By Michael Kitces
– · 1 min read
Welcome everyone! Welcome to the 505th episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Andrew Rosen. Andrew is the executive chairman of Diversified, LLC, an RIA based in Wilmington, Delaware, that oversees approximately $3.6 billion in assets under management for 2,500 client households.
What’s unique about Andrew, though, is how he has navigated career and business decisions using what he calls a “pillow test” that helps him assess all angles of a given choice and ensure that his ultimate decision aligns with his or his firm’s values.
In this episode, we talk in-depth about how Andrew not only considers the implications if a particular decision goes ‘wrong’ but also what would happen if it goes ‘right’ (including the follow-on effects for the business), how Andrew applied this framework earlier in his own career by choosing to accept a job offer from a smaller RIA (which offered a much lower salary but significant professional and financial upside) rather than one from a larger financial firm (which offered a higher salary to start but might have come with a more limited set of professional opportunities), and how Andrew has also applied his “pillow test” when thinking about potential private equity investments in a firm (as even if everything goes ‘right’ with the transaction, it could still involve a loss of control and a potential clash of values).
We also talk about Andrew’s journey towards ownership at Diversified, which started with him working as an advisor before eventually buying out the firm’s founder alongside other advisors on the team, how Andrew and his partners have adjusted the firm’s ownership structure over time to ensure fairness to all parties (and how working with industry consultants has helped the firm shape its approach), and how Andrew’s firm has incorporated acquisitions into its growth strategy (and how he applies his “pillow test” to them).
