Client concierge frees up advisers

One firm has found a way to handle the tricky business of acclimating new clients

Apr 6, 2014 @ 12:01 am

By Liz Skinner

Pinnacle Advisory Group Inc. has facilitated the tricky business of acclimating new clients by hiring a “concierge.”

She walks about 50 to 70 new clients a year through what can be a cumbersome process of filling out questionnaires and other paperwork, as well as teaching them how to use the firm's online portal. Even established clients hear from Pinnacle's client concierge anytime the 20-year-old advisory firm introduces new technologies or revamps its processes.

“I felt the onboarding process was grueling for new clients, having to learn another piece of technology and such,” said Dwight Mikulis, one of Pinnacle's three senior partners and its chief financial officer. “I thought it could be a more pleasant experience for the client and not take time away from very skilled advisers who needed to be working on critical issues.”

This and other specialized support at the firm give its 10 senior advisers the capability to handle between 100 and 125 clients each.

Pinnacle's success with this approach is part of the reason InvestmentNews named it a top performer for personnel management in its 2013 Best Practices Awards. The firm received high marks across all performer categories and had especially high revenue per professional, an excellent indicator of a staff that's well-utilized and working in unison.

With the exception of the firm's one junior adviser, Pinnacle's advisers generate an average of $800,000 in revenue. The most any adviser generated is $1.4 million, Mr. Mikulis said.

BUSINESS RESPONSIBILITIES

The Columbia, Md.-based advisory firm also recently hired its first chief operating officer, who will take over many of the business responsibilities now handled by Mr. Mikulis, 56, and the two other senior partners, John Hill, 59, and Ken Solow, 56. He will start next month.

The firm has worked since 2007 to free up its three senior partners from administrative duties. That led to the hiring of a technology manager, platform business development manager and financial planning director.

“When you get to about $1 billion to $1.5 billion [in assets under management], the business is so large that it's really outgrown the players who started in those original roles,” Mr. Mikulis said.

The COO also will help Pinnacle acquire other advisory firms, an important growth strategy for the firm. Pinnacle took over a firm about three years ago, and it can probably acquire about $50 million to $100 million in assets a year from advisers who are retiring and looking for a home for clients, according to Mr. Mikulis.

In addition to the three senior partners, who worked together at a large insurance company before forming Pinnacle, the firm has four junior partners who bought into the firm. One of those partners is Michael Kitces, author of the Nerd's Eye View blog, Pinnacle's director of research and an influential member of the financial planning community.

INVESTMENT COMMITTEE

The firm has a dedicated investment group that oversees research and trading for all accounts, and meets with an investment committee of the firm's advisers so that in client meetings, advisers can describe investment recommendations “in English,” Mr. Mikulis said.

The investment team also runs portfolios for smaller registered investment advisers through a unit called Pinnacle Advisor Solutions. Pinnacle hopes that that business alone will top $1 billion in assets by 2018.

The firm's success is no accident. Mr. Mikulis participates in six studies that involve analyzing the metrics of running a lucrative advisory practice, he said. It also invests in the future; it spent $500,000 last year to renovate its office space.

In the end, though, the firm's hiring skills have been key, according to Mr. Mikulis.

“We've hired high-quality em-ployees to work with clients at all functions, which allows us to trust they will do a good job,” he said.

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