When you’re on a roll, it’s best to try and keep it going and ride the wave. This post marks the seventh installment in our Winners of WealthTech series, where I sit down with industry leaders who have made their mark in wealth management technology with a track record of innovation and success.
I have received fantastic feedback on my previous interviews, so expect to see monthly updates for the rest of 2018! Take a few minutes and read a few of our previous posts:
- Bill Capuzzi, CEO of Apex Clearing
- Lori Hardwick, President of Advisor Innovation Labs
- Cheryl Nash, President of Fiserv Investment Services
- Stuart DePina, President of Tamarac
- Bill Crager, President of Envestnet
- Aaron Klein, CEO of Riskalyze
It is with great pleasure that I am able to share with you our next Winner of Wealthtech, Eric Clarke, CEO of Orion Advisor Services. Eric has over 15 years of industry experience working with fee-based investment advisors, supporting their portfolio accounting needs. He serves on several advisory boards including the TD Ameritrade Advisor Panel, Rydex Financial Services Advisory Board, Operating Committee of Your Silver Bullet, NorthStar Financial Services Group and Constellation Trust Company.
In Our discussion, we covered a wide range of topics from standard work-life balance to the length of Orion contracts to Orion’s use of the Wonderlic test to gain insight into the personality of prospective employees.
Why did you start Orion Advisor?
my background is probably a little bit different than most of the people that you’ve interviewed. I went to work for our family business right after grad school. My father had founded his RIA firm in 1989 and it seemed like a pretty good idea for me to go to work there.
I started out working for the asset management side and it became apparent to me that we needed to make some operational changes to improve our relationship with the advisors that we were doing business with.
To be honest with you, I complained too much about that, to the point where my father said to me, “Hey, since this is obviously an important thing to you, why don’t you come in and help us be part of the solution and fix this issue”? So my father and his partners put me in charge of the operational team and the IT group.
This was a very small group at the time, in the mid to late ’90s, and as I came in to lead that team I realized we had some workflow challenges and things that we needed to improve. But a big portion of what was holding us back and creating bottlenecks was our technology platform. At that time we were using DB Cam, which required manually maintaining a lot of the data.
As we started the journey of looking for a technology system that would better support our business, I read industry periodicals, since it was before the days of Google being an incredibly valuable search tool. We couldn’t just go online and find a company that did exactly what we needed.
So we tried different solutions from different tech companies. We tried four different alternatives but couldn’t find what we really needed. And because of that, I put together a business plan to create the company that today is Orion.
Essentially, we knew that we were going to have to build the technology to support what was a billion dollar RIA firm at the time. As we built that technology, I made the point that, “Hey, we’re going to have to support other RIA firms with this technology, otherwise no sooner will we have created this technology than it will become irrelevant. We won’t have the capital to deploy back into the business, and reinvest to keep the technology up to date”.
They were fully supportive of that vision, and split the companies apart in December of 1999. At that point we took the operations and the IT teams and we created the company that today is Orion, and we went out on this journey of building technology to support fee-based RIAs.
We spent a good, solid three years building out the different modules that we needed, from reporting to billing to trading to new account processing, everything we needed to sell our product to other investment advisors. In that three-year development period, we focused on building a complete technology platform beyond what just our family’s RIA business needed, and we started to go out and market it.
I’ll never forget the first Schwab Institutional Conference that we went to, our first Impact conference. I was super excited, I thought everyone would be clamoring for this type of technology. Shortly after we arrived at the conference, we found out that advisors at that time did not want to outsource, or do business through the web.
We had built our entire platform using web-based technology, which was cutting edge at the time, when other vendors were putting software on a disc and sending it out to advisors. For several years, we started working with early adopters, and we had some initial interest, but until doing business on the Internet became more acceptable, our business really struggled.
But once people began working more online and became more comfortable doing business through the Internet, then our business really started to take off and do well.
CI: A lot of RIA technology was developed by advisors who built systems to support their own needs and then built them out for the rest of the market, so in that respect Orion is similar.
bAbsolutely. You have Cheryl Rowling, who did something similar with TRX, Greg Freedman, what he did with Juncture, there are several examples of that out there, and we just happen to be the example in the portfolio accounting space.
What’s become more important in your personal life over that past few years?
