Rune Medhus' successful practice continues to thrive despite the current pandemic and the unpredictability in the markets. Recently, we spoke with him about the meaning of client service and how he uses the B. Riley Financial platform to enhance his ability to provide unique investment opportunities for his clientele. Read on to learn more about why Rune is one of our financial advisors in the spotlight.
How did you end up in the wealth management business?
After serving in the Norwegian military, I immigrated to the U.S. to attend commercial flight school because I had hoped to become a commercial airline pilot. To get additional training hours, I started out as a flight instructor in Galveston, Texas, where I ended up meeting my wife. We realized that my being a pilot would be impractical for raising a family, so I decided to give the wealth management industry a try.
Early in my career I worked in private equity and arbitrage trading, but it was not as client-centric as traditional wealth management. I eventually shifted my focus to retail investors, and in doing so, adapted and changed my business model a few times before landing on what felt most sensible and "true" to me and my clients.
What's changed in the business, and how do you view the changes that have taken place in the wealth management industry over the past decade?
Given the times we're in, I do think the need for wealth management services is more prevalent now than ever. There is so much information being disseminated to investors, and problems can arise when they try to do things themselves, often driven by fear and emotion. I also think there has been a shift towards fee rather than commission-based advising, and as such, financial advisors have had to adapt their business models. My own business is largely fee-based, and the approach I take to client service is a holistic one to financial well-being.
Talk about your specific role, any area of specialization you have, and what you're doing day to day at B. Riley Wealth Management
Most of my clients are high net worth individuals with significant assets to manage. They range from individuals to CEOs of large public companies, and all are knowledgeable about managing portfolios. When things get tough and volatile in the markets, however, I step in and guide them to ensure they avoid making ill-informed, emotional decisions. I do asset allocation on a discretionary basis, but ultimately, I make the decisions on their behalf and there is no second-guessing. We constantly review things to make sure we're aligned, and that goals are being met. My value proposition to them is that I will, to the best of my ability, make sure they don't make costly emotional mistakes with their portfolios.
I think that financial advisors should act as the metaphorical hub of a wheel where they are in the middle, pulling in all the spokes. Advisors managing high net worth client accounts must consult with everyone; that means speaking with clients' CPAs, lawyers, estate planners, and others involved in their financial roadmap. Advisors need to understand the big picture, which involves asking pointed questions. Clients do not always know what they need until they're asked. That approach to client service is imperative for success as an advisor and has helped me to transform my own practice from one that was once based on fees, to one that is centered around my clients' financial well-being. Advisors must provide clients with the value of unique advice; otherwise, you are not providing them with additional value. The advisor fee is only one piece of the puzzle.
How have you been able to thrive amid the challenge of remote operations and managing clients?
Fortunately, I have been able to stay safe without missing a day in the office. I am adamant about being available 24 hours a day, seven days a week for my clients, and I never want anyone to hit my voicemail, especially during a crisis. Over the past year, I have made sure that clients are aware that I am available and in the office. In addition, I email them pertinent information distinguishing fact from fiction, providing commentary where relevant, with the goal of easing their fears. Being a well-informed, available pillar for my clients has been my mantra.
How are you taking advantage of the larger firm (RILY) to help your clients, and what has it meant to be part of a larger company with a full suite of financial solutions in your arsenal?
We now have several in-house capabilities that I can discuss with current and prospective clients, like investment banking, appraisals, advisory and capital-raising. It's exciting because there is no need to hire a third party on behalf of my clients. I would not hesitate to use our in-house appraisal services as they are valuable and distinctive. If a company founder is looking to sell his or her business and needs a valuation, he or she can use our platform, and it's a win-win situation. In bringing together all these resources, for which I am the source, it strengthens my position as a financial advisor.
What tools and resources do you have available at B. Riley Wealth Management that contribute to your success?
I do a lot of my own research, and I integrate market reports from our Chief Investment Strategist, Paul Dietrich, into my practice. I also like to look at research from our investment banking arm, B. Riley Securities, as it allows me to have an idea about what is happening around various sectors.
What areas do you see currently as the greatest opportunity for success in the Wealth Management Business?
I think advisors should concentrate on the holistic approach I discussed above. Avoid becoming a commodity by adding value through advice beyond discussing fees and returns. Regarding the markets, because of stimulus payments and the inability for consumers to spend money outside their homes, they are saving, and once the vaccine reaches critical mass, consumer spending will rise sharply. As things start to normalize, the industrial sector will benefit, as will publicly-traded entertainment and leisure companies. Ultimately, people will feel inclined to travel and spend money when they feel safe again.
If there was one tip you would share with business owners or investors right now about managing their finances well, what would it be?
I advise clients to keep political views separate from their investing outlook, and I do the same. I have seen them worry about a certain political candidate affecting their investments, but instead, they need to shift their focus to business and facts. I remind my clients to be discerning.
What's happening in your life now that you will move forward with you in after the coronavirus crisis is over that will help you grow your business and deepen your client relationships?
I
have deepened my relationships with my clients. We have each learned more about
what constitutes fact, and we have also learned the importance of exercising
caution about whom to listen to or to believe. The biggest takeaway: do your
research.