Market corrections are a normal part of the business cycle and the COO must be ready to lead the team in pivoting whenever the situation calls for it. Valerie Rivera, the COO of Freedom Street Partners & Investment Executive, RJFS, is doing just that in the middle of this double whammy of a crisis. Facing a health and market crisis, the organization has adapted by working through remote teams, using regulations to their advantage, and looking for opportunities to grow their team and leadership in preparation for the post-COVID resurgence. Adaptability is the theme of this company’s story and it shows its true potential that sets them on a path of success beyond the downtimes. Listen in as Valerie shares how they are achieving all of these with host, Cameron Herold.
With eighteen years in the financial services industry, Valerie is Series 7, 66, and 63 licensed. Valerie obtained her Bachelor’s Degree in Finance at Ramapo College of New Jersey. She moved from New York to Virginia in 2002 where she began her career at American Funds as a Shareholder Services Representative. She became a Financial Advisor for Edward Jones in 2004, where she remained until joining Freedom Street Partners in October of 2017. Valerie serves as Freedom Street Partners’ Chief Operating Officer. Valerie is a member of the COO Alliance.
I have to read a quick disclosure because of the industry that they’re in. Securities offered through Raymond James Financial Services Inc. member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors Inc. Freedom Street Partners is not a registered broker/dealer and is independent of Raymond James Financial Services. Investing involves huge risk and you may incur a profit or loss regardless of the strategy selected. COO Alliance and Cameron Harold are not affiliated with Raymond James.
We have done the disclosure and we can dive into the interview. I’m going to read something else for fun. My broker up in Canada sent me something and said that this is the fifth-best buying moment of their career other than 1974, 1982, 1987, and 2008. This has nothing to do with Raymond James. I’m excited because I feel it’s a great opportunity to be buying stocks because there’s a lot of great companies out there. We’re not going to talk stocks. How are you doing, Valerie?
We’re doing good. Obviously, we’re in unprecedented times. We’re all feeling a little uncomfortable.
It’s a bit of a strange era. We’re right in the midst of the shutdown of the global markets and the global economy and the global healthcare systems and schools. It’s March 18, 2020. Restaurants are being shut and schools are being shut. There’s a little bit of a global panic related to the COVID-19 healthcare crisis. That’s what you’re talking about. Why don’t you tell us a little bit about your role with Freedom Street Partners and how you guys are set up? I’ll dive into some questions related to you in the COO role as well.
When I started first with Freedom Street, I was a utility player, I would say. I dove in, did whatever was needed whether it was working on our financials, calling clients, placing trades, helping other financial advisors, and supporting them to stepping into the role of Chief Operating Officer for Freedom Street Partners. We’ve come a long way in the years that we’ve been in business. COO Alliance is one of the things I’m doing right to help coach myself and talk to other COOs that are out there that are going through the same experiences. That’s been helpful. What we do at Freedom Street is not only with our clients, but we also help other financial advisors build a continuity plan for their business. We help them through transition and succession plan and help transition their clients as well to affiliate with Freedom Street.
It’s different from a lot of the different financial advisory firms out there too. Prior to being COO, what role were you in at Freedom Street Partners? Tell us about the transition from your prior roles to the role you’re in now and how did that go?
My prior role before, my title was Director of Operations and that meant a lot of things because we have two sides of the house. We have client service and we want to make sure the experience for our clients is there, that they’re receiving communication from our firm. We’re running an ethical and profitable business and making sure that they experience current events, they hear from their advisors. On the other side, we have our operations that are helping other advisors transition their practices. That entails a lot of background work to make sure that their transition goes smoothly. A lot of it’s coaching, making sure that they are comfortable with the process, that they know the steps that they need to take with their business and that their transition goes smoothly. Before, I was in both parts, running around and making sure clients are served and then also making sure our advisors are being able to transition their practice smoothly.
Tell me a little bit about what’s happened to your role and how you’ve had to operate in your role. As companies are starting to move towards virtual teams due to this COVID-19 crisis, how have you had to adapt during that?
