What's the biggest growth challenge for family offices? Ask a chief growth officer

Just over six months have gone by since Eddie Brown began his tenure as chief growth officer at Pathstone. And according to the newest member of the Englewood, New Jersey-headquartered RIA, the decision to transition over from the RIA custody business has been well worth it.

"It has been an incredible first six months," says Brown, who referred to his first half-year as "kind of an intentional sprint" in an interview with InvestmentNews.

An energizing start

A seasoned veteran, Brown's track record in the financial services industry spans three decades. From his early years at Citi and Smith Barney, he went on to play instrumental leadership roles in building up the family office businesses of Schwab and Fidelity.

"Fidelity and Schwab are tremendous partners to the RIA community," Brown says. "They've helped, really, what was a cottage industry become a preferred destination for ultra-high-net-worth clients and a top choice for those seeking fiduciary services."

It was during his time at Fidelity that Brown first crossed paths with Pathstone, landing the firm as one of the giant custodian's first multi-family office clients.

"After taking that [chief growth officer] seat in November, it was all about immersing myself, leading, connecting, and really getting under the hood of the firm," he says. "It's been energizing."

One of Brown's most memorable experiences so far at Pathstone was its 15th anniversary celebration earlier this year, where he says members of the organization came together from across the country to celebrate the firm's unifying purpose and culture. Since launching in 2009, the firm has grown into a network of approximately 800 professionals across 22 office locations, with over $150 billion in assets under advisement and administration as of June 30, 2024.

"Pathstone's had a tremendous growth story ... now, being able to pull on all [my] experiences, I've found there's some innovation in financial services, but there's also some tried and true ways to build business, great teams, and client relationships."

The growth imperative

Over the years, Brown has witnessed a double-digit growth trend unfold of ultra-high-net-worth clients electing to work with RIAs. Especially among Pathstone's chosen clientele of substantially wealthy families, single-family offices, and institutions, he says the trend toward RIAs has been tightly linked to a rise in their wealth and complex needs – which must ultimately be met by growing the business.

"Growth is required to have scale, to be able to invest in the best people and talent, which is one of the biggest growth challenges out there," Brown says. "There's a talent war in the industry right now, so we have to make sure we're attracting and retaining the right people."

Beyond human capital, he says growth is necessary to fuel technological investments. To keep pace with the demands of ultra-affluent clients, he says advisors need advanced infrastructure and systems – including artificial intelligence – to deliver services quickly and free themselves up for higher-value activities.

To fill gaps in their talent and technology, many firms in the RIA space have turned to M&A, making strategic investments to add high-quality resources. But that brings its own challenges, Brown says, as the combining organizations have to navigate the thorny problem of integration.

"People underestimate the true challenge of combining firms and culture, to ultimately bring the best of what's available and make sure it provides a better overall experience," Brown says. "We've done 15 of these [integrations], so we're learning from each one, and each one has different levels of complexity."

Beyond the bottom line

While RIAs might have lagged other industries, the growing trend of firms hiring for chief growth officer roles points to the strategic importance of having a CGO to drive assets and market share. But for his part, Brown sees growth as an "inside out game" that goes beyond fixating on revenue and the organization's bottom line.

"I think about it more internally ... it's about growing our talent, growing our resources, and having more services to be able to support our clients. It's growing our technology, and enabling our people to do more," he says. "I think the chief growth officer has a responsibility to bring energy to the organization, to really be that inspirational role model for what it means to grow."