Corient removes internal barriers to collaboration

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 23:28

   The way that I like to position the business is, I think that we've built what I deem to be the only truly conflict-free business in wealth management. But let me define that. I think businesses get conflicted two different ways. The first way that they get conflicted is based upon the structure of the business or how they ultimately govern themselves. So think of it as two different standards of care.

2. 23:50

   Fiduciary standard of care, you're operating the client's best interest at all times. you're obligated to do so because of that standard, or a suitability standard, which effectively is the product or the service that you're offering good enough to extend ultimately to the client. We have built the entire business to be a fee-only fiduciary business, so operating essentially at the highest standard of care.

3. 24:12

   We're the largest business in the world that operates under that standard of care. So anyone larger than us has the ability to operate at a lower standard of care. So that's the first piece. Second piece is in terms of the business model that you ultimately put in place. And this ties to how we ultimately serve clients and how we work together. And so the goal when we launched the business was I wanted to make sure that there were no structural impediments to collaboration from the onset.

4. 24:41

   So if you think about every possible decision that you could make that would prevent something from collaborating, we've effectively, in my opinion, removed it at the launch of the business. So I'll give you two examples. So we have about give or take 3,000 people inside of the Coriant business today. We have one compensation plan. We have no exceptions to the compensation plan. And the reason for that is once you start to put exceptions in place, let's say you and I work together, you're paid one way, I'm paid another way, it is very, very hard for us to objectively serve a client with different outcomes or different objectives.

5. 25:13

   And that is kind of true across the different elements of the business. The second example I'll give is I run one P&L across the firm, and I don't do any form of chargebacks. So again, you think about getting great experts in front of clients as quickly as possible with relevant expertise. Once you start to put silos in place, once you start to segment your P&L, once you start to run chargebacks, you're inherently creating underlying friction in the business.

6. 25:38

   So effectively, you know, by operating the business that way, fee-only fiduciary standard, a structure in place that maximizes collaboration with no restrictions towards it ultimately happening, it allows you to think about delivering services for clients that are different and outside of, call it the norm, of just traditional wealth management or wealth advisory system. This is what I was trying to get to, where it's like, you're not concerned about what other people in your industry are doing.

7. 26:05

   Your North Star is like, we just want to keep serving clients. better. And so if we can offer a service that ultra high net worth people would benefit from, it doesn't matter if other people in the industry are not doing that. That is the only thing we're focused on. Absolutely. We want to be the best in the world at serving ultra high net worth clients. And we think we can do that through deep specialized expertise. So the advisors, again, I mentioned people love to play on optionality. I can serve a tech entrepreneur.

8. 26:31

   I can serve a small business owner. I can serve a corporate executive. Those are all very different skills. So we push ourselves deep specialized expertise that starts in terms of the clients that you ultimately serve. And I'm always encouraging people, be as specialized as possible. The more specialized you are, the more relevant you are, the better advice that you can ultimately give to your clients. And then it extends beyond the service offering. And the goal is by pairing all of these pieces together, we can do more for clients because we're helping to connect the dots. Like a lot of the services that I had mentioned are services that clients need or want or ultimately use. And if we're not piecing it together for them, we're putting that burden ultimately on them. So by being able to manage somebody's financial plan, somebody's

9. 27:18

   wealth transfer, managing their investments, overseeing their tax, executing their trusts, by thinking about that as a collective problem, as opposed to, you know, five or six individual want to see. decisions, I think it leads to meaningfully better outcomes. But again, you can't do it if you have a structure in place that prevents you from being able to achieve that. And that's why it was so important, launch the private partnership to align objectives and create a fundamentally different experience, and then audit every possible area of the business model to ensure that there's nothing internally that would create these tensions or silos or conflicts