't connect to the clients directly that work for the organization. And there is nothing that's more just more motivational than to hear. And I have to tell you, Sterling, these things get emotional. We've had several where there's no dry eye in the house, and they usually end with some pretty big bear hugs, which I don't think we'll be able to do this year. But nonetheless, that's an actionable idea. Find the right client who would want to tell their story. And figure out a way to connect your people to that story because it's, it's a really powerful motivator.

Well, Rob, that's a great one. Hey, thank you so much for sharing your insight. We really appreciate it.

You bet, Sterling. Appreciate the opportunity.

And I want to thank everyone for listening in. We'll be back next week with another episode of The Way Forward.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.