It’s interesting times. We have a people-first mentality at our office. Because we focus on people first, we opted to go remote. We are all equipped with laptops and able to do our job remotely, but it’s the first time we had our entire team not in the office together. It has been challenging trying to keep in touch and make sure we know what each person is working on. It’s been a lot of phone calls and Zoom meetings. That’s been an interesting challenge to try and get through with the team.
Is that how you’re staying on top of it with phone and Zoom? Are you using any other technology tools to stay on top of it?
Those have been mostly what we’ve been doing, sharing screen so we can see what someone’s working on whether it’s spreadsheets or information and a lot of video conferencing.
You’re also in the midst of a slightly different crisis, for most companies as well. We’re having to start a little bit of a financial meltdown where the markets are finally correcting. It’s been years since the last correction, 2008, 2009. We’ve been due. A lot of people either don’t remember it or are too young for it or they simply thought that we were going to continue on forever. You’re dealing not only with the medical crisis but also simultaneously, a lot of clients and advisors are probably worried about the markets and how fast they’ve corrected. How are you dealing with that additional strain on the business?
It’s definitely an interesting time because half of our team has been through a market correction. Since that last one was years ago, there’s a lot of advisors on our team and their clients that this is their first time going through it as well. Those of us that are seasoned have been coaching our advisors on what to say and making sure that they know that this is an imperative time to be reaching out to clients. A few things here. We’ve done some videos with market updates from our CEO, Scott Danner. We sent those out to 100% of our clients through email.
We also did a market update town hall before quarantining started with Coronavirus where we had a gathering for clients to come out in the morning, afternoon, and evening where they can come out and ask questions, have a town hall style market update. We followed that up with phone calls to 100% of our clients. We’ve been busy on the phones and checking in. We all feel uncomfortable during these times and that’s okay. It’s normal. It never feels good when the market goes down. The important thing is that they know that we are here for an outlet for conversation. When they have questions, not to turn to the news or media for them to get their answers, but to ask us.
You guys have probably got some pretty good lessons for businesses in general on how to deal with a crisis. The financial industry has to deal with a crisis and crisis communications and panic in terms of customers and employees every eight years-ish. Can you give us some specific things that you tried to do? I love the whole video communication and messages from your CEO and to the teams. Are there any ways that you try to phrase things differently? Are there any tones or different communication styles you try to use that are different when it’s business as usual?
The key thing is because there’s so much panic out there, you have to be the calming voice to your clients. You have to put things in perspective when things are exaggerated and everything is over the top on the news. You have to remind them that things are short-lived and that we’re in the moment. While that might seem scary, it’s not the long-term. You shouldn’t make short-term decisions on long-term goals.
Don’t make the short-term decisions on long-term goals. That’s a key point because a lot of people are reactive and they are making the short-term decisions, even if it’s short-term decisions related to your business in this is a health crisis. I’ve heard of people that are laying off 25 people. I’m like, “Did you think about options like putting them down to part-time?” “No, we didn’t.” You have to be cautious and careful about making rash decisions. What do you tell people to try or to keep them calm during these times? When you know that things are going to be alright and we’re going to turn around again with the market, we’ll turn around again with the health crisis, does that give you guys confidence in dealing with this COVID-19 issue?
I think so. It’s important to stay calm and to talk to people. Remind them that we do understand and we do feel the same, and hearing them and how they feel. Listening is key and letting them speak and not diminishing their feelings, staying with the calm voice and reminding them to stay in the course and to let them know what we’re doing. For instance, on our business side of things, we are rebalancing portfolios and taking tax losses that we haven’t been able to do for many years for clients. Hopefully, when they’re filing taxes, they can look back and be grateful for some of the downturn and some of the advantages we were able to get out of the market.
You’re crystallizing some of those tax losses so they’ll be able to use them later. That’s smart. That’s a good point. That’s a strategic move where some people are panicking and not thinking about it at all or they’re not dealing with it in the right way. Talking about your business in the financial services sector, you guys are often under a lot more regulations than many businesses are. How do you operate around those regulations within those regulations? How do you use regulations to your advantage as well? Can you give us some insights around those?
