The Bridge: Fall 2018 | RIA Edition

RIA INDUSTRY KNOWLEDGE FROM OAK STREET FUNDING

a first financial bank company

Fall 2018 RIA Edition

Three building blocks for blockchain Page 6

Competition: The race towards the future Page 8

FEATURES

Insurance

Fall 2018

Publisher Oak Street Funding

Embracing new ways for a successful future.

14 4 Managing the

Contributing Editor Sharon Robbins Associate Editor Walter Niemczura Art Director/Designer Aidreen S. Hart Graphic Contributor Beth Winchell

cost of disruption The industry is experiencing unprecedented change.

Find out how to keep up.

Editorial Director Meghan Milam

The Bridge is a newsletter produced by:

5

The new digital landscape is changing the customer journey Alexa: Who’s the best advisor?

12 Kirsten Petras

We sat down with our Executive Director of Sales.

Share Your Thoughts If you have any questions, comments or ideas for The Bridge®, let us know. Email us at marketing.box@oakstreetfunding.com or visit us on social media.

Oak Street Funding does not make any representation as to the accuracy or suitability of any of the information contained in third party advertisements or websites and does not accept any responsibility or liability for the conduct or content of those advertisements and websites and the offerings made by the third parties. Third party advertisements and links to other websites where goods or services are advertised are not endorsements or recommendations by Oak Street Funding of the third party sites, goods or services. Oak Street Funding assumes no responsibility for the content of the ads, promises made, or the quality/reliability of the products, services, or positions offered in any advertisements.

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Oak Street Funding 8888 Keystone Crossing, Suite 1700 Indianapolis, Indiana 46240 844-357-9346 Loans and lines of credit subject to approval.

Potential borrowers are responsible for their own due diligence on acquisitions. California residents: Loans made pursuant to a California Department of Business Oversight, Finance Lenders License (#6039829). The materials in this newsletter are for informational purposes only. They are not offered as and do not constitute an offer for a loan, professional or legal advice or legal opinion and should not be used as a substitute for obtaining professional or legal advice. The use of this newsletter, including sending an email, voice mail or any other communication to Oak Street, does not create a relationship of any kind between you and Oak Street.

© 2018 by Oak Street Funding LLC. All rights reserved. Any duplication without prior written permission is strictly prohibited.

www.oakstreetfunding.com

LETTER FROM THE FOUNDER/CEO

Destination: DISRUPTION

As both professionals and consumers, we’ve all noticed a dramatic shift over the last few years in how individuals seek information and make buying decisions. How you choose to market your business, communicate with both prospects and customers alike, and generally adapt to this new digital era will determine the future success of your business. Disruption is in full swing and it’s up to you to either forge ahead or be left behind.

This edition of The Bridge is all about tackling the challenges that disruption brings as well as recognizing the opportunities that exist – as I believe the greater the disruption, the greater the opportunity. Is the fear of change or failure holding your business back from adopting new, modern practices? Are you intimidated by all of the exponential advances in software in the financial services industry? Do you have a strong online presence, or perhaps don’t feel tech savvy enough to keep up? Not sure where to start or what to do next?

Strategically adapting to the changing marketplace is no small feat.

Doing so may require a capital investment. Oak Street Funding provides

Free Whitepapers on Demand Our resources are packed with expert advice and best practices.

Read now! oakstreetfunding.com/whitepapers-ria

RIA firms with capital for growth, acquisitions, successions and more.

While challenging, disruption also provides opportunity whether you are maturing, expanding or planning your exit strategy. We’ll get you there.

Oak Street Funding® Vision Statement Rick Dennen,

Founder, President & CEO

To be the market leader in client experience for commercial financing by delivering unique and diverse product offerings through cutting edge technology and exceptional employee and client service.

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managing the cost of

From breakthrough technology solutions, to a tighter labor market, to all sorts of surprising competition, our profession is experiencing a period of unprecedented change. Many of these changes have such a dramatic impact on familiar business practices and environments that they’re referred to as “disruptive.”

While it can be difficult for businesses like yours to stay on top of these changes, it’s critical to be open to transformations if your long-term plan is to remain in business for your clients and your own compensation. Keeping up with innovation is not a one-shot effort. The businesses that thrive in coming years will be those who embrace change and position themselves for constant adaptations. What are some of the ways in which your organization can prepare for disruption?

