Welcome back to the Alt Goes Mainstream podcast.
Today’s episode digs into how the CIO of a growing multi-billion dollar wealth management firm thinks about customization and differentiation by building out private markets capabilities.
We sat down with John McArthur, Senior Partner and CIO at $3.6B AUM Krilogy. Founded in 2009, Krilogy provides comprehensive financial planning and investment management services to HNW individuals, families, and business owners.
Krilogy is charting a growth path — and to chart a growth path, John and his team are thinking about how they can thoughtfully grow their business.
With John at the helm as CIO, they have been strategic with their approach to private markets and have increasingly focused on ways that they can create customized and differentiated solutions for their clients.
John took 11 years of experience in wealth management and financial planning at A.G. Edwards & Sons and Morgan Stanley Smith Barney to Krilogy, where he joined his former University of Missouri college football teammate, Kent Skornia, to help quarterback Krilogy and their clients to financial success.
John is thoughtful in his approach to private markets and how to provide solutions to their clients. We had a fascinating discussion about how wealth management is evolving and how private markets are critical to growing a wealth management practice. We discussed:
How John and team have grown and scaled an independent wealth management firm.
How John approaches private markets — and how that approach has evolved as they work with clients of greater size.
How to balance customization and differentiation with scale.
How can asset managers effectively educate and provide solutions to the wealth channel?
What’s still missing from private markets solutions for the wealth channel?
His views on product innovation, including evergreen funds.
Advice John would give to wealth advisors looking to invest in private markets.
Thanks John for coming on the show to share your wisdom and expertise on wealth management and private markets.
Clip #1: Loving the stress of responsibility.
Clip #2: Why create customized solutions for clients?
Clip #3: Getting in the game in the wealth space.
A word from AGM podcast sponsor, Ultimus Fund Solutions
This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.
To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.
Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.
We thank Ultimus for their support of alts going mainstream.
Show Notes
00:00 Introduction and message from our Sponsor, Ultimus Fund Solutions
01:56 Welcome to the Podcast
02:07 Introducing John McArthur
03:52 John's Entry into Wealth Management
04:33 The Role of Sports in John's Career
05:58 Lessons from Big Wealth Management Firms
06:34 The Journey with Krilogy
07:23 Challenges and Opportunities in Wealth Management
07:49 Growth and Evolution in Wealth Management
07:50 Private Markets and Wealth Management
08:21 Quality Control in Wealth Management
10:01 Organic Growth vs. Acquisitions
10:45 Client Service in Wealth Management
12:07 Differentiating Wealth Management Offerings
13:07 Importance of Private Markets Capabilities
14:00 Creating Customized Solutions
15:39 Challenges in Educating Advisors
16:45 Volatility and Market Changes
18:10 Private Markets in a Changing Environment
18:19 Building a Diverse Private Fund
21:04 Client Understanding of Private Markets
23:34 Behavioral Bias in Investing
24:18 Long-Term Investing Mindset
24:33 Evergreen Funds and Long-Term Returns
25:43 Portfolio Construction in Private Markets
26:16 Educating Advisors and Clients
27:15 Advice for Asset Managers
28:17 Effective Education Strategies
29:14 Future of Education in Wealth Management
29:38 Sourcing and Access in Private Markets
30:30 Navigating the Wealth Space for Small Managers
31:27 Customization and Differentiation in Wealth Management
32:57 Combining Big Brands and Niche Funds
34:23 Advice for Wealth Managers
37:46 Evergreen Funds as Core Strategy
38:34 Model Portfolios in Wealth Management
39:41 Favorite Alternative Investments
41:47 Contrarian Investment Ideas
42:58 Conclusion and Final Thoughts
Disclosure from Krilogy
Investments involve risk and unless otherwise stated, are not guaranteed. Past performance is not a guarantee of future results. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein.
Editing and post-production work for this episode was provided by The Podcast Consultant.
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