Investing in Our Future: Our Clients and Our People

2008 was a remarkable and challenging year for our industry to say the least, and it was especially challenging for the people of our firm. In addition to proactively addressing the client service issues and opportunities that were created by the worst stock market decline since the Great Depression, we were also in the middle of making a significant investment of human and financial capital in our collective future. We took a fresh look toward improving virtually every aspect of our business so we can continue to provide highest quality client service for the very long term future.

When we started 2008, we were known as Kochis Fitz/Quintile, two newly merged firms who had a strong sense of the benefits our merger would produce:

• Breadth of human capital and client service capabilities well beyond other firms in our industry


• Unsurpassed career opportunities for our people


• Scale to enable indefinite independence; and


• The leadership and experience to optimize the collective talents of our organization

As we end 2008 and begin 2009, we are now Aspiriant, a firm that is frequently acknowledged as one of, if not the leading independent wealth management firm and the standard bearer for the successful wealth management business model. This amidst the wreckage of other financial services business models whose flaws have been exposed in this exceptional environment. We have accomplished a lot this past year and we are proud of our efforts.

As we celebrate our one year anniversary, we thought it appropriate to look back on our first year together and share with our clients and friends the progress we have made and give some insight into where we are going in 2009.

Over the past year, we have focused on improving several key areas of our business:

• Client Service Offering


• Investment Platform


• Governance


• Management and Administration

Initially, we used a series of committees that were co-led by senior people from each predecessor firm. These committees were empowered to create solutions for the organization that were then further vetted and approved by a joint thirteen person Managing Committee (MC). This MC was deliberately larger than what we know would be effective for the long-term, but we believed it made sense in the early stages of our development, and the broad participation did help to improve the integration process.

Firm Strategy

During the first few months of our merger, Aspiriant’s senior management established the firm’s long range business strategy:

We also committed to grow our net earnings by a substantial annual measure while maintaining significant net margins. We believe that this commitment to success as a business enterprise represents a fair balance for the beneficiaries of our organization: clients (fair fees for highest quality services), people (enabling us to recruit and retain the very best people in the industry), and our owners (maintaining enterprise value and cash flow to transition ownership throughout the generations of owner-operators and thus remain permanently independent).

Core Values

Tom Tracy and Song Park led a committee to identify our shared values, one of the most important early joint efforts of our integration process: documenting those values that Aspiriant authentically exhibits and weaves into the fabric of its client service and business decision-making.

Distinguishing us from almost every other firm in our industry, we place a very high value on our independence, commitment to innovation, intellectual honesty, career opportunity for our people, leadership in our professional community, and our belief and our practice that every client is a client of the whole firm and not of any individual member of the staff.

Governance

Broadly distributed ownership was one of the most important objectives of our merger and is a strategy that supports three of our core values: remaining independent indefinitely, providing career opportunities for our people, and demonstrating leadership in our professional community. In order to sustain a large and diverse group of principals, capable of circulating ownership from one generation of professionals to the next, we needed to establish an effective governance structure; one that clearly defines the rights, obligations and privileges of share ownership.

During 2008, the Board, chaired by Mike Fitzhugh and including the other elected members, Ken Anderson, Karen Blodgett, Greg Schick and myself, worked with our CEO, Tim Kochis, to help clarify the respective roles of the Board and of management, and clarify what it means to be a shareholder in an environment where we attempt to clearly distinguish ownership rights from management authority.

Management

The respective firms’ management structures were very different before the merger and required a transition period that ran throughout 2008 before it could be fully integrated. During 2008, Tim and I worked closely together to harmonize and streamline our management structure in two stages.

The first was completed in July, after we had clarified our firm strategy, and made some important high-level decisions about the client service offering and investment platform. In this first step, we reorganized the client-facing professionals to better align people’s roles and responsibilities with the firm’s long range objectives and harmonized job titles across the firm.