I absolutely value the balance of time. I get an energy from coming to work and solving challenges, and dealing with the day-to-day decision making of running the Orion business. I love the kind of charge that it gives me each and every day, but then when it comes time, around five-thirty, six o’clock, I value being able to make sure that I can go home and spend time with my wife and kids. That’s absolutely become super important to me.
And what I’ve found, I did not do that so much when the kids were younger, but as time has gone on, I’ve found that as the business has matured and I’ve been able to walk out the door and go home and spend some time with my wife and kids, the business continued to do just fine.
I think the one thing you realize is that if you can achieve that balance it gives you more energy, more focus, more drive while you are here during your working hours than burning the candle at both ends. I say that today, and that’s very different than when we started the team.
When our team was relatively small, we had to burn the candle at both ends, there weren’t a lot of choices at that time. But today obviously, as the organization has grown, at NorthStar, our parent company, we have over a thousand employees, at Orion we have just over three hundred and fifty employees now. We have the opportunity to delegate and leverage resources across a much broader team than what we had when we got started.
Are there other ways you stay motivated and maintain your entrepreneurial spirit?
I participate in a group called Vistage, which is a group of CEOs, that get together once a month, and spend an entire day together talking about our businesses, challenges, and opportunities that we face. It really reenergizes me, it’s fun to go in and hear some of the challenges that others are facing outside of our industry, running completely different businesses. They are so similar to the things that we’re dealing with. Getting that peer-to-peer feedback has been a great way to stay engaged and revitalized and get new ideas for the business. New ways that we can challenge ourselves and become a better company and better serve our advisors.
Can you share a tip that you took back from that group to Orion?
I’ve received some great advice across the board from that group, and typically my team knows now when I come back from a Vistage meeting that something’s going to change. And it’s that constant willingness to kind of tip your business upside down and do things differently that has been absolutely critical for us.
Every time we have a Vistage meeting, we bring in an outside speaker, and those outside speakers really give us insights to things that we can be doing better within our business. Whether it’s in regards to monitoring our business’ metrics and trends at a high level, different ways we can be looking at our financial statements, the investments that we’re making, sales opportunities, and redefining our value proposition and those sorts of things.
If I had to narrow it down to one that was super impactful, it was dealing with a gentleman named Steve Yastrow. Steve has been incredibly impactful in helping us realize that our brand is defined based on our customers’ perception, as opposed to something that you could define by marketing collateral and those types of things. Helping us see that, in this day and age, social media and user opinions being online that it is absolutely imperative to our brand to take very good care of our advisor customers.
And through that realization that our advisors would ultimately be defining our brand based on their perceptions of doing business with us, it changed the way we do contracts, it changed the way we interact and engage with our advisors, it really made a big impact on our business over the years and continues to make a big impact on our business. There’s always additional ways that we can become easier to do business with.
CI: When you said you changed your contracts based on your customers’ perception of your business, can you give me an example of how you changed them?
EC: That is a great question because that is literally the first thing that we did after hearing Steve speak to us. So he said, “Hey, tell us about your business, how are you marketing your business?” those types of things. And I told him that one of the mantras that we have at Orion is that we want to help our advisors enjoy their business again. He responded, “Okay, great. Now take me on your customer journey, how does it start?”
And I walked him through the process where we do webinars, we do a demo, those types of things, and then we end up presenting our advisors with a contract. And he asked, “Okay, great. Tell me about that.” And I explained, “Well, you know, it’s seventeen, eighteen pages…” and all of a sudden I realized, well that’s not helping our advisors enjoy their business again!
I came back to our in-house counsel and explained, “I need you to help me make this contract an enjoyable experience. You’ve got four pages max, and when I read this I want to see culture coming through, to the point where an advisor would say, ‘Oh wow, this company would be great to do business with’”.
So our attorney took the challenge to heart, and he did a phenomenal job of creating a contract that’s easy to read, and it’s even got some humor in it to describe different sections and terms in the contract and it’s worked out really well. It gives a great first impression for our advisors.
But that’s just one example of many that I could go through and tell you about how Steve has impacted our business over the years. And that was a direct result of being part of Vistage, and that energy that comes really comes out of attending those Vistage meetings, having these outside speakers come in and challenge us to make our businesses better. Bringing those ideas back and implementing them at Orion.
How do you promote an open dialogue with your executive team to improve decision making? 
