February 25, 2020 - When Michael McCall and his partner, Michael Connelly, joined B. Riley Wealth Management in Summer 2019 to open a branch outside of Philadelphia, their mission was "to do right" by their clients. Since then, the McCall-Connelly group has seen rapid growth and a marked increase in assets under management in less than one year with the firm. The team attributes its success to the agility and size of B. Riley Wealth Management, in addition to the tools and technology offered, which have enabled them to navigate the constantly changing landscape of the wealth management business.
Boutique Culture, National Presence
McCall knew B. Riley Wealth Management was a fit immediately after meeting with the executive team because he envisioned himself working in a more intimate environment where he could telephone senior management and actually speak with someone. At other firms, there might be a several-day delay in receiving a return call. "When I pick up the phone and need to talk to Bryant Riley, the Co-CEO of B. Riley Financial, he will call me back. At other firms, the CEO is not picking up the phone to speak with a financial advisor," McCall says.
"We've always felt most comfortable working in smaller environments. There is nothing wrong at all with larger firms; they do great things, but we like to be able to reach out to the head of planning or advisory services and speak with them timely. For Mike and me, it's never been important to work for a big wirehouse. What we wanted the most was to work for people that had our backs and wanted to help us do what is best for our clients, and that's what we found at B. Riley Wealth Management," McCall says.
McCall sees B. Riley Wealth Management as a standout because "there just aren't a lot of firms that have that boutique feel with a national presence like ours. We're in New York, Miami, Los Angeles, Memphis and, of course, Philadelphia; and, we're publicly traded."
Retirement Planning and Preservation of Capital
One of the reasons the McCall-Connelly Group decided to join B. Riley Wealth Management was its focus on ensuring that clients can maintain a lifestyle they've become accustomed to once they retire, even as bumps in the road like unexpected medical expenses or other burdens present themselves. McCall is passionate about retirement planning and working with families and individuals who, for some reason or other, feel like they haven't saved enough money to live the life they have become comfortable with for the past 20-30 years.
"People are retiring much later than they used to, and things like health issues, school tuition for children or other unexpected burdens can set clients back," McCall says. As they get close to retirement they realize, "Wow, I don't have what I thought I would. How can I stretch this out over 30 years and still maintain my lifestyle?" Over time, planning and working with clients who are close to retirement has thus became a focus for McCall and his team.
McCall also works with small business owners and professionals, such as doctors or attorneys, guiding them on preservation of capital and growing their wealth.
Effective Tools Drive Quick Growth
The size, agility and the open platform that B. Riley Wealth Management offers its advisors was immediately impactful on McCall's business. "The firm has given us all the bells and whistles to manage our clients' retirement effectively and efficiently; we have all the capabilities we need through First Clearing1 and all the tools the big boys have," he says.
One of the most effective growth tools for McCall and his team has been Envision®2, B. Riley Wealth's in-house First Clearing financial planning solution. "Envision technology helped tremendously, and through it we've been able to gather some assets as well," McCall adds.
Working with some of the B. Riley Financial affiliates has also proven fruitful for McCall and his team. "The deals that are coming out of capital markets and the syndicate deals from B. Riley Financial's investment banking affiliate, B. Riley FBR, Inc., are not like the ones we would see at larger firms, and that has been exciting," McCall says. He adds that because B. Riley Wealth Management is a smaller firm, clients can participate in deals they may not see elsewhere because there probably wouldn't be enough shares to make participation worthwhile for them. "Our clients are happy because they have been exposed to meaningful fixed income and equity syndicate deals."
Solid Technology Demands A High Level of Client Service
Advances in technology have also driven success for McCall and his partner, but now that everything is at one's fingertips, McCall says the most important thing is "the way you use tech to help your clients get from point A to point B." The metaphorical playing field is now level in the wealth management business, he adds, so financial advisors have had to raise their game."