Highly regulated industry, you have to run an ethical practice first before anything, or any business. We always say there are three things, taking care of your people first, having a process, and then running an ethical practice. If you’re doing those three things, we believe that you can run a profitable business. You have to do those three things first. The important thing in our practice is that as regulations or rules change in the industry, we communicate those with our clients. We have one coming up. REG BI is a new regulation that’s coming out by the SEC and we have to abide by it. There’s going to be some additional disclosures that are going to go out to clients. What we’re doing to prepare is we’re confirming email addresses and making sure that those are correct and letting clients know that they’re going to be receiving some disclosures in the mail and what they are and what it means to them. If we stay ahead of it, then it’s not a surprise and it fields any future reactive questions that we may be receiving.
Is that true of your training as well and trying to stay ahead of the curve with training? It seems like in the financial service industry, you guys have to go out and get more updates every year with your training. Is that something that you find helpful or is that a restriction on your business?
It’s not a restriction. There are different things. There’s always continuing education, which are requirements. We have to make sure our licenses are staying active and that we’re completing the course required each year on ethics and how to deal with senior investors and anti-money laundering. These are some of the things that we have to do each year for training.
I did a video about training our people. We’re in an interesting time. If we focus on training our people and growing our skills, we’re going to come out of this downturn much stronger. During a boom time, we often say that we don’t have time to train our people. During this time when we have a lot more time and people working remotely, my bet is that a lot of people aren’t going to bother doing any of the training. It seems to be an excuse where you’re forced to do training as well. Is there any training that you guys do outside? You mentioned you’re being a part of the COO Alliance is something you’re doing to work on your skills. Is Scott, the CEO, a part of any organizations and working on his skillset? Do you work on any other leadership skills across your organization or your management team and growing your people?
We definitely do. We take pride in it. We’re always looking for opportunities for team members to grow. Our broker/dealer, Raymond James, offers meetings each year. They have a national conference, which we send some of our associates to. They have a women’s symposium, which I’m supposed to be going too. They also have training for support staff. We send them to the home office so they not only can see the departments and the people and the buildings when they’re calling and communicating with our home office but also get some technology training and meet other people in the field is important. We also always look for opportunities for personal growth. We had an employee that we were getting ready to send to a Tony Robbins event for some personal growth, and that got canceled. We look for opportunities outside that’s work-related.
Another change that you’ve had to encounter because of this whole COVID-19 and the whole social distancing that we’re going through and the family lockdowns and kids at home. You’re also a mother of three kids. You’re having to take care of kids while you’re also operating a business. How has that change impacted you? How have you had to adapt to that?
It’s been pretty interesting. My husband is in health care. He’s out and about. I’m trying to stay away from him. I locked myself in my room to do this show. What I did was I’ve created a schedule for them each day, down to each minute of what they’re supposed to be doing. I’ve incorporated chores and schoolwork and free time into their dailies and outside time. I make sure they get some fresh air each day. I work that around conference calls and meetings for myself. When I was going to be on a conference or doing this podcast, I have them outside playing so that they’re not disturbing me.
It’s funny how we’re going to have to adapt to all this stuff. It’s interesting watching companies have to deal with going remote and how many major large organizations are adapting to this quite quickly. I spoke to a client of mine in Colombia who has 800 employees. He’s ramping up to 1,100. He’s got 750 of his 800 people working from home. He’s got the next 50 getting ready to work from home. He’s buying the last 50 people laptops and Wi-Fi access so they can be at home. It’s pretty interesting to see how companies that used to be 100% location-based are able to adapt during this change.
It’s interesting to see how many companies are going to maintain that and see the cost savings maybe on not having an office location, but maybe shifting to something that can work remotely. It’s forcing us to do this trial period of how it works.
Necessity is the mother of invention. Being forced to do this is going to all of a sudden give people the experience of how it works or could work. Not only just to be able to get rid of some expenses like the office, but also be able to hire some of the best talents regardless of where they live. We’ve been locked in many companies, this whole idea that it’s 9:00 to 5:00 and people have to come to our office and they’re probably going to have to live within a half-hour of the office. It’s pretty tough and restrictive on where to get those people. Do you guys find it tough in your industry to find great talent?
