Advisor Stories: Going RIA with Chris Cousins
I am Shauna Mace, head of Advisor Services at SEI. Our mission is simple. It's to help you and your clients build brave futures through the power of connection. And that means connecting you to actionable practice management tools, insights, and people. And the expert joining me today is a financial advisor, Chris Cousins. He is the president and co-owner of Financial Architects Inc. Which is a wealth management organization. They manage over $200 million in assets under management as part of their RIA entity, which is FAI Inc. So we're going to call them financial Architect for the conversation, but in their RIA entity, it has existed in the background since 2006, but in July of 2022, Chris and his 17 person team decided to go fully RIA. They moved over 700 accounts and the majority of their clients' assets in 60 days. That's incredible. And we really want to hear how you did that and those lessons learned to fully go RIAand build financial architect, the RIA. So Chris, we would love for you to tell us your transition story.
Okay. So I guess maybe we start with a little bit of background. We always, from our inception in 1985, we're the second generation of this company. So Patrick and I bought it in 2018, but we always existed as a broker dealer business with an insurance component. In fact, we were a general agency for a while, quite a number of years. And so being in that insurance company, broker dealer world, and essentially what happened was 2021 timeframe, the insurance company that we were working with and connected with went through a fundamental change and it was not going to be workable for us. And so we had to make some changes fairly quickly because of the way that it all went down. And I will say that becoming an RIA was always our eventual plan to move away from the broker dealer space, but we had to do it with 27 days notice because of the contractual things that happened. And so that sent us into our transition as you described, and a lot got accomplished in a very short period of time and we're still here to talk about it.
So you survived. How did you do that? It sounds like you were always planning on your end goal, building an RIA firm. Obviously that was expedited. Where do you start when you have 27 days to make that transition? Yeah, so fortunately it wasn't our long-term goal to do this. It was actually coming sooner than that. And we had actually talked to the broker dealer head and let him know that maybe a year from now we're going to start making this transition. But it was about halfway through that that some things happened and we found out our timeframe was 27 days until we had no access to our client information at the other custodial platform. So how we did that, our team, I think it's a story of teamwork. Our team saw that I was completely distressed. I was in a state of shock that day, July 13th, I'll never forget it. And I was in a state of shock, and our team actually rallied around that and said, let's do this. And so we started changing some processes. We just essentially got together and did it. And there's a lot that went into that, but it happened because of that team effort.
Yeah, that's really important is, and you mentioned to me when we were talking earlier about this idea of everything stopped and we really had to refocus all of our energy and efforts around the transition. And you obviously were able to do that and you survived and are here to tell the story. But what are those, so your team rallied around you where there's certain key individuals or functions that related to your ability to prepare and then actually make that transition, all the different steps, the client paperwork, the communication, all the things that you need to do to make that transition. What are some of those key functions and roles that really are important for you? Well, so we have one of our members who was head of really securities transition securities, actually administration. She was heading up the securities when we were with broker dealer and she's, she's been through a transition before. So that was very helpful for her to, I think pull that memory out of her memory bank and get into that mode. And then one of our key client relationship coordinators, longtime team members, 16 years on the team, really knows the clients', cares about the clients, and was able to keep that at the center. And that really is where that energy went. And I'll say there was a couple things that we changed immediately. We would have regular meetings as an operational team, but we went to a daily meeting and that daily meeting of 30 minutes I think saved us because issues didn't last for more than 24 hours or 48 hours at the most.
Yeah, that's great advice. And was there in that daily meeting, was the securities person, was there an individual who was really navigating and running that meeting and how do you keep organized all of the logistics and obviously use that time well to navigate issues and logistics that were coming up? Yeah, well, it was wonderful to watch them do their thing. So you had the person with the securities background and then our other team member on the client service side, different views, but always considering what's going on and making sure that we weren't missing something. We made lots of mistakes. I mean, it was tough. It was really tough. But we had advisors of course in the meeting, and so everybody got to have input and really the cohesiveness of the team really was everything.
Yeah, that's great. Great advice again. So one of the things we talk about is make sure you have ownership of certain things. And I love that you have two different perspectives looking at this transition from different ways, but have ownership check in regularly, make sure you have some centralized probably document or way in which you're organizing the timeline and all the things you need to do because it is possible. You just got to keep you organized and keep moving forward. So your team was all in the loop. What about when you were communicating the change to your clients? Again, short timeframe, how did that go? What did you do to set yourself up for success? Yeah, so one of the things that we let our clients know is the reason why we exist. We exist to help people live a life of freedom. And we do that through reducing the complexity of all their money decisions. So we needed to show them, I guess we use a word around the office called enrollment. We needed to enroll them in our future and not focus on the change that was being made. Fortunately, SEI's platform was something that we were talking about in terms of a major improvement to the way that we were doing things, a technology upgrade, a simplification of the RMDs and all that stuff. So we were able to talk about that as the solution, but we just kept, it was critical. I say enrollment, we had to enroll them in the future of where we were going and when they felt connected to that, it was really not really that challenging and everybody came with us. So almost everyone.