Staffing. As technology assumes more of the lower-level work, the staffing structure of organizations is likely to see a greater emphasis on what’s now seen as mid-level and professional roles. That emphasis on technology may also create a need for employees who are focused primarily on developing, managing, and leveraging technology to better serve its clients, supporting the more traditional work of the practice’s professionals.

As personal relationships become increasingly important in both landing and retaining clients, companies will increasingly look to add professionals and other staff members who are adept at networking in person and through social networks. If current staff members lack those skills, bringing in new people may provide an affordable approach.

Training. If your team is going to stay ahead of the factors that are disrupting the industry, they’ll need to acquire new knowledge and skills. That’s particularly true for professionals who are in the middle or twilight of their careers, and who may be apprehensive about changes to what they’ve done for years. In addition to sending staff to industry conferences and workshops, it may be advantageous to contract with trainers to provide instruction and support in your offices.

Technology. Given that so many of the potential disruptors

involve technology, it shouldn’t come as a surprise that businesses will find themselves making substantial investments in the sector. The industry continues to move toward a cloud environment, which offers businesses notable advantages, including improved collaboration, scalability, and less in-house system maintenance. However, shifting operations from your own network to a cloud environment may carry additional costs. In addition, as your business becomes increasingly reliant on online operations, you’ll need to ensure that your internet security is robust enough to stand up to the newest threats.

Some businesses will want to consider getting into the development of proprietary mobile apps for their clients and employees to use. As the trend for using smartphones and smart 4 | w w w.oakstree tf un di ng.com • 8 4 4 - 3 4 3 - 1 4 1 1

devices becomes even more widespread, the value of apps will increase. The right app can give you a competitive advantage and improve your organization’s efficiency. And with today’s opensource architecture and tools, creating a new app is likely to be more affordable and than you may realize.

The other technology change you’ll want to prepare for is the inevitable adoption of digital currency.

Bitcoin is still in its early stages, but the many advantages offered by digital currency will likely see its use expand, and foster the development of other forms of digital currency. A generation ago, futurists spoke of the end of paper currency; digital currency may be the development that finally renders pocket money obsolete.

Marketing. In the ever-more-competitive marketplace, promoting your business will become even more critical. Getting the word out in the most effective ways is likely to require additional investments in multiple marketing channels. Fortunately, the growth of digital marketing is making it easier to develop highly targeted and trackable approaches for building your business. Unfortunately, success with these tools requires additional knowledge and expertise that your internal team may not have, so you’ll need to invest in people and companies that can help you make the connections you need.

Adequate working capital. Many of the elements described here, from staffing to marketing, will require some capital to support them. Having a strong base of working capital gives businesses a way to invest in those changes without having a negative impact on other aspects of operations.

If your business doesn’t already have excess working capital for investment, you may want to consider obtaining a working capital loan. Such a loan can be used for the specific needs facing your business, whether it’s to fund a new initiative, invest in a marketing strategy, upgrade technology, create training programs, add to your staff, update your current space, or any combination of these and other plans. A loan that’s structured to be funded from future cash flows can offer an affordable alternative to traditional funding sources.

Digital landscape is changing the customer journey ALEXA: Who’s the best advisor?

Most firms have noticed a shift in how customers seek information and make buying decisions. How you market your firm in this new, electronic and fast-paced world can determine whether your firm stands out among the crowd. Learn to adapt and thrive, and you’ll discover you can connect with customers and prospects in ways you never thought possible.

Reasons for the Customer Shift

Before we examine ways to flourish in this new era, let’s look at what has impacted the customer in recent years: • Going digital: Customers have grown accustomed to communicating with businesses digitally and may prefer this method over traditional phone or in-person communication.

• Prevalence of mobile technology: Mobile web browsing, shopping and researching has now become the new norm.

• Instant gratification: In this era of technology, people expect to receive information or service immediately.

• Shorter attention spans: With more and more data cluttering our phones and inboxes, customers are easily distracted and overwhelmed by information.

• Millennials rule: Younger adults born in the millennial generation have come of age and have now become the largest buying group in the world.