Yes and no. We have eight office locations and we’re spread out between a few different states. We do have remote locations, which can be challenging to be managing. One of the things I face on a daily basis is how to manage people that are not within walking distance or I can yell down the hall to. Those are some things that I’m still learning through on how to keep up with coaching and communication and making sure that they feel like they’re part of our culture.
Why do you have multiple offices? Is it because you’re trying to operate in multiple states? Have you done acquisitions? What’s happened there?
We have some businesses that have affiliated with us. They’re partners with our firm. They’re operating their own independent practice, but they tap in to our shared services platform. They still require coaching and communication from our company. We do have another set of offices that we’ve acquired and we’ve built markets around that location to have an office location that’s close to where the clients were.
What have you learned during those acquisition periods? I’m curious about what skills you’ve learned as a company during that period of time.
It’s important to be in communication daily with advisors going through transition and/or if they’re retiring and to make them feel comfortable. It’s an emotional time period for financial advisors transitioning their practice, whether they’re phasing out or they’re transitioning from another firm. I feel like each time we do one, we learn from it. There’s always something different that occurs. The operations part of it is one thing and making sure paperwork is done and clients are transitioned and their accounts are coming over. It’s another thing when you’re dealing with different personalities in a highly stressful time for them.
I’m curious about how you get that culture fit right in the acquisitions. I was talking to a CEO and they’ve done five acquisitions. If you were to give us the top three things to get an integration of a new office happening under your overall banner, what do you do to make sure that happens well? What do you start with? What do you focus on first?
We’ve learned through failure that it’s important to have people on the ground, especially the first two weeks of somebody transitioning to have a member of our team on the ground and to be with them holding their hand through the process. That’s more of the emotional handholding more so than the operational. It’s something as simple as their phone lines aren’t working or a client doesn’t want to come with them can derail their focus. Keeping them focused on what matters and what’s important is better to do in person than have somebody trying to do that over the phone.
Preparing, letting them know the process ahead of time, the steps, the timeline, what things will look like, what will be required, what the expenses will be. Having them know that ahead of time usually helps so then they’re not frantic or surprised on the back end when they see something come through. We’ve learned that as well going through the process. It’s always better to let them know upfront.
In terms of communication with them, what kinds of things do you have to make sure that you’re communicating or getting across to them in an acquisition to keep them calm? Do you talk to them about transition? Do you talk to them about firing? Do you get them to meet the people on your leadership team? I’m curious about what you do there.
It’s a transition and we keep reminding them that. It’s not like you’re going to come over and then this is going to happen immediately. It’s a phase-out. We try and we’ve come up with our process. We give them a timeline of what’s going to happen. First, there’s going to be an introduction letter of our team to your clients. We’re going to have a welcoming, an open house event where they can come in and they can meet us, the team, face-to-face. They’re going to start hearing our voices over the phone for the next several months.
We phase in little pieces for the clients. By the time the advisor transitions out, which we end with a nice retirement party for the retiring financial advisor where they can invite their friends and clients. By that time that period comes, which is usually anywhere from 12 to 24 months, depending on the advisor, the client already knows us. They’ve met everybody. They feel comfortable with the team. It’s a smooth transition. They almost don’t even realize the phase-out.
How about in terms of the actual negotiations and doing the actual acquisition itself? What have you learned about negotiating and doing some of those negotiations?
I leave that to Andrew Gregory who leads up our recruiting efforts and Scott Danner, our CEO. They do most of the meeting and negotiating and recruiting with the financial advisors. There’s usually a pass down to me and my team when it comes to the operations and the transition to make sure that goes smoothly.
You’ve moved into the COO role. Andrew Gregory has moved out of the COO role. Is that correct?
How did that transition go where you have one leader who’s been in there for a while and then you’re transitioning to a new leader? What did you guys learn from doing that? What do you think you did well in that transition?