The second was completed in December and these changes were aimed at making our decision-making structure more effective, by trimming our MC from thirteen to eight and empowering a larger number of functionally focused decision-making bodies. In this reorganization, we also named our successor COO, Tom Tracy, and created two new positions for the organization, Chief Planning Officer (“CPO”), Kacy Gott, focused on maintaining and enhancing our client service offering, and Chief Strategy Officer (“CSO”), Bob Wagman, focused on helping the organization identify strategic opportunities that support our long term growth objectives.

Client Service Offering

The most important objective of our merger was to enhance our overall client service offering by bringing together diverse talents, expertise, and experience. By combining our resources under one roof we are now able to provide a broader array of services and better tailor our service offering to fit each client’s needs, ranging from comprehensive wealth planning services (retirement, tax, estate, philanthropy, etc.) to providing fully integrated, in-house family office solutions. We are not aware of any other firm in our industry that has the breadth of client service capabilities, delivered at highest quality levels, as Aspiriant.

Kacy Gott and Nikki Michelini have coordinated Aspiriant’s newly integrated client service offering. Rather than merely cobble together “best current practices” from each former firm, we have reexamined virtually every aspect of the client experience, from process and philosophy to reporting and deliverables. We anticipate that this effort will be completed by early 2009 and we look forward to sharing more about this in the coming months.

Investment Platform & Philosophy

Another primary benefit of our merger was the ability to combine our resources and give us depth and breadth of personnel dedicated to investment research and strategy development.

Led by Bob Wagman and Jason Thomas, Chief Investment Officer, we have integrated our firm’s core investment philosophy and have made great progress in unifying our investment operations and reporting under Young Kim, Director of Investment Operations. We have also added two new positions to our dedicated investment team.

We have rounded out an array of access funds for qualified investors in the areas of real estate, private equity, and fixed income. We have also taken a fresh look at the capital market expectations that underlie our portfolio design work for clients. This will permit us to intelligently reconfirm…or modify, as necessary…clients’ optimal long range portfolio strategies during 2009.

Corporate

Our commitment to being the leading independent wealth management firm extends to all aspects of our organization, including those that clients seldom see: finance, legal, administration, human resources, information technology, and regulatory compliance. Michael Kossman, CFO and Chief Compliance Officer, Sherri Dorton, Director of Human Resources, Eric Montgomery, Director of Finance & Administration, Marc Primiani, General Counsel, and Jay Owens, Manager of IT, have us operating, now, as one firm.

Brand Identity

Our re-branding effort was led by Cammie Doder, Director of Business Development, and Jennifer Kenning. The name “Aspiriant” embodies our goal to help our clients attain the clarity to achieve their aspirations.  To communicate to the outside world the characteristics of the firm that our clients know from direct experience, we plan to launch our new website, www.aspiriant.com, in the next month. 

Looking Ahead to 2009 and Beyond

Our efforts at integration in 2008 have given us a strong foundation on which we will continue to build in 2009.

In 2008 we added significant staff to build our infrastructure and better support our client service capabilities, and while many of our competitors are laying off staff in this difficult economic environment, we have instead reduced base compensation for principals and frozen staff salaries, but still plan to continue hiring two additional people during 2009.

We believe that these short-term compensation sacrifices in order to make continuing investments in human capital are precisely the right thing, at precisely the right time, to position us for long-term success in serving our clients. Our ability to think, and act, for the long-term is one of the benefits of being and planning to remain independent, so Aspiriant can help its clients make wise financial choices for many generations to come. To make sure that we’re hearing our clients’ views on how well we’re achieving that goal, we plan to conduct again a client satisfaction survey later this year.

We know that there is more work to be done in 2009 and beyond; but we are passionate about our vision, enthusiastic about our progress, and confident in our ability to achieve.

We want to take this opportunity to thank our clients, our people, and our friends for their continued support during this very challenging, but exciting time for us.

Rob Francais,
Chief Operating Officer

Next Article