So what you say matters and how you say it and position it in a way that's relevant to them in a way that they can kind of buy into. Was there any advice on how to actually communicate? I mean, did you start with an email? Do you do phone calls? What was the format? Yeah, the individual advisors would typically the ones that they know, their client relationships. So they were on the front end of that talking about it. And again, we were starting to plan this already before the emergency. So we had already had, I would say our story clear, our message was clear, but yes, it was setting up meetings with people. It was sending mass emails to let them know what was going on, to let 'em know that we were going to lose the information as of a certain date. So we had to let them know, let clients know that we weren't going to be able to see their information.
So as gotten to know you, Chris, and I knew you as you were working through this transition with SEI, going RIA, one thing that has always stood out to me is your just role as the visionary in your business. I know you use EOS, the entrepreneurial operating system framework, and you're absolutely a visionary by all standards of the definition that they use. You've mentioned to me that you really have this mindset of business owner versus just financial advisor talk. I would love for you to share why that mattered as you, and again, I know this was something, it sounds like you were planning, but then it got expedited. So why was that so important to have that business owner mentality before, during, and now after you've made the transition? How has that really helped you evolve the business but also come out of it alive and also come out of it with a lot of momentum? Yeah, I guess it helps me focus on the larger picture so that we can see that this is a transition we need to get through and here's why be it to be able to explain that. So I guess understanding the vision that we have makes it very easy to communicate to people and people want to be, they've trusted us with their wealth decisions. We want to be together. We want to have a relationship with their family and they want to have a relationship with us. Like anything kids, anything else. If we don't paint a vision that's big enough, it's not inspirational. It doesn't drive people to want to go that direction. So that was important, just not during a transition. It's important for the entire life of our company. And I think there's a number of financial advisors that probably see themselves I have for a while, which is I'm more of an entrepreneur who happens to be in the wealth management space rather than a financial advisor because eventually I may not do that role. And I love this industry and I love our business.
Well, and I think that's a really important, I don't want to say requirement, but it's absolutely helpful as you do if you are considering building your own RIA, it is building your own business. So really having or being willing to have the ability to put different hats on depending on what the business needs and what your clients need and what your team needs and what you need is important. Certainly there is different sort of complexity going RIA versus being in an affiliated or employer model. Were there any things that you think were really important to, again, your ability to set up this business in the right way, that when you put your business owner hat on, the things that you thought were really important that you thought through or really kind of worked through together with your team or with other experts, what are those things if you are going to go RIA, that people should be kind of paying attention to? Well, yeah. So I would say set the expectation that you may learn more in two years than you've learned in 10. That would be a proper expectation. Understand that there's a lot of this that you don't know, that you don't know. And so it's why it's important to rely on team members. I would say SEI's transition team was phenomenal. Oh my goodness. It made everything, it gave us a lot of confidence, a lot of security as we were going through this, and we had to rely on them a ton. And so we appreciate that. But our team and just keeping everybody together, I would say, and it's back to this vision thing again, understand where you're going and is the RIA fit for that vision? In some cases, it's not. In some cases, a lot of cases advisors want to finish in the broker dealer model. That's fine. That just really wasn't going to be us. And I think as I've talked to you about, we've got a couple of these other operations, the business exit planning company we have, and that was becoming a little challenging for a compliance department to get their head around. So it made sense for us. And I would say my advice would be just really understand your business model and is the RIA direction and fit for you and why? And then talk to others. Talk to others and pick their brain.
Yeah, that's why we're having people like you on because I think it is, it's those stories. Why did you choose to go RIA? What were those lessons learned? I'm actually interested. What were, you said there was a ton of lessons in two years, so what were some of your top three we'll say takeaways or lessons learned over that two year period? Oh, boy. If you think the worst can't happen, it can. That would be a big takeaway. And you'll survive, right? Yeah. One day at a time when you're going through a transition like this, even if it wasn't an emergency like us, but even the transition itself, it's very tense. And I think one of the things I learned is that to pay more attention to the pressure that our people are going through, that's a big takeaway for me that I've really just got to keep that in my mind for the rest of the time I'm helping to run this company. So other than that, rely on your partners and just keep learning. It's a giant learning curve, and you'll be stronger on the other end of it. But yeah, I know you're a learner, you asked so many great questions, at least when we were working together throughout the transition around organizational structure and really not just heard, I think listened to some of the information we shared, but put it into action.