I was the person in the office. I dealt with the employees. I knew everything from the bottom up and the top down. We realized when it comes to a Chief Operating Officer in a company, the person that’s in the midst of everything, every day, is that role filler. Andrew works in a different office in the headquarters so he wasn’t there every day. He’s focusing most of his efforts on recruiting, which requires some traveling out of town. We felt like I was filling that role already. It made sense for me to have that title. While it’s a title change, the role hasn’t evolved yet. Before this, we were in the hiring phase to start getting it more departmentalized where I had some managers leading up some of our departments to help me outs so I wasn’t hands-on with everything.
It sounds like you guys did it correctly. You recognized that you matched the title to the role. You don’t hire a role and give them work to do.
We’re going through the phase of transition. We hired a director of client operations, some elite client service, the client service side. We’re going to be hiring an operations manager to handle the operation side for financial advisors.
What do you look for in the hiring process? What have you learned in doing that hiring process? Do you have any good tips or tricks for us that help you do proper interviews and proper selection?
We phone screen first. I usually do the phone screening. If I feel like they’re meeting the criteria of what we’re looking for and they have the experience of what we’re looking for, then the next thing we do is we send them a DISC Assessment for them to take. We see that if their personality matches with the personality of the position that we’re looking for. If we’re hiring somebody to do our administrative work, we need a detailed person to do all this paperwork and follow checklists. We want to make sure that they’re like an SC, that they’re a detail-oriented person and that they’re not a DI, someone who’s like our CEO, who’s going to be more big picture. I need someone who’s going to be worried about the details.
You are using the personality profile to have your screen for the behavioral traits. What do you interview for, cultural fit and skillset afterward?
Yes. Cultural fit is part of my phone interview. I ask them what they’re involved in the community, what they do outside of their professional experience. We are always looking for community involvement, it’s important in our culture. Everybody on our team does something community-wise. Our CEO runs a wine festival through the Chesapeake Rotary Club here that’s raised over $1 million and give back to local organizations like the Boys and Girls Club and the hospital here. We want people who are involved.
How about all the multiple offices that you’re running? How do you stay communicating with them? What tools do you use to stay in touch with them and communicate with them?
We have a quarterly newsletter we put out, which we usually highlight a new team member with photos, and then it also gives some photos of any events that teams have done for their clients. It gives some market information and updates as well. Twice a year, we have a face-to-face meeting where we bring everybody in and to discuss upcoming vision objectives for the year or where we’ve come in the past year and any ideas that people want to share.
It’s like the State of the Union address with them all.
We try and make it a relaxed atmosphere. Our last we did was at the beach.
Do you bring all the offices together? How often do you bring all the offices and all the employees together?
We try and do it twice a year.
How about you and Scott? Scott is the CEO, who’s probably high D, high I. Your Kolbe profile is probably slightly different. Your DISC profile is different. How do you and Scott stay on the same page in terms of his vision of the company and your operations and execution? How do you two stay in sync?
We’re good because we’re opposites. He’s the DI and I’m the SC. Personality, we get along great. We’ve also been friends for many years. We’re able and comfortable to talk freely to one another. If he comes up with an idea and I think it’s a bad idea, I tell him. I’m not afraid to have that conversation with him.
Was that a learned skill for you to be able to do that, for you to be able to have those tough discussions?
No, I don’t think so. I have an Italian background. Usually, whatever I feel comes right out. He’s Italian too, Scott. He understands it. We usually fight it out and then we’re over it until we get a decision made.
That is a strong trait to have and a strong skill in the CEO-COO relationship. I’ve always said that the COO’s job is to make the CEO iconic. The COO’s job is to tell the CEO what no one else has the courage to say. It sounds like you’ve already jumped over that hurdle quickly, which is pretty strong. When do you have to say no to him? When do you have to put the brakes on the CEO’s ideas because they often have so many?
Sometimes I have to put into perspective and say, “I’m not diminishing your idea. I don’t think it’s something maybe we need to jump on right now because we have all these other things going on. Let’s revisit it.” Sometimes I’ll postpone the ideas. Maybe, financially, it doesn’t make sense, I’ll say, “Great idea. That’s going to cost a fortune.” He says, “Is it?” He’ll make me go back and do the research to see what it would cost and what’s the cost of not doing it.