Our executive team is comprised of very different and unique personalities, and it is the diversity of those mindsets and thought processes that have ultimately driven us to achieve success over the years. For instance, it’s not uncommon at all for us to get together, throw an idea out there, and be challenged from three or four different directions.
I have one individual in particular who always thinks about things very differently than the rest of us, it seems no matter what, and I appreciate and value different perspectives. Now at times, our executive meetings can get pretty heated, and the disagreements can create a bit of contention when we meet. But the thing that we’ve been able to do as a team, is that once we do reach a decision, everybody gets behind that decision and is willing to implement that by the time the meeting is over.
I have an executive team and a leadership team where we encourage disagreements during the meeting, as we’re hashing out new ideas and getting new developments to market. But once we have made a decision I absolutely require everybody’s buy-in, and want everybody to be on board with getting the idea implemented and rolled out to our advisors.
CI: So the tip is to disagree in private, but be on the same page in public.
EC: That’s correct. We want to make sure that everybody has a voice at the table, certainly, and oftentimes going into a meeting I might have an idea, and we often leave that meeting going in a completely different direction that I hadn’t even thought about. That’s really helpful to me.
I don’t think that members of our executive team will be buying retirement homes next to each other when that time comes, but we certainly have a lot of respect for each other and appreciate one another’s perspectives.
How do you identify people that would be a good fit at Orion?
We put all of our employee candidates through some reasonably intensive testing before they’re hired. We leverage a Wonderlic test that allows us to get an aptitude score for someone…
CI: You could be hiring a lot of former NFL quarterbacks.
That’s right, that’s right! But it’s that same exact company that we leverage for our testing and it’s important to us that we understand that they’ll have the aptitude to be successful in their job. But regardless if they’re going to be a relationship manager, or an IT developer for us, we put them through that test.
Once we’re done with that, we put them through a test called Personalysis, which gives us a better understanding of how the individual processes information, how they’re going to express opinions and share ideas with the rest of our team. That personalysis tool allows us the ability for our managers, our team leaders, to have that insight for each of their team members, but then it also has a tool that allows us to see, at a team level, how the interactions are going to be taking place. Opportunities and strengths are also some things to look out for as that group is processing information.
Personalysis gives us insight as to how the individual processes information, how they’re going to respond, how they’re going to express themselves, but then it allows our team leaders to bring all the different personality tests together and see how the team is going to interact with each other; what they’ll do well together and some areas they might have to watch out for as they’re processing problems, challenges, and implementing new things.
CI: Is there anyone who scored very low on those tests who you still hired and worked out well?
Yes. For instance, Personalysis goes through and assigns different personality types a different color, red, yellow, green, or blue. But we’ve had people score a zero in the green area, and it’s okay, it’s not a problem. But it’s also helpful for the rest of us to be able to see that so we know best how to interact and share ideas with that individual. In fact, we really like the idea of bringing people together that certainly have different personalities and social skill sets.
What’s something that you personally believe that other people might think is crazy?
Well, I am not a believer in failure. I do believe that we have setbacks and challenges, but I don’t view things as failures. At Orion, we have things that come and challenge us, things that others might view as failures. I don’t look at them that way. I look at them as opportunities for us to learn quickly, and as we — culturally — can learn quicker than our competitors, that has created a competitive advantage for us, over time.
I am absolutely an optimist, but I also try and learn from each and every setback that we have, and make sure that we do make changes so we don’t have Groundhog Day-type experiences here. As we have a setback, we try to learn from those very quickly, and make sure that we’re willing to take that feedback and translate it to action so that we put ourselves in a better position to win.
Who do you think of when you hear the word “successful”?
Well, being an Omaha, Nebraska native and a big Husker fan, I think of our legendary coach Tom Osborne, as someone who is successful. He’s someone I admired a great deal as a kid. He is someone who, towards the end of his career, was winning national championships but I enjoyed watching his journey along and the different ways that he would achieve and define success.
At this point in my life, I have had the opportunity to be on a board of a volunteer organization that Tom Osborne founded called Teammates. It’s a school-based mentoring program at the local school district that I went to as a kid, which is the Millard Public Schools.
We have over three hundred and fifty volunteers out in the Millard Public Schools spending an hour each week mentoring a student. It’s something that, as I define success, people like Coach Osborne were able to think of to achieve success on a professional basis and then translate that into doing good in the community and I certainly want to be a part of that.
Besides Tom Osborne, who was your biggest influence growing up?