• Purpose-driven decisions: Customers have not lost their strong sense of community and still look for compelling reasons for buying products or using a service, especially for local or cause-related purchases.

Digital Marketing Strategies To Try

Some of the benefits of digital marketing strategies that firms can enjoy include lower cost, improved visibility (SEO), better targeting and personalization, and a shorter

sales cycle. Here are some digital marketing ideas to get you started: • Website: Your website is more than just a static brochure. Innovative firms use them to showcase customer testimonials, offer helpful advice or even service customers.

• Blogging / Content marketing: What news, trends or information do you wish you could share with your customers? Use blogging and content marketing for better search engine optimization and showcase your expertise.

• Social media: Your customers are using social media. Find out which channels through experimentation or surveying them. Share helpful information, local stories or behind-the-scenes footage on your company social media pages.

• Email: Whether you send out a monthly newsletter or a listing of community events, most firms under-utilize email newsletters as an effective marketing tool.

Consider driving traffic to your website or social media accounts via email.

• Video: Try several options in this category, from live social media videos to your own YouTube® channel. Share facts, stories, customer successes, or answer frequently asked questions via video.

Don’t forget to include some of these on your website and link to them from other channels.

• Online chat: Many agents have added online chat features to their websites to answer questions that prospective customers or current customers may have. You may be able to find an industryspecific service who can handle the chat service on your behalf.

• Online listings: From Google® Local profiles to business review sites, many online directories exist to help customers find what they need. Do research to find which can best direct customers to your website. Also consider trade industry association listings as an option.

• Internet advertising: With tools like

cookies and paid search, consider investing in either pay per click advertising or remarketing ads. Pay per click will help move your business listing higher up on a Google page, inspiring visitors to choose your business over competitors n which to click. Remarketing will show an ad for your business to a website visitor after they have left your site, reminding them of who you are and to come back.

• Geo-fencing: Advances in marketing have enabled advertisers to specifically target consumers in a geographic region.

Using geofencing tools, you can deliver your advertisement to a pre-defined set of boundaries, when they are most likely to see it. For example, when someone is near your office or location, you could invite them over to discuss their financial goals and plans.

• Voice marketing: Amazon® Alexa, Google Home, Google Assistant and other conversational user interfaces have changed the way consumers are searching for information. In the future, advertisers will discover ways to advertise subtly through these methods by developing a skill or incorporating content into the query responses.

• Influencer marketing: Many national brands have discovered the power of social media or online influencers who can serve as spokespeople for their brand by representing it on their channels. What companies or partners might make good influencers for your firm?

Keys to Success in the Digital Marketing Era To succeed with digital marketing, remember to keep in mind your core customers, personalizing your message to fit their unique needs. Integrate your new marketing tactics with your traditional ones and tie them all to your operational and sales methods for greater success. And don’t forget to track your return on investment!

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As the pace of change accelerates, it can be challenging to keep up with new jargon. These days, people in many corners of financial services discuss a concept called blockchain, suggesting it will flip the financial industry upside down at any moment.

While nearly everyone has heard some rumblings about blockchain, it’s clear that many people lack a distinct understanding of exactly what it is, how it may affect our industry, and how quickly this is all going to happen. In this article, we’ll demystify blockchain and cut through the hype to provide a quick summary. 1 6 | w w w.oakstree tf un di ng.com • 8 4 4 - 3 4 3 - 1 4 1 1



What exactly is blockchain?

Blockchain emerged in late 2008 as part of another concept for a virtual global currency system that came to be called Bitcoin. To be accepted by business and consumers, that cryptocurrency required a safe, reliable means for issuance, transfer, and recordkeeping, and blockchain technology was the answer. 1 In simple terms, blockchain is a peer-to-peer network that uses the internet. It serves as a digital ledger of transactions that exists on the computers of participating members, any of whom can review past transactions and enter new ones, and none of whom can delete or destroy recorded transactions. As transactions are entered, they’re grouped in blocks, which are linked or “chained” to previous blocks. Those blocks and the links between them are protected by cryptography, making it impossible (at least in theory) to alter or forge them. 2 What makes blockchain particularly remarkable is that it operates without any kind of central authority or regulation. The ledger is open equally to everyone who participates in the market. Transactions are permanent and verifiable. Blockchain requires no broker, floor trader, or other intermediary to manage or delay transactions. 3 While that lack of central organization might unnerve those who find comfort in control and standardization, the nature of blockchain means that users in the network create its procedures, rules, and standards as it expands, reducing the potential for a bad actor or group to make malicious changes. Because the complete ledger is simultaneously housed on every computer on the network, the system is far more secure and resilient than it would be if data were concentrated in one location. If part of the network fails, the rest of the nodes keep the system operational. And while every transaction carries a digital signature with the user’s unique public key, that user’s private information is encrypted and available to nobody else. 4



How will it change our industry?

