Platt explains that team leaders and members participate in firm-wide discussions about updates, upgrades and mergers. By allowing more people to engage in these discussions, the firm gathers as much input as possible, builds trust among different teams and between the teams and the central organization. The approach also creates realistic expectations for everyone affected by changes. As Coldstream grows and adds new teams, there are more opinions to hear.
“This process builds that trust that we’re not just a big brother, we’re a partner engaging in a dialogue with our teams and talking about the pros and cons of switching technology or processes, what they need to do, and if it will benefit them or all of our teams,” Platt says. “They appreciate having that conversation at a detailed level, instead of [the firm] just telling them that they’re on our team now and need to do things in a certain way.”
The teams can also lean on one another’s expertise. For example, some of Coldstream’s advisors specialize in disability planning and offer what the firm has named Disability Advisory Services (DAS), while others specialize in ultra-high-net-worth private client services, and a third channel specializes in women’s advisory services, called Women’s E.D.G.E. for “Educate, Develop, Guide and Empower.”
Platt also explains that Coldstream has had to strike a balance between the standardization of its practices across the firm and the desire of most advisors to work autonomously and innovate.
“We’re learning that as you have more teams, you need more flexibility because it gets harder to support them,” Platt says. “On the other hand, when someone experiences turnover or is short-staffed, other teams can help out. But only to the extent that their processes and file systems are similar. One advantage of a bigger firm is [there are] more resources and people to help out when a team is short-staffed, but issues like having disparate ways of filing things and naming of files inhibits working together.”
Seizing The Opportunity With Women
In recent years, diversity and inclusion have been a point of particular emphasis for Coldstream. In some ways, however, it’s been doing the difficult work of creating a more fair, equal and just wealth management firm since its founding, particularly in hiring and promoting women among its advisors, staff and leadership.
“We think the industry is missing the boat with women,” Fitzwilson says. “Women outlive men, but the industry is so geared to serving males that firms haven’t been able to figure out how to address the market opportunity with women. We feel like the firms that win will be the ones that work with women.”
Harris says that Paracle’s staff was more than 50% women, and that it reached that goal unintentionally simply by looking for the best people available. Today Coldstream has a goal of maintaining at least 50% representation by women in its advisor and leadership teams.
Stonich says that the effort doesn’t stop there, as Coldstream is working to amplify the voices of women and diverse populations whose contributions might otherwise be glossed over.
“There are ways you can put those biases to work, like making extra sure to solicit feedback, especially for people who are not raising their hands,” says Stonich. “Coldstream also does a great job of making sure to value every contribution to the firm, whether it is lower impact or higher impact, and encouraging leadership across the firm.”
Growing As An Independent
“Our focus has been on both inorganic and organic growth,” Fitzwilson says. “Our business plan hasn’t really changed since we bought ourselves out from Boston Private. We want long-running top-line revenue growth, with an objective for half of that to come from organic growth like client referrals and center-of-influence referrals, and the other half through mergers.”
Coldstream took a three-year break from mergers and other forms of inorganic growth in 2018, 2019 and 2020, Fitzwilson says, but it has completed two mergers this year (including Paracle) and is on the lookout for new partners.
Coldstream maintains it isn’t looking for just any advisor. “When you look at great organizations as a whole, none of it works without great people who are a good cultural fit,” Harris says. “Without those traits, I don’t think the conversations go as well or that the relationship has much potential to work. You have to get those things right—and then there are obviously 15,000 other variables that have to come into line as you do due diligence, but all of those things are secondary.”
The most important elements Coldstream seeks in a cultural fit are a potential partner’s independence, willingness to collaborate and a dedication to building a fun work environment.
“The biggest way we continue to grow and transact business is by looking for entrepreneurs who see the benefit of staying 100% employee-owned and independent,” Fitzwilson says. “You’ll find a lot of people who profess that. That often comes up when there’s misalignment between advisors and owners and things don’t add up. Those people are out there, more people like us, and we’re going to find them.”