You show some of the ROI analysis on it as well. What would the ROI be of our people or time or our money? What are you working on the day-to-day? What do you focus on as the COO?
There are some days I get bounced around so much. I reflect back and go, “What the heck did I do today?” You can’t pinpoint it. What I work on daily is coaching, training, making sure my team is following through on processes. Can we perfect some things that we’re doing? What do we need to change? What should we keep doing that’s working good? In coaching, there’s a lot of phone calls on a daily basis of coaching teammates, checking in, and making sure that our teams are operating okay and they have all the tools they need to run and operate their business.
In terms of your growth, is there anything that you’re focusing on a specific learning or specifically getting better at?
We say all the time here that we’re like a tech startup company. We’re growing faster than we know what to do sometimes. We did come up with a good plan. We’ve hired some new associates, which has been challenging, getting them trained remotely. The direction we’re going into, we’re creating some departments. We have some more accountability and oversight, which has probably been lacking a little bit up to this point because it all fell on my shoulders. Trying to execute on many things a day, but then also provide oversight for the team is a little difficult. How much time do you spend on each thing? If you’re executing all day, you don’t have time to do oversight and go behind people.
We’re often trying to work on the business and in the business at the same time, that’s part of what we have to work on. It’s a little bit tough. If you were to go back to your 22-year-old self, you’re graduating from college, you don’t have all the numbers behind your name yet, you wanted to give yourself some advice, what advice would you give the 22-year-old Valerie that you know now to be true but you didn’t know back then?
Dream big. Don’t diminish. What you do is important. Keep working hard. I learned that from a young age. I worked at an Italian bakery from the time I was thirteen. I worked there for ten years. It taught me many things about customer service and putting people first and getting up at 6:00 AM on the weekends when you’re thirteen to go open the store. I learned a lot through those times. I don’t know if I ever thought I would be doing what I’m doing today.
You certainly carry a lot of those lessons with you, which is great.
what’s important to know, for a COO position, it’s okay to be the person in the background. You don’t have to be out in front of everybody and be the one that is doing all the speaking and coming up with all the grandiose ideas. Execution and being detailed and doing the daily operations are as important as the visionary.
That’s a great lesson to wrap with. I’ve always talked about the Phantom of the Opera, the play on Broadway where you have maybe 2 or 3 people, at most, ever on stage. You have 150 backstage making sure it happens. You’ve got the tickets, marketing, costumes, lighting, set design, music, the orchestra, and all these people having to make sure the play happens, but only three people on the front stage. Without the backstage, the show doesn’t go on. Without the front stage, the show doesn’t go on. It’s a true yin and yang partnership that the CEO and COO have. Valerie Rivera, the COO of Freedom Street Partners, thank you very much for sharing with us on the Second in Command podcast.
Thank you, Cameron. Hopefully, we can have COO Alliance after the pandemic.
We have lots more events coming up. We’ll either be running them in person or running in virtually if we’re forced to. We got lots more stuff on the calendar.
I look forward to it. Thanks, Cam.
Take care. Thanks.
About Valerie Rivera
COO of Freedom Street Partners & Investment Executive, RJFS. With 18 years in the Financial Services industry, Valerie is Series 7, 66 and 63 licensed. Valerie obtained her Bachelor’s Degree in Finance at Ramapo College of New Jersey. She moved from New York to Virginia in 2002 where she began her career at American Funds as a Shareholder Services Representative.
Valerie became a Financial Advisor for Edward Jones in 2004, where she remained until joining Freedom Street Partners in October of 2017. Currently Valerie serves as Chief Operating Officer for Freedom Street Partners & Investment Executive, RJFS.
*Securities offered through Raymond James Financial Services, Inc. member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors Inc. Freedom Street Partners is not a registered broker/dealer and is independent of Raymond James Financial Services. 516 Innovation Drive, Suite 205 Chesapeake, VA 23320. Office phone number (757) 977-0998.
Investing involves risk and you may incur a profit or loss regardless of strategy selected. COO Alliance & Cameron Herold are not affiliated with Raymond James.