Editor’s note: In his three-decade career in the financial services industry, Greg Friedman, 62, co-founder of Private Ocean Wealth Management and CRM company Junxure, has been a leader in transforming the culture and technology of investment advisory firms. Private Ocean, which had $2.7 billion in assets, was acquired in 2021 by Wealthspire Advisors, where Friedman now serves as chief strategy officer and West region leader. AdvisorEngine acquired Junxure for $30 million in 2018. Friedman is also the co-author of three books, “Advisory Leadership: Using the Seven Steps of Heart Culture to Create Lasting Success for Any Wealth Management Firm,” “The Financial Advisor M&A Guidebook: Best Practices, Tools, and Resources for Technology Integration and Beyond,” and “Integrating Culture in Successful RIA Mergers and Acquisitions.” He recently spoke with Rethinking65.
Ed Prince: Congratulations on recently receiving the Financial Planning Association’s 2023 Heart of Financial Planning Award. Throughout your career, you have encouraged advisors to grow and focus on “taking care of people.” What are the biggest ways advisors can grow and what are the most important steps they can take to take care of their clients and colleagues?
Greg Friedman: I have devoted my life to what got me into financial planning, which was, I wanted to work with clients. And, simplistically, I wanted to make them happy. What does that mean? I wanted them to achieve their goals. I wanted them to feel peace of mind. I wanted them to feel that if there was something that they really wanted to do, that I would use a financial toolkit, and almost a coaching model, to try to help them, to support them, to go in a direction that they otherwise might not have.
What then evolved was that same philosophy: I realized for people to do their best work, focusing on the client having this great experience, employees needed to be happy at work. What is happy at work? It’s a positive environment where I feel respected. It’s an environment where I am consulted, there’s collaboration, there’s humor, there’s levity, but seriousness; there’s pride in doing a good job. So, there are these things that for me were important in my environment. I thought there’s probably like-minded people who feel the same way. And what I found over my career is, it’s the smartest, best and brightest people that like that kind of environment. It’s positive, supportive, energized. Throw in humor. It’s a good place that people like to go.
I would love to tell you I am the most incredible, smartest strategist. However, I don’t believe that. I think I’m OK. I think I’m not the worst. But I don’t think that’s what made Friedman and Associates successful, Junxure successful, Private Ocean successful. When I think back, it was building up a group of passionate, focused, energized people, creating an environment for them to thrive. Happy clients, happy employees.
When I think of advisors who aren’t growing, invariably a lot of the diagnostics is, “How are you marketing?” And that’s fair. But I also ask, “What are you doing to create a wow experience for clients?” And the only way you create a wow experience for your clients is if your employees are so engaged and everybody a client talks to in your firm provides a quality experience. And then those people refer you and you’ll have more business than you know what to do with.
Prince: What advice would you give to financial advisors on how to differentiate their firms?
Friedman: One idea is having a niche — specialized expertise in a very specific area. I always chose to differentiate myself by a couple of things: First was the questions I asked, and second was the quality of my work. I worked on building my reputation by being very attentive, technically very competent, more than competent, and proactive, not reactive. I always tried to be ahead of what the client might be wanting or thinking about or asking, instead of waiting till they called … That’s not how most people operate.
Prince: Can you be more specific?
Friedman: Everybody knows the standard discovery questions. What about facts and figures? And then the next layer — questions like goals and objectives. I would get into hopes and dreams: “What would you do if you had all the money in the world?” and then, “Why aren’t you pursuing this thing?” Almost coaching-type questions.
Additional Reading: Don’t Forget About Clients in an M&A
I’ve worked with executive coaches for many years, and I’ve benefited a lot from the questions they asked me, so a lot of times I find myself asking those types of questions. And that’s very different because it takes more time. It’s a different mindset about what you’re trying to do with a client, as opposed to how fast you can give them a portfolio and tell them some basic things to do. I was really looking to see if I could change their lives in a meaningful way. … and I always had success because of that.
Prince: As co-founder of Junxure, you revolutionized CRM for financial advisors, and you focus a lot on integrating technology and practices. If you were to give advisors just one piece of advice about how to implement technology successfully, what would it be?
Friedman: Understand what problem you’re really trying to solve and then find a technology tool that addresses that. What happens is advisors tend to get swayed by a whole lot of bells and whistles, and the marketing of a lot of different applications. And they all look amazing. And they lose sight of prioritizing what’s the single biggest problem they’re trying to solve. Technology is such a big subject that I say start with core. What are you trying to solve? And find the best solution, commit to it, learn it, train it, use all the bells and whistles in that particular application, or you move on to the next one.
Prince: How is AI going to impact advisors, and is it too early to integrate it into practices?