Even with recent innovations, the financial system is a fundamentally inefficient structure that mixes paper-based processes with industrial arrangements that are covered with a thin digital veneer. That system is also centralized, making it more vulnerable to attacks and more difficult to change. It’s only accessible to “insiders,” keeping billions of people from having direct access to financial tools. 5 Blockchain creates the potential for a system in which contracts and other financial records are stored digitally in shared databases that cannot be altered or deleted. That means every transaction and record would be maintained in a way that verified its accuracy and legitimacy. Individuals could conduct transactions and other business activities

without the need to involve intermediaries such as bankers and attorneys. Computers could transact business safely with little need for human interaction. 6 One consulting firm suggests that consumer use of blockchain-based applications could eliminate $16 billion in annual consumer fees charged by banks and insurers. 7 No wonder more than half of executives surveyed by Accenture expect blockchain to play a critical role in their businesses over the next three years. A Deloitte survey of global executives found than 43 percent identified blockchain as an important strategic priority. 8



When will this happen?

Already, large financial organizations such as JPMorgan Chase, Citigroup, and Credit Suisse are investing in blockchain technology. That may lead organizations such as yours to consider making blockchain a priority. 9 However, the hype about blockchain appears to be outpacing the technology’s practical development. Much of what’s being promoted as blockchain technology is actually existing databases that are trying to capitalize on the excitement. 10 In reality, observers believe that substantial transformation of the financial services industry by blockchain is many years away. Unlike disruptive technologies that attack and replace existing approaches, blockchain is more of a foundational technology that will gradually transform the economy, most likely in a gradual process that may take decades. For now, businesses like yours would be wise to monitor the development of blockchain and deepen your understanding, but hold off before making major changes or investments. 11 Footnotes 1 Iansiti, Narco and Lakhani, Karim, “The Truth About Blockchain,” Harvard Business Review, January/February 2017 2 Boersma, Jacob, “5 blockchain technology use cases in financial services,” Deloitte.com, undated 3 Iansiti, op. cit.

4 Hewlett-Packard Enterprise, “Blockchain in the financial services industry,” blockchainlab.com, undated 5 Tapscott, Alex and Tapscott, Don, “How Blockchain Is Changing Finance,” Harvard Business Review, March 1, 2017 6 Iansiti, op. cit.

7 ibid.

8 DiCamillo, Nathan, “Blockchain’s next big targets in financial services,” American Banker, May 21, 2018 9 Tapscott, op. cit.

10 Ito, Joichi, et. al., “The Blockchain Will Do to the Financial System What the Internet Did to Media,” Harvard Business Review, March 8, 2017.

11 Iansiti, op. cit.

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Ever-increasing competition: The toward the future In the changing financial services marketplace, firms aren’t simply competing against other firms in the same city or town, or with the same product or service offering. Firm owners today must have the right business practices in place to compete on a national and even global level. This involves finding innovative ways to attract and retain the modern client in these days of digital transformation. It includes automating processes and workflow to streamline operations. It even includes expansion and hiring practices. Firms who work to master the changing marketplace will race toward the future, while others will sadly get left behind.

How are you differentiating your firm from the pack? Has your business become stagnant, or are you advancing your business practices to compete? Knowing ways that you can transform your business can help you avoid this fate.

Appealing to Today’s Consumer

Human behavior has changed with the technological advances of our time. Therefore, as an owner, you must adjust your current business, marketing and sales strategies to make your business more attractive to customers. Some ways that you can address current trends and come out ahead of the game include: • Emphasizing your value: Price-competition, particularly online, has made the modern consumer expect the lowest price possible. Position your firm to compete by showcasing your value aside from price to overcome these price-wars.

