“Off we went,” recalls Noreen Beaman about the start of Brinker Capital. “There were eight of us, a little over $100 million under management and 91 clients.”
Thirty years later, Beaman is CEO, and Brinker Capital has $23 billion in assets under management, 165 staff members and more than 50,000 clients.
Brinker Capital serves fee-based financial advisers, and that group is divided between insurance-based broker/dealer advisers and traditional independent financial advisers, as well as advisers in the RIA community. The bulk of Brinker Capital’s clientele is individuals and families. A little more than half of its $23 billion in assets under management has come to the company from the “mass affluent” space, which Beaman defines as clients with less than $1 million of investable assets, not counting the value of their home.
“Think in terms of individuals who are rolling over their 401(k), looking for asset management in retirement,” she says. “That is about 60 percent of our portfolios — people in the retirement assets, meaning 401(k)s or IRAs. That space really is looking for advice. It is a crowded marketplace, but there are a lot of people to serve.”
Overall, the company’s average account ranges from $150,000 to $250,000, while its high-net-worth category averages between $3 million and $4 million per account.
The company is focused on a multi-asset approach to portfolio construction, with an emphasis on diversification, innovation and active management.
“We construct portfolios on the risk profile of that end investor,” Beaman explains. “Whether you are a mass-affluent client or a high-net-worth client, the investment philosophy at Brinker Capital is the same; it is consistent.”
Brinker Capital uses diversification to manage risk, and a mix of active and passive instruments in client portfolios.
“We believe the active management overlay within the portfolio allows us to grab performance while still managing risk,” she adds.
That diversification is anchored, in part, to alternatives and real assets, including global natural resources, commodities, equities and real estate.
Brinker Capital was founded in 1987 by Chuck Widger as a subsidiary of Mutual Benefit Life Insurance Co. and became an independent investment company in 1991. Now executive chairman, Widger’s original business plan was to provide institutional-quality investment advice to the individual retail investor, and that goal has not changed. Beaman joined the company — which was named after Brinker Road, the Barrington Hills, Ill., street where Widger lived at the time — in 1989, after a stint as an auditor at Ernst & Young.
During her tenure at Brinker Capital, Beaman has occupied a variety of roles, including regional and national sales positions, business development and client service posts in New York and New Jersey, and then COO and CFO roles at the company’s suburban Philadelphia headquarters in Berwyn, Pa. The move to the CEO’s office was not an easy transition. In year six of her term as chief executive, Beaman says she has only recently achieved a sense of mastery over the job. She did so with the help of an executive coach, who was introduced to her by Widger.
“The CEO role is very challenging,” she acknowledges. “I had the interest, and I had the enthusiasm to do this job well, though I did not have the tools. But the tools [my executive coach] gave me have allowed me to do the job much more effectively.”
Beaman’s executive coach is one of several mentors, including a number of Brinker Capital partners, she credits with her professional advancement,
“When I first moved into sales, I was terrible,” she admits, “and there were many financial advisers that spent time teaching me how to be a better salesperson. Chuck Widger has been phenomenally generous to me over our 31 years, giving me direct feedback about what worked and what did not.”
She combats the pressures of being CEO by eating well, exercising and immersing herself in recreational reading. It was her reading of E.B. White’s Charlotte’s Web as a young girl that fired her passion for literature. Today, she counts Jane Eyre by Charlotte Bronte as her favorite novel, and the classic Viktor Frankl memoir Man’s Search for Meaning as the most influential book she has read.
STAYING THE COURSE
Beaman oversees short-term (120-day) and longer-term (24-month) plans with her team, during which they examine each of the disciplines within the organization, look at the markets they are trying to serve and the execution around achieving that.
“It gives each of the senior team members an opportunity to revisit the planning we have done,” she says. “Some things come off the list because they were bad ideas; some things we fast-track, and then some things we are just going put off until next quarter or maybe the next year.”
A big priority for Brinker Capital this year was ensuring its high-net-worth strategy was in place and its product offerings filled out.
GOING INORGANIC — MAYBE
All the growth Brinker Capital has registered to date has been organic, though Beaman says the company is looking for potential opportunities for inorganic growth in the form of strategic investments in organizations that could make good partners. She points out, though, valuations in the private wealth advisory business are currently high, and the company fancies itself a “value buyer.”
While many RIAs are pursuing a consolidation strategy — consuming smaller RIAs to achieve the scale required to afford the technology, marketing and compliance resources required to compete at the highest levels — Beaman says she and her leadership team feel no such pressure.
“At $23 billion, we are feeling financially stable,” she says. “We will not be the biggest firm, but if we do a good job in service, we can withstand this change. Right now, we are staying focused on delivering a high-quality result.”
Indeed, Beaman’s vision for Brinker Capital over the next five to 10 years is to add more clients and services, and she sees the high-net-worth space as “opportunistic,” where clients are looking for customized and personalized experiences, something Brinker Capital excels at, in her estimation.
Beaman frequently speaks at industry conferences and likes to talk to audiences about culture, diversity and team building, which are among her favorite activities as CEO, though building product is chief among her favorites.
“I really love product development and the research involved,” she says. “I did product development and product management for about five years, and that was probably my favorite part of the job.”
Her understanding of product helped immensely during her years as a product wholesaler, selling to advisers and working with the end investor, from 1998 to 2004 in the New York City area. Beaman asserts a financial professional does not truly understand their products until he or she has to sell them to someone.
“That experience marked me in a big way,” she recalls. “It made me more empathetic to our sales professionals and how hard their jobs are.”
As Brinker Capital celebrated its 30th anniversary, Beaman, who was named one of the private wealth industry’s Women to Watch by InvestmentNews in 2018, says she and her leadership team took the opportunity to revisit the firm’s culture.
“As a leader, you must ensure that you’re living your values at work,” she told the news outlet, identifying her goal as keeping the organization a meritocracy and an inclusive place to work.
The company’s core values have evolved to reflect its authentic culture that supports the needs of the workforce and clients it serves. Brinker Capital’s core values include: people first, independence, entrepreneurial spirit, service driven, and a focus on outcomes.
Culture is also assessed by measuring outcomes, such as the representation of women and their progress through the firm, she says. One form of support is the practice of benchmarking jobs against outside indicators of what they should be paying, rather than looking at what jobholders have earned in the past, which influences both compensation and advancement opportunities.
The challenge is constant, Beaman says, adding: “With culture, if you don’t keep watering it, especially with positive feedback, it can get away from you.”
Mike Consol (firstname.lastname@example.org) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.