Keeping It In-House

Make Way For The New
The two years leading to 2014 were a critical period in Halbert’s plans to remain viable and sustainable far into the future.

In 2012, it named Williams, Spinelli, Kiemle and three others as directors. All of them have dual roles of heading their departments while either serving on client service teams or other operation functions.

“It wasn’t like we suddenly told people two years ago to step it up,” Abusaid says. “All of those folks already had a niche carved out at the firm; they just weren’t empowered. It was as simple as saying, ‘Guys, we’re going to name you directors.’ We laid out what we’re trying to accomplish, and we moved forward.”

“We try to act more like mentors than as bosses, but it doesn’t always work because I’m old and JC’s been around a long time and we’re the boss,” Hill explains. “But increasingly, they’ve been able to run their respective functions and divisions, and to work together as teams. We think it’s great.”

He adds this new leadership group so far has worked well with the roster of seasoned managing and regional directors who’ve generated a lot of the firm’s clients through the years.  “Their actual authority is quite high because they’ve earned the respect of the regional directors,” Hill says. “I can’t think of anything in the past year or two where anybody has crossed them. I think the regional directors have a great deal of respect for them, and they understand how good they are.”

Hill says Halbert is in the process of transitioning all of the relationships with custodians and product providers that he’s developed over the years to other people. “Some of our longtime vendors now deal with Brian [Spinelli],” he says. “Fidelity now deals primarily with JC and Cecilia [Williams]. Our marketing people mainly with Kelli [Kiemle]. I can still be in the company picture over the next several years, but I don’t want to be in front of it.”

And as Hill passes the torch, he and the company are working on the financial aspects of the transition. Hill’s equity stake is just north of 50% and is being diluted through an incentive equity program, along with a shift of voting versus economic interest for estate planning purposes. Currently, Hill is the super-majority voting shares owner.

Halbert also is investigating revenue-based financing. For example, it says exchanging equity shares for some limited participation, preferred shares could create an attractive combination of long-term, reasonably priced capital for the next generation and an income stream for the shareholder(s), presumably Hill’s estate. The much trickier issue, both Hill and Abusaid say, is how to persuade or help Hill to exit if he is disabled and does not know it or admit it. They say they’re exploring all of their options regarding that matter.