I grew up in a situation where I had a father that I admired a great deal and had a lot of opportunity to interact with him. Having grown up with our family running a business you have a lot of opportunity to spend time together. Generally speaking, I learned a great deal from him, and was able to really spend a lot of time with him before he passed away, just getting different insights and the wisdom that he learned, being an entrepreneur and running a financial planning and investment advisory business for decades.
That admiration for my father translated into the desire to go work for him when I was done with grad school. I know that not all family businesses work out, but as time went on and before my father passed away in a plane accident five and a half years ago, the time that I cherish the most is the time I was able to spend working with him after graduate school until his passing. I learned a great deal from him, I’d be crazy to say that I didn’t. Not a day goes by where I don’t have some sort of interaction here at work where I don’t reflect on some type of a lesson learned having that experience of working with my dad and hearing the advice that he had given to me over the years.
CI: My apologies, did you say he died in a plane accident?
EC: Yes, he and my brother passed away November 10, 2012 in a plane accident. My brother was a physician and he also had a pilot’s license and flew three or four times a week, he traveled a lot by plane different medical clinics and places like that.
There was a mechanical issue that resulted in the accident that took both of their lives. It was unfortunate and a tough thing to go through, especially in the sense that while we were dealing with their loss, also trying to continue running the family business and moving forward here at Orion. But it was definitely a blessing and an opportunity to have worked with him for the fifteen years or so that I had after graduate school. It was a great experience and that’s where I learned a lot of my business sense.
CI: You don’t realize how great you had it when in the blink of an eye the people around you could be gone.
EC: That’s very true. Life can take some interesting twists and turns, it certainly doesn’t go the way we think things will play out or how we’ve planned out in our minds. But as I reflect back on it I wouldn’t have it any other way. I had a great dad, I had a great relationship with him and learned an immense amount from him over the years.
Do you have a favorite failure that you learned the most from?
I’ll say this Craig, I’ve learned a lot over the years, and there are some key defining moments as I look back on my experience running the business. I think there is one interesting moment where I was sitting at a Schwab conference, Neesha Hathi was speaking, and she was talking about the CRM being the center of the most successful advisor’s day-to-day experience.
I realized at that moment that we needed to pivot, and work on integrating and supporting the many advisor CRMs. Up to that point, we had focused on having our user interface be the hub of the advisor’s day, and we take a lot of pride in that user interface. But I think directionally, at least for me, it was an “aha” moment, when I realized while we had made a mistake over the years of not making integration with CRM platforms a focus of our business.
What’s your morning routine, what do you do during the first sixty to ninety minutes of your day?
I’m a marathon runner, I love to run marathons so I get up at four-thirty, five o’clock in the morning.
CI: It’s cold out there in the morning!
EC: It’s very cold, so in the past couple of months I’ve become great friends with the treadmill. When it’s twenty below in Omaha, it makes it tough to run outside. But I find that getting up and running clears my mind, relieves stress, provides greater focus, all those types of things. Usually I’m on the treadmill by five o’clock, and off to work by seven, into the office by eight o’clock.
I’m actually going to be running the Boston Marathon in a couple of months. David Cantor at Fidelity is going to be running it, and it’s something that I enjoy, this will be my tenth marathon. My wife is also a runner so that’s a way that we can spend time together as well.
What breakfast do you usually have?
A protein shake… You know, this part of my life is probably a lot less interesting!
What bad advice do you hear given out most often?
I hear people constantly saying that advisors and RIAs should never build any of their own technology and should only use off-the-shelf software. I disagree with that because technology and developing ideas has never been easier than it is right now. Building an idea, even building websites, things like that, it’s pretty simple. They can access a third-party consultant, or those types of things to bring into their firm and make a real difference in the way that they’re expressing and adding value to their specific clientele.
I do believe advisors can make a very small to mid-size investment in technology that specifically supports their firm’s value propositions, and use that as a competitive edge for three to five years into the future.
The barriers to entry for people to take an idea and translate that into action have come way down over the years.
There used to be a mindset that if you had an idea you’d be better off spending your time somewhere else, let some other company do that. Now that’s not the case, and in our industry in particular, I hear a lot of other tech companies telling advisors “You shouldn’t do this, you’re best to spend your time somewhere else”, and I don’t believe that’s the case.
What behavior or belief you have recently adopted or changed?
