Adam Birenbaum, chairman and CEO of Buckingham Strategic Wealth, joined the firm at age 24 as an unpaid intern. By 31, he was CEO of what would become one of the country’s largest RIAs.
In an interview with ThinkAdvisor, Birenbaum looks back at leadership lessons he’s learned and a few mistakes he’s made, as well as forecasting how the industry will be changing.
“You’re going to have to democratize the services that used to be available only to ultra-high-net-worth folks to create a one-stop shop for all clients … a ‘Family Office for Main Street.’ That’s where the puck is headed,” argues Birenbaum, now 45.
Buckingham manages assets of $24.32 billion and provides services to $1.34 billion of participant-directed retirement plan assets, according to its Form ADV, dated July 27.
Under Birenbaum’s leadership, the RIA has been super-growth-focused, particularly via acquisitions. In 2010, the year he was appointed CEO, Birenbaum led the company’s first advisory firm acquisition. Today, it has more than 50 locations nationwide. A core operating unit is Buckingham Strategic Partners, a platform for advisors.
Birenbaum was a law student when he read a book that would set him on a totally different career path: “The Only Guide to a Winning Investment Strategy You’ll Ever Need,” by Larry Swedroe, co-founder, and head of financial and economic research, at Buckingham. Birenbaum eagerly joined the firm.
In the recent interview with Birenbaum, who was speaking by phone from the firm’s headquarters in St. Louis, he applauds financial advisors who are “providing comprehensive solutions” but laments the industry’s lingering “strong commission-based contingent,” branding it “a sales culture versus an advice culture.”
He also points to the wide range of services that advisors will need to offer in the not-too-distant future, especially tax strategies.
Here are highlights of our conversation:
THINKADVISOR: What’s your biggest success as CEO and chairman of Buckingham?
ADAM BIRENBAUM: Growing Buckingham, while at the same time staying true to the values and legacy of our founders upon which they built the firm.
How have you advanced the RIA?
I brought a growth trajectory to Buckingham, both organic and inorganic.
In 2010 I led our first [M&A] transaction. We’ve done over 50 now, acquiring other, smaller, wealth management firms all over the country.
A lot of people decide to grow their firms for financial reasons. We grew because we knew it would make us resilient: It would give us scale to provide a platform for advisors to do their best work.
And we knew it would allow us to have the resources of a large organization we would need to really be competitive in the current landscape.
What’s one of the strongest founders’ values that you’ve carried forward?
They had a very simple phrase that stuck with me: “Add value to the lives of others, and you’ll never have to worry about profits.”
We try to live by that every single day.
Have you made any leadership mistakes?
I made lots in my early years. [I learned] that you can’t have 150 priorities. If you do, you’ll truly have no priorities. I tried to knock all of my people’s issues and challenges out of the way.
But I found that I was spending all my time putting out fires.
I suggest for any new leaders coming into [a top leadership role] to figure out what the three, four or five biggest priorities are for the organization — and make those your focus.
You have to be very comfortable saying no to things.
Any other mistakes that CEOs are prone to make?
You need a group of aligned and high-character, high-competence people. But not every person is going to be along for the journey with you the entire time.
If you have a team member that isn’t aligned with you and shows a glimpse of cracking the armor representing those characteristics, it’s OK to say goodbye to them. It’s so much better to take action quickly.
Any trends that Buckingham recently, aggressively capitalized on?
[Focusing on] the advisor-client experience, we went heavily into building out a “Family Office for Main Street.” I believe that’s where the puck is headed for the industry.
You’re going to have to democratize the services that used to be available only to the elite — the ultra-high-net-worth folks — to create a one-stop shop for all clients.
We’ve leaned in heavily investing and directing our organization to be that one-stop shop. It’s very much underway.
What other trends are you participating in?
Acquiring firms, starting 14 years ago. While many folks are doing it today, we decided to go along a [path] of inorganic growth in 2010 because we thought it would make us better, not because it would make us bigger.
Please elaborate on the one-stop-shop trend.
Wealth management firms are going to have to offer a scope of services. That means not only providing investment, financial planning and philanthropic solutions but also tax solutions, family budgeting solutions, help support trust and estate planning, lending, cash management, and health and wellness.
This means that, potentially, we’ll have margin compression. But we’re going to have to enhance the level of services we provide [because] if we do that, we won’t have decompression.
Why is offering tax services significant?
Not having a fully integrated tax strategy in a family’s wealth plan is like making a recipe without a key ingredient. Tax strategies are critical to a well-thought-out plan.
That means advisors will need to work either hand-in-glove with CPAs or be CPAs themselves or else have in-house tax solutions available.
At Buckingham, the decision we made is to have both in-house tax solutions as well as working with existing accountants in a very integrated way.
I believe that advisors of the future will need a level of tax knowledge and expertise but that they don’t necessarily have to be accountants themselves.
Have you missed any important trends in the past few years?
I’m not sure that we missed any, but we sometimes take a bit longer because we have a wait-and-see approach.
We want to understand if things are fads or truly sustained trends. So we make decisions in an evidenced-based way.
We may not always be on the bleeding edge of everything; many trends we’ve taken longer to [adopt].
One trend I’m super-happy that we didn’t jump aboard is crypto, including esoteric investment solutions that our media often propagate, like NFTs [non-fungible tokens].
We like to take an informed, educated approach. We don’t need to be pushed.
What are advisors doing correctly nowadays, and what needs improvement?
A number of firms are doing a great job trying to progress along the value curve by moving away from just providing investments to understanding that they have to do more for their clients by providing comprehensive solutions.
And advisors are doing a much better job of educating and communicating with clients than ever before, as well as delivering a more modern digital experience and digital solutions.
Where do I think we remain behind as an industry?
A strong commission-based contingent still exists. There’s still a push of insurance under the guise of financial planning.
There are still products that are made to be sold versus bought by clients, which certainly benefit the proprietary makers but that aren’t really suitable for end clients.
With regard to insurance, are you alluding to annuities?
Yes, whether annuities or life insurance, they are just not appropriate.
That’s not an indictment of the industry as a whole, but there remains a lot of inappropriate stuff that still in large part [constitutes] a sales culture versus an advice culture.
Who helped you the most with your career?
I’ve had a tremendous number of mentors. The founding generation at Buckingham took me under their wing with guidance and career opportunity.
They did a great job of exposing me to the experience of being in the room, seeing how decisions are made and running a business — their thought process around making tough decisions and how they treated their team.
Who are you helping right now?
I feel it’s my responsibility to give those kinds of opportunities and experiences to the next generation.
For instance, I make it a priority to do one or two coffees or touch base with team members. I share lessons learned with what will be a third generation at Buckingham. They will ultimately take the firm forward.
After this call, I’m taking one of our young associates for a little walk to talk to them about their career and self-development opportunities.
What position did you hold when you were promoted to CEO?
I had every job in the place except for being a wealth advisor myself. I started out as an unpaid intern. I’ve done compliance, operations, practice management, legal, finance, M&A.
I feel my leadership responsibility isn’t just as a steward but to be almost like an offensive lineman. The quarterback, running back and wide receiver are the celebrities.
But the offensive linemen are the folks who roll up their sleeves and do the work in the trenches so the star performers can do their best work.
I shouldn’t be some celebrity and talking head. I should be at the office doing hard work so that the advisors can do their best work for their clients.
Did you ever want to be an advisor yourself?
It’s always been a thought in the back of my head.
When somebody emerges and if it’s the right time for a successor and if I’m not ready to retire, it would be an incredibly rewarding opportunity to serve clients [as a financial advisor].
But I’m not looking to give up my role anytime soon.