Brian Perry, CFP®, CFA, AIF®, Executive Vice President and Chief Investment Officer at Pure Financial Advisors, LLC, joined Keith Black, Managing Director of RIA Channel, to discuss growing a firm organically through systemization.
With $6.29 billion in discretionary assets and $2.93 billion in ETF assets as of March 31, 2024, Pure Financial Advisors ranks #39 in RIA Channel’s list of the Top 50 ETF Power Users. Since its founding in 2007, Pure Financial Advisors has grown to nearly $7 billion in AUM by adding over 1,100 clients annually in recent years.
Perry states that systematizing processes has helped to grow the firm. Using the analogy of hub and spokes, advisors and clients are in the middle of the system, with departments built along the spokes to support them. Departments include tax, operations, financial planning, compliance, and investments. Growing a firm is about the time that advisors spend with clients and prospects. Any automation of tasks that can free up advisor time to spend with clients contributes directly to the growth of the firm.
Pure’s investment process starts with planning, including the time frame, tax considerations, and the desired risk-return tradeoff. ETFs have evolved and grown to the point that they are easy to trade, low-cost, and tax-efficient. As the advantages and growth of ETFs have increased over time, they continue to grow share relative to mutual funds and single stocks in client portfolios. Mutual funds converting to active ETFs also contribute to the growth in ETF investments. ETFs can also facilitate tax-loss harvesting.
Perry’s investment process is top-down, seeking to find the right tool to accomplish the specified client goals. ETFs can be used for many investment objectives, but direct indexing and separately managed accounts (SMAs) typically use individual securities, while alternative investments are typically deployed in actively managed funds.
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