Miller Time
Fielding Miller is the Chief Executive Officer and co-founder of CAPTRUST Financial Advisors, based in Raleigh, North Carolina. CAPTRUST is an independent advisory firm with a specialized focus in the qualified retirement plan market; the firm has branch offices in Atlanta, Birmingham, Boston, Charlotte, Philadelphia, Portland (Maine), Richmond, and Washington, with 32 advisers that oversee $23 billion in client assets.
Miller, a charming but intensely driven North Carolinian, generally stays clear of the press, but he agreed to talk to PLANADVISER about the changes in the retirement marketplace, and his aspirations for CAPTRUST.
PA: Where do you see CAPTRUST in five years?
Miller: For the most part, in five years our firm will look and feel very much the way it does today—but with a much wider geographic footprint. We could not be more excited about the future, as we believe that a significant component of the value proposition for plan sponsors is shifting from the providers to the advisers. With this shift, advisers can expect more opportunity as well as more accountability and risk. We believe we are well-positioned for both, and time will tell.
It seems that much of CAPTRUST’s growth these last five years has been organic. Do you see a shift of emphasis to acquisitions?
Acquisitions are an important part of our strategy but our goal has simply been to attract the best talent we can find. In the past, we have hired from various places—executives from the retirement industry, consulting firms, wirehouses, independent firms, as well as professionals from other industries. We have completed several acquisitions already, but it is not our primary strategy—our primary growth strategy will be to grow our client base organically.
What type of practice from an acquisition standpoint works for CAPTRUST?
Clearly we are looking for advisers who have a retirement- focused practice—whether working with plan sponsors, participants, or retirees—and have demonstrated the ability to excel in the mid-market space. The best fit for us are advisers that have a history of success and find our vision as compelling and energizing.
Right now, it is clear that many advisers are testing the waters to see if they should make a move. For some successful wirehouse advisers, the main issue seems to be that their firms are not willing to embrace many of the new fiduciary requirements. They are alarmed to learn that they are getting shopped by some of their most loyal clients because they cannot deliver on some of the most basic fiduciary needs. As for the independent shops, the trends certainly are favoring them, but most are finding it difficult to exploit the opportunities as too much of their time is drained by the many non-adviser activities required to run a small business.
In my dealings with advisers, I have come to believe that any adviser who is contemplating a change would be well-served by focusing his attention on one key question: How will this change improve the lives of my clients? If he is not sure about the answer, he is either not ready to make the move or has not found the right partner and should keep looking.
As for our strategy, a recent recruit commented on our adviser business model in an interesting way: He said we have a rare combination of attributes that include the sales energy of a wirehouse, the intellectual capital of a consulting firm, and the stewardship mentality of an asset management company. That, as I saw it, was a real compliment.
Is there a particular financial proposition that you are making to your acquisition targets?
Our financial proposition is based on a partnership model. We believe in the leverage created through proper alignment of interests, and so we incentivize our partners to wear two hats—to build their business and to lift others in the process. Financially, we compensate them in three ways: a net payout on their practice revenues, dividends on their CAPTRUST stock, and wealth creation as they benefit from the growth of the business with the increasing value of their shares.
This model has worked well for us as evidenced by a very high adviser retention rate and with adviser production levels higher than any other independent firm I am aware of. As a result, our partners enjoy a great payout supplemented with quarterly dividends and a compelling wealth creation opportunity. To that end, we are not advertising a specific monetization event, but I can assure you that we are very focused on creating and building shareholder value over time.
Is there a particular geographic footprint you are after?
Yes. As we define the middle market, there are about 35,000 such plans and about 80% of these plans reside in 20 states. Our goal is to have a presence in each of these states, and we’re working from East to West. Right now we have locations in seven states with a nice footprint covering the East Coast and are looking to move into the Midwest and Texas in the near future.
In the marketplace, it is perceived that there is “a CAPTRUST way’ of servicing retirement clients. What exactly is that “way’? How does that structure work for acquired retirement practices that have their own way of servicing their clients?
The CAPTRUST way is not a structure but rather an internal mantra that represents our collective attitude. We made the choice years ago to be a premium service provider, which led us to focus on fewer and deeper client relationships. We understand that the real magic in this business resides in the relationship between the adviser and the client. Our job is to create an environment that is designed to elevate each adviser to his highest potential and to enable him to deliver on the promises he makes each day. The CAPTRUST way keeps our entire organization focused on delivering to our clients and our advisers a level of service that exceeds expectations.
CAPTRUST has both a retirement practice and a wealth management practice. How do the two mesh, if at all?
Wealth management has been an integral part of our strategy since our inception. Today, more than ever, we see great demand for an integrated offering of plan sponsor and plan participant services. Financial planning for executives is one of our fastest-growing business lines and we believe that we have just scratched the surface. Participant advice is needed more today than ever and, as a result of the Pension Protection Act, the independent adviser is in the best position to deliver this service. We have spent considerable time over the last two years bolstering our wealth management offerings to prepare for the much-anticipated shift of Baby Boomer assets out of plans and into private accounts. Success in the wealth management business always comes down to trust, and serving companies as an objective and valued fiduciary adviser, we believe we are well-positioned as a trusted adviser when it comes time for executives to retire.
CAPTRUST is a deep and substantial organization, but, like it or not, it is very much identified with you, its founder. Is that a strength or a weakness?
If this is true, I would say it is both. It is a weakness in the sense that it does not accurately reflect the depth of talent that we have as an organization—we have assembled an impressive array of experienced advisers, managers and staff that have dedicated their careers to building CAPTRUST and they clearly deserve the credit for our success. That said, it is also a strength, in the sense that CAPTRUST is an advisory firm that was founded and is run by an adviser. I think that our current advisers and those that we are recruiting find great comfort in knowing that I have carried the bag for more than 20 years and fully understand and respect their world. Successful advisers are a rare breed; they know how to work hard and smart, but they can be quirky. If you can’t relate to their world, you can forget about earning their trust. I share their quirkiness, and I think they like that.
You are clearly making a bet on the vitality and demand for retirement advisory services. What gives you the confidence to make that bet?
We have been betting on this space since 1988. It is only in the last few years that the role of the adviser has become “cool’ and the investments made for the last 20 years look “visionary.’ We are, in truth, neither cool nor visionary; we are simply blessed to have the secular trends in our favor.
Rumor has it that, beneath that laid-back demeanor, you’re a secret adrenaline junkie. What’s the most thrilling thing you’ve done in the last year?
I recently rode in a rickshaw taxi in downtown Bangalore—a truly harrowing experience.
*Photography by Hugh Hartshorne