What is Carson Group without Carson?

Recent leadership changes at Carson Group and a bombshell lawsuit against it have raised questions about its corporate culture and the consequences of a brand being tied so strongly to one person.

In April, the Omaha-based wealth management company announced that Burt White would become CEO, replacing founder Ron Carson, who moved to the chairman role. That news came shortly before news broke about a lawsuit filed in March by Carson’s former chief marketing officer Mary Kate Gulick, who alleges she was retaliated against and ultimately fired for raising concerns about how the firm handled an alleged sexual assault by an employee at an industry conference.

Since then, the company has not responded to interview requests from InvestmentNews.

The lawsuit claims that Ron Carson opted to not terminate the employee who was accused of sexual assault and that the worker was allowed to attend other conferences, which Gulick said posed a risk to other employees and attendees. It is unknown what legal issues the company may have had to consider in retaining the employee, and it has not yet filed a response to the complaint to present its side of the story.

The case claims that high-level employees, including White, were initially supportive of Gulick over the issue but became less so over time.

In messages exchanged with Gulick, White applauded her for being “a pro at an org that isn’t” and confided that he felt he did not fit in at Carson Group, and that he was “fighting against all of what Carson is. Like [he is] rejecting a bad organ implant,” according to the complaint.

Gulick had informed the company prior to the event that she had planned to leave Carson Group, though she later opted to stay on at the urging of former managing partner of wealth solutions Jamie Hopkins, who also left the company last year, the lawsuit stated. Gulick claims she remained at the company out of a sense of obligation to protect other women.

While at the company, she filed for leave under the Family and Medical Leave Act and made it known that she was having medical and self-care issues because of how the event was handled, the court records stated. She sued the company for retaliation and several counts of discrimination, including gender and disability discrimination.

For Carson, who over 40 years ago started building what is now a $35.5 billion financial services empire, the case stands to tarnish his image. He has been the public face of the company and extremely well known in the financial advice world.

Changing ranks

“Potential regime change, along with a reputational crisis, is a volatile situation at any firm,” said one senior industry executive, who spoke confidentially to InvestmentNews about the Carson Group matter.

“If Ron does leave, how will the Carson Group be able to function without reference to its founder and until recently its CEO,” the executive asked. “That will be driven by the resilience of the organization Ron built, and the ability of that leadership team to think for itself.”

Recently, the company brought on two high-profile people for c-suite roles: Dani Fava, who was previously with Envestnet, as chief strategy officer; and Heather Randolph Carter, who like White came from LPL, as chief marketing officer.

“When you are building a brand with multiple generations in mind, you have to think about how you project your voice, who is projecting your voice and making sure you have an underlying culture that will affect how people think about you,” said Joe Anthony, president of public-relations firm Gregory FCA, which has not worked with Carson Group as a client.

Any company linked too much to one persona – such as Fisher Investments or Tesla – can face reputational risks or other risks if something happens involving that person, Anthony noted. And it’s a problem primarily faced by bigger companies, he said.

“This wouldn’t be an issue with a $100 million RIA led by someone you didn’t know,” he said. “Top status begets more pressure when things like this come up.”

Ron Carson’s prominence on LinkedIn, at industry conferences, and on TV interviews has meant that him taking a step back from the day-to-day leadership of the company is noticeable for the brand, Anthony said.

That the company has been largely silent with the media since the lawsuit was reported likely indicates that it does not want people to face questions about the litigation, he said.

Amid the coverage of the lawsuit, he said that more attention should be paid to whether the victim in the alleged assault is OK.

A look at the company’s ratings by former employees on job site Glassdoor shows that some have been unhappy with its leadership and culture, though others gave rave reviews about it.

LPL background

Things could look slightly different under White. For example, “given Burt White’s record at LPL, one could expect Carson under his leadership to centralize more of the investment decisions in the home office – leaving some, but less, investment discretion to the advisors in the field,” said Loren Fox, director of research at Fuse Research Network. “We’d also expect him to increase the use of model portfolios. That is not unusual, as it seems to be a trend for the mega-size RIAs to put more guard rails around their advisors’ investment decisions once the firms reach $30 billion in assets, $40 billion in assets, or larger.”

Unusual case

It’s common for employees to complain about discrimination, but it’s less so to see them take issue with the treatment of others, particularly in court cases such as Gulick’s lawsuit, said Michael Palmer, New York managing partner at Sanford Heisler Sharp.

“What you don’t see in every case is someone who’s a corporate officer or a VP level who was complaining about discriminatory treatment and was then subjected to retaliation,” Palmer said. “It happens, and it goes to show that retaliation and discrimination can occur against anyone at any level of the company.”

Gulick’s dismissal, and the lawsuit, could have some negative external publicity, but of more consequence to the company could be the effect internally, he said.

“Another issue for companies is their internal reputation – how employees are viewing the company’s behavior and whether morale is really taking a hit as a result of the treatment that is at least alleged against the company,” he said.

He also pointed to an allegation in the complaint that an employee told Gulick to be less emotional about workplace issues.

“It is a travesty, but it is honestly very common to see the concerns brought up by women and dismissed away as being emotional or other gendered tropes like that,” he said. “You can tell from the complaint that men were [also] upset by this.”

Related Topics: Burt White, Carson Group, lawsuit, Ron Carson