I think, like most people, we set some New Year’s Resolutions for ourselves. I know with my kids, we were out to dinner on New Year’s Day and we went around the table and I asked them to share their New Year’s Resolution. It was somewhat humorous. I enjoyed that a great deal, but the one thing that I have done since the first of the year is I have set aside a half hour a day for personal prayer, meditation, and that has made a significant difference in my life. So far I’ve been able to do it everyday, and we’re two months in, so one more month and I think it will be an official habit.
CI: You just need to make it through the first quarter.
EC: Yup, that’s right. I’ll tell you though, my little ten year old, her goal was to be nicer to her siblings and that’s a fun one because we’ve had to remind her of that a time or two.
What would your close friends say that you are exceptionally good at?
My biggest strength is probably also my biggest weakness. I’m kind of tenacious when I get an idea or think that we can accomplish something, I really like to go for it. But that strength can also be problematic from time to time, but that’s a word that I think would be a fair description of my personality.
CI: That’s cheating, because that’s what they tell you to say when you’re interviewing. “I’m too prompt”, or “I’m too hard-working, that’s a real weakness of mine”.
EC: No, early on we did 360 reviews, and I had an internal administrative assistant that worked for me, and she put that on both sides. That was almost twenty years ago now, but that was insightful for me to hear that, and see that it was both a strength and a weakness, and something that I’ve been mindful of over the years.
What book have you gifted most often?
I love starting new businesses or talking to people that are starting a new business, and early on at a Schwab conference I had the opportunity to hear Guy Kawasaki speak. When I heard him speak, I thought it was fantastic and so I bought his book called The Art of the Start, and I always give that book to people whenever they talk to me about a new business they’re going to be starting or anew idea they have.
I love his perspective, and the book talks about the blueprints to launching a business. So we have basically taken those ideas and implemented those practices at Orion over the years. Obviously Orion has been in existence for a long time, but we’re always launching new product developments so we’ll still refer back to Guy’s rules that he outlines in that book. We’ll still use those terms at meetings, it’s a great book for anybody that’s starting a new business.
Can I put you on the spot and ask for one thing you got out of the book that you think is helpful?
Absolutely. So he talks about this concept of “don’t worry ship crappy, but work like hell to support your users”, and that has been super helpful for us, because what happens is that allows us to get an MVP out the door and in our advisors’ hands, and then the advisors just start giving us lots and lots of feedback. Then we make sure that we have resources dedicated to take that feedback and implement it quickly. It’s just been a winning way for us over the years to get new ideas to market.
CI: I’ve never heard that term, but I did read a quote by Reid Hoffman, “If you are not embarrassed by the first version of your product, you’ve launched too late.”
EC: Yep, exactly the same concept. And the way that Guy says it is so ridiculous, but that is definitely something that sticks out.
What is your favorite smartphone app?
Having four kids, three of which are teenagers, I love using Snapchat. I use Snapchat to communicate with my kids, and keep up to date on what they’re doing with their Snapchat stories. You can get access to the Wall Street Journal, I think it’s probably a relatively under-used app…
CI: I wonder what’s the percentage of people viewing the Wall Street Journal on Snapchat?
EC: Yeah, but I love it. I think it’s a fun and easy way to stay current. Not that there aren’t hundreds of millions of users of Snapchat, but in our space I think it’s a rarity.
What message would you send to yourself at twenty-five years old and thirty-five years old?
When I was twenty-five years old, head down, focused on building out the Orion business, the advice that I would give myself then would be to be more observant. I think that as time went on and we realized that we could observe trends outside of our business, and observe trends as to how people were interacting and engaging with technology it really has allowed us to innovate and provide advisors with great opportunities to improve their clients’ experiences.
Those ideas, the very best ideas that we’ve had over the years, first and foremost come from our advisors, but secondarily come from simple observations. And I think I would tell my twenty-five year old self to be a better observer and try and take those observations and translate them into actions.
Would it be different for your thirty-five year old self?
When I was thirty-five I wish I would have had a better work/life balance obviously. I think I took work way too seriously, I would tell myself to just take a step back and enjoy the journey as opposed to constantly working on the destination.
Do you have a favorite movie or documentary?
Movie or documentary… well, maybe you’ll relate to this because you said you were the class clown, my favorite movie is Christmas Vacation. I absolutely love that movie, and I enjoy watching it every year with the kids.