• Providing instant accessibility: Whether it’s offering online quotes and applications or allowing customers to submit requests and handle customer service online, offering fast and easy service is the way of the future.

• Using the latest technology: Find ways to service customers using new, online tools that can improve the customer experience. Examples include CRM (customer relationship 8 | w w w.oakstree tf un di ng.com • 8 4 4 - 3 4 3 - 1 4 1 1

management), social media, online quotes, and customer service chat features.

• Keeping the human touch: Customers still look for advisors who understand their needs. Don’t abandon all your traditional methods of communication in favor of electronic ones. A well balanced customer communication strategy that mixes face-to-face communication with online interaction is key.

New Technologies to Help You Compete

Luckily, advancements in technology have enabled the modern RIA advisory firm to stay competitive and profitable.

Here are some ways you can keep up with the changes and maximize growth: • Digital marketing tools: Firms who use social media, blog regularly and give their websites regular content and design upgrades benefit from increased visibility and top-of-mind awareness among potential customers. New targeting tools even allow for advisors to customize advertisements by geographic, demographic and other profiles to ensure they reach their ideal customers. Investing in digital marketing makes sense for most firms because of the high return on investment from this low-cost promotional method.

• Technology for serving clients: A wealth of tools exist for advisors to service their clients better. These include VoIP technology, auto-attendants, web-based client portals, CRM, advanced phone systems, online data storage/retrieval, online quoting/chatting, customer service and more.

Discover gaps in your current customer service process and uncover tools that can help you sell and service your customers more effectively. If the thought of implementing these tools is overwhelming to you, start slowly. Begin by integrating one or two technologies into your operational

process, and you’ll start to see the benefits of the change in your business.

Hiring to Compete

Another way your firm can stay competitive includes hiring and retaining the best talent. Fresh producers will require all the latest resources at their disposal to succeed. If you offer new team members the latest software tools for selling and serving customers, you will give them an added advantage in the field.

In addition, providing them with training and opportunities for professional development will ensure that they can perform well and will thrive in your firm. Once you have hired your talent, it’s important to keep them happy and thriving so that they will remain loyal to your company. Ensure that they assimilate well with other members of your team and understand their role. Finally, make sure to mentor them and provide them with advice along the way, particularly if you are a seasoned advisor hiring a producer with less experience.

Mergers and Acquisitions

Depending on the goals of your firm, staying competitive may include opportunities to merge with, purchase or sell to another firm. Collaborating or acquiring another firm with a similar or complementary service or product line may give your company a competitive edge, while giving your customers added value.

Whether you position your firm to sell, merge or acquire another firm, some ways you can appeal to buyers and sellers include: • • • • • • • • • • •

Upgrading your technology Streamlining and documenting your operational processes Refreshing your brand/logo/marketing message Updating your website and blog Maintaining a regular presence on social media Conducting targeted marketing campaigns Staying active and involved in the community Hiring and retaining top talent Updating and expanding your customer database Maintaining optimal data security practices Analyzing and documenting your marketing ROI

Obstacles for Success:

Staying profitable in this highly competitive industry can prove challenging for some firms. Some of the obstacles many businesses encounter on the road to success include: • The cost of competing: Trying to manage marketing, adopting new technologies, new hires and acquisitions can be quite overwhelming for anyone. Working capital investments can take the pressure off these new ventures as it can free up resources for those investments.

• Time required to implement: Firms shouldn’t expect to change overnight. Hiring properly, improving processes, implementing new technologies and expanding your client base will take some time. If you are patient throughout the process, you’ll manage your expectations realistically without becoming frustrated.

•G etting your team on board: Educating and training your team on all the new processes, technologies and changes may prove to be a daunting task, especially if employees have done things the same way for some time. Hold a collaborative meeting to get everyone on the same page and explain

the reasons for the shift in processes and systems so that employees are more receptive to the changes.

Manage Your Growth and Master the Marketplace

Firms striving towards expansion in the next decade must do more than maintain the status quo. Employing any or all the following tactics will work to your advantage: • Learn from industry leaders: Look to seasoned firms in your area or even outside your area and learn from their successes.