"When you walk through a client's door, it's about how you present information to them, because if they are getting ready to retire, they will likely consult with multiple advisors who use similar technological tools. The way you differentiate yourself is in your presentation and the quality of advice you offer," McCall says.
The same holds true for millennial advisors and clients, McCall says. "At the moment, millennial clients don't want to pay for advice; they want to use Vanguard, Robinhood, or other robo advisors, which is their choice and privilege, but they have only really known a great market since becoming investors, and that story is not finished. Currently, most millennials don't want an account at a firm like ours, but we're in the early chapters of the robo-advisor, discount broker story."
With one big correction or prolonged recession, McCall says the story could change. "I will not be surprised if they end up seeking advice from an advisor. Ultimately, people with real wealth to protect are much more likely to hire professionals that can provide guidance and direction with strategic financial planning," McCall says.
Navigating the Current Wealth Management Industry
While there is room for everyone in this business, McCall thinks it has become tougher to gather assets.
"When I started my career in the 1990s, investors wanted to be in the market, so I functioned as more of a combination advisor and stockbroker. The business has matured, though, and with so many different avenues, like financial planning, social security, and real estate, the planning aspect is crucial, and I'm not sure how much of that was happening 20 years ago. In our current market, every advisor looks like Warren Buffet, but when we have a huge correction or a recession, that's when the real work starts. There is a lot of geopolitical risk and things that keep me up at night, and while we're ok right now, eventually, there will be some sort of major correction. We just don't know when that will happen."
Potential for Growth in the Wealth Management Business
As McCall and his team are focused on preservation of capital into retirement, he thinks it is important to consider current baby boomers and the impending great wealth transfer. "We have focused on that for the last few years, and while people know about it, few realize how much money will be transferred over the next decade from the silent and baby boomer generations to Gen Xers and millennials," he says. "In my own practice, we've seen a significant growth in assets, and a lot of it has come from money that has been transferred from one generation to the next."
McCall sees this as a good opportunity for someone who is just entering wealth management and thinks it's a great place to focus when building a practice. The amount of people retiring over the next few years, and the money that will be handed down to people by their parents and grandparents, is an opportunity for financial advisors to provide good guidance to younger, less experienced investors.
While his primary focus is managing the Devon practice and dealing with clients, McCall does spend about twenty percent of his time "focusing on building the brand and talking to advisors every chance I can get to tell the B. Riley story."
McCall adds that when he talks to his clients and prospective advisors about B. Riley Wealth Management and the move he made, he mentions that the aim was never to exist at a firm with 5,000 advisors, because his goal is qualitative growth. He says, "I think getting up to about 300 advisors would be great, and seeking out only the highest quality advisors while we're still early in this game will allow us to develop a positive culture. So far, we're off to a good start."
McCall's efforts to spread the word about B. Riley Wealth Management in Philadelphia have proven fruitful. In February 2020, the MJB Wealth Management Group joined B. Riley Wealth Management in Devon, bringing with them about $270 million in assets under management from previous firm Stifel Financial.
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1 First clearing is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company
2 Envision methodology: Based on accepted statistical methods, the Envision tool uses a simulation model to test your Ideal, Acceptable and Recommended Investment Plans. The simulation model uses assumptions about inflation, financial market returns and the relationships among these variables. These assumptions were derived from analysis of historical data. Using Monte Carlo simulation the Envision tool simulates 1,000 different potential outcomes over a lifetime of investing varying historical risk, return, and correlation amongst the assets. Some of these scenarios will assume strong financial market returns, similar to the best periods of history for investors. Others will be similar to the worst periods in investing history. Most scenarios will fall somewhere in between.
Elements of the Envision presentations and simulation results are under license from Wealthcare Capital Management LLC © 2003-2019 Wealthcare Capital Management LLC. All Rights Reserved. Wealthcare Capital Management LLC is a separate entity and not directly affiliated with [B. Riley Wealth Management].