Joe Duran on raising billions in AUM, spotting trends, and the future of advice. (Recorded March 2015)

Building one advisory firm with billions in AUM is hard enough. Joe Duran has done it twice, most recently selling United Capital to Goldman Sachs and becoming Head of Goldman Sachs Personal Financial Management.

We had an insightful conversation about how he did it and what he sees for the future of financial advisors and for the advice they deliver.

Joe Duran

  • Managing Director Goldman Sachs, Head of Goldman Sachs Personal Financial Management
  • Founder/CEO of United Capital
  • Author of three books, including a NY Times bestseller
  • Frequent guest on CNBC, FOX Business, Bloomberg TV and radio, CNN
  • Former president of GE Private Asset Management
  • Hot yoga enthusiast

Show Notes

– When I asked Joe what enabled him to build two multi-billion dollar investment advisory firms, he said there were three things. First, “I care deeply about making an impact on the world.” Second, he acknowledged the importance of getting in front of a big trend. And third, “I’ve surrounded myself my entire career with amazing people who buy into whatever it is that I see the future looks like.”

– To spot these trends, or swells as he calls them, he says there are three steps. First, “Put yourself in the shoes of a consumer” and see the problem from their perspective, not through the lens of a businessperson. Second, “Identify very clearly how you would fix the problem.” And third, “Answer honestly whether you have the resources and ability to fix it.”

– Joe is not fond of the term “wealth manager.” Read why in my earlier blog post.

– How do you scale your business and go from 300 clients to 1,000 without having a drop in quality? Joe says you have to “Create scale in the interaction with the client so you have no drop off in quality and this means that the client has to participate; they have to drive the process.” He describes how in the podcast.

– Charging a fee for advice and clearly telling the client that 50% of their AUM fee is for financial advice/guidance and 50% is for investment management/selection is one way United Capital emphasizes the importance of advice relative to investment management.

– As a warning shot, Joe said the business is changing so quickly that what got you to where you are today will not work over the next five years. He shares how you need to change.

– Since they’re two different skill stets, Joe recommends you split the sales and advice function. Let sales people sell and financial advisors advise.

– Whenever Joe gets stuck he asks himself, “Why am I not more successful?” and follows that with, “What am I doing wrong that’s caused us to not be even bigger?” How would you answer those two questions?

– From a time allocation standpoint, Joe spends about one third of his day on internal/external communication, one third on idea creation and refinement, and one third on allocating resources and solving problems. When his firm is 10x bigger he doesn’t expect that allocation to change much.

Advisory firms in the $250 million to $2 billion range are “in the riskiest part of the market because they have the worst of all worlds,” says Joe. He explains why in the podcast.

– Have you hit a growth ceiling? “If a business hasn’t grown beyond a certain level, it is always because the guy or gal at the top simply will not expand the base of decision making.” Time to look in the mirror.

– Here’s an eye opener. Joe said, “The more important you are to the business, the less valuable the business is.” What are you doing to make the business less dependent on you?

– Having great people is critical to growth. “We’ll only be as big as the people on the team and as big as the choices they’re willing to make.’” Are you hiring people better than you and empowering them to be decision makers?

– On the podcast, Joe shares the story behind the Albert Einstein quote that has driven everything he has done in his life…and it’s quite powerful.


Joe on Twitter

“The Money Code” by Joe Duran (book)

Goldman Sachs Personal Financial Management

– Values Clarification Toolkit Click here to download this FREE tool and start living your values.

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