Ask where they network, how they market their business, and what has worked or not worked in their firm. Contact them to gain wisdom on how to implement similar strategies in your business. Consider finding an advisor in another geographic area that is not competitive with yours • Continue to hustle: The best advisors maintain a go-getter mindset when it comes to selling, servicing and growing. Be on the lookout for ways to adapt to trends, new clients to attract, or new technologies or systems to implement to improve your firm and out-hustle your competition.

• Always be available: The best advisors are there when customers need them. Work toward building a relationship with your customers so that they know they can count on you when they have a question, and that you have their best interests at heart.

• Embrace digital communication: If your current processes don’t allow you to reach your customers online, or communicate or service them electronically, it’s time to upgrade your methods.

Customers seek to research, get quotes, manage their accounts, and submit service requests online. Make it possible for them to do so with Web technologies and electronic systems.

• Integrate digital and traditional: Even if you have started employing digital marketing efforts, make sure you are integrating these with tried-and-true, traditional approaches for maximum impact. And don’t forget adding a personal touch: customers may prefer to communicate digitally, but that doesn’t mean they don’t appreciate personalization or one-on-one time.

• Showcase your brand: Communicate to your customers and prospects why your firm is unique and what you offer. Be sure to include these marketing messages, unique aspects of your firm and your product differentiators in your marketing efforts. When you differentiate yourself from competitors in the marketplace, your customers will feel confident in their decision to choose you as their advisor.

No matter how competitive the financial services industry becomes, or how much technology improves the processes and ways of communicating, advisors must remain nimble and adaptable. Those advisors set in their ways may struggle to keep up with the changing marketplace but should take advantage of any opportunities available to move their business forward. Following some of the strategies above for hiring, marketing and managing processes will ensure that those firms have a chance to compete and thrive in the new, technologically-savvy economy.

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:industry news

Storm impact: tough for local economies, minor for the national economy Natural disasters have an immense impact and can destroy lives and wealth, and will affect local economies

Social Security income anticipated to rise, but is it enough?

for some time after.

The Senior Citizens League, a nonpartisan advocacy

can be measured

group, had projected a 3% increase in Social

through property

Security benefits for next year, but recent estimates

damage and lost out-

indicate the rise will more likely be 2.8%. Even

put. Hurricane Harvey,

though the recent estimate is down slightly, it is

for example, had an

still the largest benefit boost in seven years, and is

estimated $125 billion in property losses, but only $8.5 billion

based upon the increase in CPI-W, which measures

in lost output. The massive property damage spawned jobs,

price inflation for urban workers. Retirees should

spending on new cars and possessions, and grocery stores

see a real increase this year compared to previous

saw increased sales. The economic output may have affected

years, when the increase in Medicare premiums

Houston, but it was barely a blip on the national output of

nearly wiped out Social Security increases.

$19 trillion.

However, the national economy is almost never impacted. Why? Because storm costs

Small firm size is no excuse to fall short of cybersecurity expectations RIA firms, regardless of size, are all at equal risk to the threat of cybersecurity, and are all responsible to protect their clients’ personal information. Any firm can build a cyber plan using the 4 A’s: • Acknowledge the fundamentals of cybersecurity • Assess the risks, both internally and externally, with complete honesty • Address the issues identify through the assessment • Ask the “what if” questions to prepare for contingent situations 10 | w ww.o akstree tf un di ng.com • 8 4 4 - 3 4 3 - 1 4 1 1

RIAs are in, but are brokers out?

Between the 2008 financial crisis and the enablement that technology brings, the freedom for advisors to shuffle between firms really exploded.

A good grasp on your goals can reduce disruption during tech upgrades

In fact, 23% of advisors moved wirehouses or started independent wealth management firms between 2012 and 2017. However,

Tomorrow inevitably means another day, another dollar… and new technology will hit the market. With ever-changing and increased options from which to choose, the task of upgrading software to remain current can be daunting. But, since 70% of financial services customers want a combination of digital and human investment tools, firms need to consider the implicit value of upgrading. Some advice: keep your focus. “I would go back to the strategic conversation,” said Angela Pecoraro, CEO of Avicent. “What is the firm attempting to do? Really understanding what you’re trying

in 2017, three large firms withdrew from the protocol that had governed the process for advisors switching firms since 2004.

