How to Offer ‘Pure Advisor Alpha’
FRIENDS AND COLLEAGUES thought they were slightly insane. In 2004, Josh Itzoe and Pat Collins, then in their late 20s, quit their respective wirehouse firms to strike out on their own with $15 million in private client assets and 800 square feet of office space.
Confidence in themselves and passion for what they do resulted in Greenspring Advisors, a premier wealth management and retirement plan firm based in Towson, Maryland. Today, it has $4.5 billion in retirement assets under advisement serving upwards of 50,000 participants.
“It’s been an incredible run, and I think we’ve built a really wonderful firm,” Itzoe, a popular podcaster, author of two books, and a leading advisor, says. “The best days lie ahead for Greenspring, without a doubt.”
If there’s a sense of finality in that statement, it’s by design. Colleagues are once again questioning Itzoe’s sanity and his recent decision to leave Greenspring (and the incredible success he’s enjoyed) to again strike out on his own.
“As I move into the second phase of my life, I want to focus on the journey to significance,” he says with sincerity. “I stepped back and thought, ‘What if I could take all of the things that I’ve learned and experienced; all that I built and created, and all the expertise I have developed, and open-source that not just for one firm, but for the advisory community in general?’ I’m a passionate advocate, and I believe that every plan in America should be with someone like us.”
No doubt, and the next step in his career is entirely focused on helping advisors “work smarter, work faster, delight their clients, build better practices, and drive successful outcomes for participants.”
Noting that he’s particularly adept at translating ideas into insights and insights into deliverables, he’s about to launch two initiatives. The first is an extension of Fiduciary U, his popular podcast. Called the Fiduciary U Advisor Community, it will bring advisors together to idea-share, network, collaborate and help one another.
The second is FeeMetri(k)s, a recordkeeper fee database that acts as an internal decision support tool.
“It’s a crowdsourced, validated platform, and the anonymized recordkeeping data comes from advisors,” Itzoe explains. “It allows advisors to get a holistic view of their client base and see how the market is pricing their clients from a recordkeeping standpoint. It’s meant to be simple but will draw out insights.”
Arguing that “helping right-size fees is pure advisor alpha,” advisors can be a hero to their plan sponsor clients, who can, in turn, be heroes to their employees, a virtuous cycle.
An anecdote involving a longtime Greenspring client illustrates his point. The plan had roughly $10 million in assets with a single provider, no advisor, and all proprietary funds when Itzoe and the team took over.
He implemented a fixed-fee recordkeeping approach and streamlined the fund menu.
“They were paying 1% all-in when the plan was $10 million,” he says with palpable pride. “It’s grown to about $75 million today. Their all-in costs are 18 basis points. That includes the record keeper, Greenspring, and the fund fees. If they’d kept the status quo, they’d be paying somewhere around $750,000 a year. Instead, they’re now paying around $200,000. That half a million dollars in savings every year is all accretive to the participants. That’s money in their participants’ pockets.”
Josh Itzoe is Co-Founder, Partner and Chief Strategy Officer of Towson, Maryland-based Greenspring Advisors.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