Friedman: It’s not too early at all. It already impacts a lot of things, but not the way people hear. The opportunity is for it to really help what I’m going to call the back office. You can use AI to check your recommendations. Are you thinking of all the considerations?
If I were an accountant, I would be very concerned because I see AI really disrupting tax-return preparation. While it won’t put accountants out of business, it’s going to significantly change their business model, which is already under duress. I would argue something similar is going to happen to financial advisors, but not to the same degree. I feel like AI is a great opportunity. Vendors are going to learn how to harness it and use it in financial planning applications. That will make it a lot less challenging for putting together plans. But I don’t think that the advisor can get away with not understanding all of this and knowing basic rules and laws. They can’t use it as a shortcut. You’re going to have to understand clients … [which is the] consulting and the coaching aspect of what we do.
Prince: Merging cultures is another topic that you have focused on a lot. Were there any hard lessons you learned about this when you were building up your firm Private Ocean Wealth LLC?
Friedman: One of the most important lessons I’ve learned is, hiring is critical; taking your time to hire right is critical. What does right mean? Is it right for your culture? Is it right for what you’re trying to do? Because people are quick to hire when they should be a lot slower to hire, number one. And number two, the old “slow to hire, quick to fire” is what most people think they should do and then they don’t.
I’m not saying be quick to fire, but there’s not a lot of attention given to culture. Culture is a real thing. People’s behavior in the office is a real thing and that has [consequences] if you don’t police a little bit. For example, people collaborating and not treating each other a certain way. If that’s not policed and allowed to be there — most people don’t want to confront any of that — what you get is not a very good culture. That’s the end of it, that’s what happens. But if you’re really diligent — “This is important, and this is why we respect each other, and this is why we’re here to help each other succeed” — you can create a tremendously successful supportive environment that people want to come to; they are excited to work with their colleagues. And guess what comes from that? Success. Happy clients. That’s what my experience is.
Prince: If you were to add a chapter to your book “Integrating Culture in Successful RIA Mergers and Acquisitions,” is there anything new you’d write about?
Friedman: I’m adding a whole new book: here’s what the world shows me. Culture is the number one thing that every CEO talks about on stage. Every M&A person talks about cultural fit, how important it is. My experience in the real world is, their definition of culture — the bar is incredibly low: “Hey, you’ve got revenue, you’ve got clients, you look like an advisor. Done. Check.” Right?
And I think that the real work is, do you really value the same things? Because not every firm does. Do you practice the same kinds of things, whether it’s birthdays and holidays? How do you think about employees? That’s what culture becomes. That’s the environment you’re in. Doing M&A without really facilitating bringing cultures together and assessing how far apart they are to start with — because they’re always going to be different — without doing that work, and without doing the follow up, how do you come together? And just trying to go through the business side and go “check, done,” the more fallout you have, the more people leave, the more it hits client service and client experience. And I would argue the less successful that merger will be.
Prince: The RIA industry has seen significant mergers in recent years. Do you think this type of activity is sustainable? Why or why not?
Friedman: It’s going to continue, maybe not at the same pace, but it’s going to continue. It’s not different from me. There are several problems that are being addressed by these [mergers]. First of all, you’ve got large companies doing an arms race to try to be larger, to invest at scale. But second, you’ve got this huge succession problem in our industry. Most of these people do not have a solid succession plan, post them. And so, this is a great outcome. You sell into, merge into a big firm and they help you find a successor. As long as that’s the case, I think there will be lots of these M&A transactions. It’s definitely going to go on for a while.
Prince: Wealthspire Advisors acquired Private Ocean and you are now chief strategy officer and the West region leader at Wealthspire. What do you enjoy most about what you’re currently doing? Has retirement ever crossed your mind?
Friedman: Wealthspire has very generously let me create what I want, so I work probably 75% of my time, and I’ve got a little more balance in life, which is amazing. And so, retirement isn’t really something I think about.
I like pretty much everything I’m doing. I like participating in long-term strategic thinking — where are we trying to go, and why do we want to go there? I enjoy helping throughout the company, leveraging my years of relationships and experiences, bringing in consulting firms, bringing in resources and bringing connections, to address things that we’re trying to build. I very much enjoy all the people at Wealthspire that I’ve come to know and work with. So, I’ve gained a lot of new colleagues, and yet I’m still very much connected to the West, my former Private Ocean group, so that is awesome.
I don’t have a lot of complaints. I do things on my own time, like I’m working on another book, and I get asked to speak and, and I enjoy that activity. I definitely love our industry. I think it’s really important, what we do, and I love giving to it, because it’s been very generous to me.
In a four-decade career in journalism, Ed Prince has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News Tribune. This interview has been edited for clarity and conciseness.