Autonomy, the opportunity to serve clients in their best interests, and being held to a fiduciary standard are just some of the reasons that RIAs are becoming more popular with clients, resulting in the withdrawal that may have come too late. Will RIAs have 28% of the market share by 2020, as predicted by Cerulli Associates? Only time will tell.

to do…should lead you down the path to get started.”

Get ready for the “markets of one” Based on data and analytics, Netflix® can now suggest media, Spotify® can influence music choices, and Amazon® can provide shopping options.

Consumers today are accustomed to a tailored experience that meets their needs. It’s no different in the financial services industry. These deep and insightful tools have shaped customer perceptions and expectations, and each person is now a “market of one”, freeing him or her from the impersonal feeling of conformed products. Some advances to products have been made, like the ETF industry, but all wealth managers can expect not only better solutions but also the experience of consuming the solution to be better in the near future.

http://www.investmentnews.com/article/20180914/BLOG05/180919949/2019-social-security-cost-of-living-adjustment-now-expected-to-be-2

https://www.wsj.com/articles/big-storms-leave-small-marks-on-the-u-s-economy-1537027200 https://www.thinkadvisor.com/2018/09/17/how-to-fight-the-cyber-war/

https://www.financial-planning.com/news/wealth-management-technology-upgrades-to-tech-stack-robos

https://advisornews.com/oarticle/the-shifting-landscape-of-financial-advice#.W6AK2FVKjmE

https://www.financial-planning.com/opinion/why-disruption-is-a-better-fit-for-wealth-management?tag=00000153-a420-dba7-afd7-a77dbdd10000 844- 343- 1411 • w w w. o a k s t re e t f u n d i n g.c o m | 1 1

Kirsten Petras, Executive Director of Sales Kirsten Petras is the Executive Director of Sales at Oak Street Funding. If you need capital to support your RIA business goals, we encourage you to connect with Kirsten. Here, she shares her thoughts on the impact and influence of disruption in the financial services industry, specifically RIAs. The theme of our Fall edition is “Destination: Disruption.”

How have you adjusted to disruptions that have impacted Oak Street Funding?

We’ve experienced exponential growth in all our channels, but especially so in the RIA channel. With that growth has come challenges to our systems and processes, and we’ve needed to come up with the most consistent and effective ways to reach our clients.

We’ve adjusted staffing, training, technology, and company culture needs as we’ve evolved from a small company to adopting enterprise company characteristics. How we face those challenges as a leadership team assimilates the change. Leaders have to adapt to the changes they expect, and teams adapt faster if they see the leaders embracing the change.

Having transparency with the team regarding when and why they can expect certain changes to occurwhether it’s with right sizing of our team for expansion, rolling out enhancements to our proprietary software, or meeting the day to day needs of our clients- is important to keeping our team focused on the goals of the organization, themselves, and how they can be the best teammates to those around them.

What disruptions are having the greatest impact on your RIA clients?

The flurry of activity around mergers and acquisitions in the RIA industry is vast. The disruption of this M&A activity is not just that you won this 12 | w ww.o akstree tf un di ng.com

Having a strategy or plan can help prepare for and reduce the impacts of the disruptions that will inevitably occur with an acquisition.

acquisition at the best price, but that your success is dictated by the retention of clients, and there isn’t as much focus on the retention of key employees.

The greatest disruption comes from a lack of planning that has measured milestones and goals.

Without a plan, I’ve seen business owners struggle with the effects of unplanned disruptions, including: • Maintaining or redefining company identity • Full integration of or redefining the staff to one vision and culture • Lack of overall vision, or not articulating it • Loss of talent, due to a lack of path for employees or understanding of their impact and importance to the company • Not fully understanding where the clients relationships lie and the possible loss of talent and clientele • Not keeping morale front and center, resulting in a loss of clients • Defining the roles of retiring shareholders/empowering the next generation

How can Oak Street Funding help RIAs adjust as disruptions impact their business?

Because we are a portfolio lender, we have the flexibility to categorically support them. Our lending box has ‘soft sides’ and provides us the opportunity to tailor the loan to address shifting needs and structuring complex deals.

Additionally, we have a great team, with people who understand the industry and approach our clients with a relationship-based lending model.