One of the things you shared with me when we were prepping for this was that this was this transition, this two year period really forced change on the organization and made you more of a team. I think you're always ready for change yourself, but your team is more open to it. Can you speak a little bit about how you benefited from all being in this pretty vulnerable transitional state, the impact, not just making the transition, but there were a lot of other things you changed too, and it sounds like it was almost like you were ripe for it. You were ready for it, right? Yeah. We had done some technology upgrades on the CRM side and those we had intended to do for a while and really hadn't gotten to it yet. And so some of those changes really had to occur at the same time going virtual, what you DocuSign type stuff. Critical. So yeah, nobody likes change. We only liked the result of change typically. So we had to again, keep talking about what's the result of this change when this is done, what does it mean for your workflows when this piece of technology is in place, what's it going to do to this process that we've always done and what hours are being saved there? And they see this because all of our team members are very smart people. They can see the opportunities and if they keep that opportunity big enough, they'll get through the uncomfortable part of the change. That's just really the way we are all wired. Having real clarity of what's the benefit, what's the end goal? Why are we doing what we're doing?
Yeah, makes sense. The other thing you shared with me that I thought was really interesting and insightful was you intentionally, when we were going through the transition, you really put a pause on development efforts. You were just focused very much inwardly on your clients and what ended up happening as a result of that? Well, yeah. So with the SEI platform and the improvements that we were able to talk about versus where we came from, there's other assets out there. As we were able to increase the size of that relationship our focus is planning. So on the planning side and the insurance side, there was just these conversations going on because of this change. So it really allowed us to get even closer to the client to really focus on the details of these changes. And I think it enhanced the relationship and that's still happening today because there's more technology that we've now rolled out and the client relationships are getting even better. I would say on the growth side though, it is a result of going through this type of change that you do put all the energy into maintaining these client relationships and get those assets over. And it's a little challenging to now shift and go back to that growth mindset, and we're in that now, but I just being honest, I'll say it's not easy. It's not easy.
That makes a lot of sense. And it's funny, it's almost like phases in life. You have to focus on certain things at certain times, and when you mentioned to me that you really said, we're intentionally not going to be focusing on development, we got to focus on supporting our clients through this transition, and you ended up growing in assets from your clients, which I thought was brilliant. Where you focus tends to grow if that's what you want. But to your point, one of the things we talk about with firms that are going through any sort of transition is making sure you have clarity of what the future afterward looks like too. Because at some point you are going to have to shift your attention back or in a different place, and then we're being ready to make that shift again. People don't like change, so we like to stay where we are. So having that clarity and plan in place and tactics and the strategies you're going to use can be so helpful in making that transition and bringing your team along. Exactly. There's a piece of this that's in the advisor recruiting. So for those advisors that are adding advisors to their team, we needed to make sure we weren't bringing a new advisor into chaos. We could have, you can do that. It is an option, but is that really going to work for them? We wouldn't even feel good about that. So now we're to the place where now we can bring them in and our systems are, because of all the focus on operations, our systems are far better than they were. Yeah, that's great. Again, use the chaos in the transition to lean into it, make the changes that you need to make to improve, to set yourself up for future success.
So if you look back, vision looking back's always 2020, you know what you learned the mistakes, you know the lessons. What would you tell someone who's either considering making a transition to build their own RIA or maybe is in the midst of it right now, what advice would you give them that maybe you wish you had when you were starting this journey? Yeah, so understand, as we've talked about, is your direction clear? So do you have a vision for the business and can you clearly articulate it to your team because they're about to go through a lot of changes that they don't really want to do, and can you articulate that direction to get them through the forest? So that's one thing. I think another thing is talk to as many advisors as you can, peers. I talked to some, but I would've benefited from really digging in with a number of very successful RIAs. And again, I did have some, but I would've benefited from more. So I would say do that as much as possible. Get as many diverse opinions you can and from different types of business models as well. Then finally, if you're the leader of the business and you've got a number of people in the business, check yourself. Are you the leader you need to be? Most of the time we're not, and we've got some inflection to do. There's a great book called Leadership and Self-Deception, one of my favorites, and it really positions the mind to understand how are you leading and what do you need to do to really lead people to where you can go?
Well, that is great advice, Chris. There is so much I continue to learn from you, and I love this concept of learning from others. We totally agree. We actually have an RIAcommunity at SEI and a number of those community members. All of them probably have gone through a transition in going RIA. So really it is you learn and learn so much from the paths of others as long as you're willing to ask. Well, I want to thank you for sharing the insights and learnings and lessons that you had on your journey. Your ability and your team's ability to make the transition and come out the other end so quickly is incredible. These things are not easy. I have no doubt that your leadership was crucial in helping your team rally and do the work that you all needed to do to make the transition. We're very grateful that you did and that you shared your story today. So Chris, thank you so much for joining us. We have a number of resources if you are considering building your own RIA, available at SEI. Chris mentioned some of them like the Transitions team, but we also have educational resources to help just provide some guidance as to what does this journey look like and is this the right path for you? It may be, may not be. But again, Chris, I want to thank you for joining us and sharing your story, and again, we'll continue to learn from you in the future. Thank you.