They actively listen to our clients pasts, present, and future. Our team gets to know our clients, we speak the language, and we understand the nuances that could be vulnerabilities, as opposed to bankers and lenders who don’t understand the cash flow lending needs to optimize the firm’s intangible assets.

Once we’ve developed these great relationships with RIAs, we’re then able to really help them realize their goals. We know our clients, we know what they want to do, and we discuss the steps they can take to achieve those goals. And when a disruption comes flying in? We’ll be ready to help them adjust.

Are you ready to connect with Kirsten?

You can reach her at kirsten.petras@oakstreetfunding.com or 317-428-5156.

Park Sutton Advisors is your strategic partner for RIA M&A, valuation, and succession planning Park Sutton Advisors is a leading investment banking boutique that specializes in the financial services industry. With over 70 years of aggregate experience, our senior team has worked in many facets of the financial services industry.

Advisory services encompass: • Mergers and acquisitions • Divestitures • Strategic alliances • Joint ventures • Capital raises • Valuations • Fairness opinions • Succession planning • Expert witness testimony • Other strategic consulting projects

has acquired

CACEIS North America a subsidiary of

has been acquired by

We served as exclusive financial advisor to Peapack-Gladstone Financial Corporation

September 2018

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We served as financial advisor to EP Wealth Advisors, Inc.

July 2017

We served as exclusive financial advisor to CACEIS.

May 2018

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We served as the exclusive financial advisor to Fifth-Third Bank

January 2017

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ParkSuttonAdvisors.com ∙ 646.727.4825

As an RIA firm owner or salesperson, have you been stuck in the status quo? Have you been working in your business the same way you have for years? The market is changing, and so are your customers. The time has come to step out of your comfort zone and experiment with some new strategies for growth. But for some, fear of change keeps holding us back. What is it about fear that keeps us from moving forward and trying something new? Let’s explore the psychology of our fears and how we can overcome them to implement lasting changes.

Why do we fear change?

We like to be in control: Because we’re comfortable where we are, a lack of change may simply mean we feel more control over our environment and our business processes and practices. For example, in the past, everything has been organized and filed in the same place. We follow the same paper trail for new clients. We use the same method of selling to customers and following up with them promptly. What could change in this scenario to improve our outcome? For starters, a new data entry or CRM system could better capture customer data and make sales and customer service staff more organized. It could help identify upsell opportunities or help your firm send more targeted marketing campaigns. This could result in increased sales, better satisfied customers and improved loyalty. An electronic system could store customer data where it is easier to access and keep confidential information safe from attack. Instead of fearing change in favor of control, try making small changes that allow you to maintain control over your overall business operation, slowly modifying it to achieve the results you want.

We fear failure: Another reason we may shy away from making change could be a fear of disappointment if things don’t work the way we planned. Perhaps we invest in new technology that becomes challenging to implement. We worry it won’t work properly or that we don’t have the tech savvy skills needed to make it a success. Or let’s say you decide to send out a new advertising campaign to a new audience. What if you spend hard-earned dollars on the campaign and it produces lack-luster results? Is the lesson never to try? No, because sometimes change requires trial and error. We may not achieve perfect results the first time we attempt something, but the process of working through the challenges that come along with change will help us adapt and arrive at the best result. Positive change is worth the risk. Learn from others who have implemented the same change successfully.

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We lack the time to focus on change. In today’s ever-busy world, many business owners are overworked and overstressed. Therefore, tackling a new trend or implementing a new procedure simply gets pushed to the back burner. This can be okay for a while, until competitors start invading our territory. Those firms who focus on implementing change will move ahead much quicker if they are paying attention to trends in the marketplace and looking for new technologies to make their firm nimbler. It’s worth the effort to stay on top of opportunities for change or growth, and to take the time to implement the ones that will give your business enhanced market share, or offer your customers needed value.

While RIA firm owners train themselves to be risk-averse, in the world of business survival, sometimes these decision makers must take risks and try new things to succeed. Take the time to pay attention to trends, listen to what your customers want, and identify opportunities when they arise. Then take a chance by implementing new strategies that will move your business forward. Remain persistent and patient as you adapt to change in your firm, and never lose sight of staying a trusted advisor to your customers. This will help you achieve the right balance of traditional and new business methods, and eventually your business will evolve and grow more than you could ever expect.

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