Michael Garofalo, CEO, Bering Street Advisors

In an interview with Invest:, Bering Street Advisors CEO Michael Garofalo discussed the firm’s growth, demand for comprehensive financial planning, and how technology and multigenerational expertise are reshaping the advisory business. “People can buy and sell stocks online by themselves, so the value increasingly lies in the knowledge base and comprehensive guidance we provide,” Garofalo said.

What have been the firm’s biggest milestones over the past year?

In the past year, we’ve added more than 100 new clients. That is one way we measure the health of the business and, in some ways, Houston’s economy. Most are local. We have clients in other states and countries, but for the most part, they are people we might bump into at the mall. Adding that kind of mass to the business is a good sign.

People are also feeling a wealth effect as the market moves up. Someone who works at Coca-Cola or Exxon, or a schoolteacher, is seeing a retirement account grow. Real estate prices have also been rising across the country, including in Houston. When people see that their homes and retirement accounts have increased in value, it is good for public sentiment. That creates demand for comprehensive financial planning. We determine what clients need, how to deliver it, and how to manage those relationships for years and decades. New clients also mean we need new employees, and we have hired great people. Finding more support staff and advisors takes time, but the economy seems strong, and the outlook is positive.

How does Bering Street Advisors attract talent and build its culture?

Our Monday morning meeting is central to how we operate. We look at how many new clients and assets we’ve brought in. As the business grows, we can continue to bring in good people. Everything we do is tied to the growth of our assets and client base, so as those figures rise, compensation for our advisors and staff grows as well.

Recognition also helps. We have been included on Forbes lists as a team and individually. Over the past 12 months, the Houston Business Journal has named us one of Houston’s best places to work, fastest-growing companies, and best family-owned companies. Those accolades give prospective employees and clients a better understanding of who we are. Longevity matters because people feel more comfortable with a firm that has been around for a long time than one that arrived yesterday.

What is the biggest financial-planning challenge clients face today?

Believe it or not, it is difficult to find good financial advice. There are 300,000 financial advisors in the country, and 100,000 of them are expected to retire over the next 10 years. Many people are retiring from companies such as Exxon and Chevron, as well as from Houston’s healthcare industry, and those companies need an advisor. We have fewer advisors and more people looking for them, and the industry is not replacing advisors as quickly as they are retiring.

The industry projects that within 10 years, the average advisor will need to manage about $500 million to serve everyone seeking help. When I entered the business in 1990, an advisor with $50 million under management was really something. Today, $100 million probably places an advisor in the Top 10%. The average advisor may eventually need to handle five times that amount.

Many people who are retiring want comprehensive financial planning but have difficulty finding it. We provide that service, and good work tends to earn more good work. The snowball is starting to roll downhill and gather momentum. A strong economy and strong markets compound that effect.

How is financial advice evolving beyond traditional portfolio management?

The days of being solely a stockbroker or portfolio manager are over. We are certified exit planners, and I hold a Certified Estate Planner designation. We help people navigate Medicare and Social Security, and we help them determine how to exercise stock options when they leave a company. The work involves much more than buying a particular stock. People can buy and sell stocks online by themselves, so the value increasingly lies in the knowledge base and comprehensive guidance we provide.

That is why most of us continue taking classes. I am two-thirds of the way through a certification in artificial intelligence and generative AI from the business school at the University of Texas. I’m not pursuing it because I think we can put every client into a computer and let technology take care of them. AI is among the most transformative technologies we will ever see. Everyone, whether a nurse, doctor, financial advisor, lawyer, waiter, or waitress, needs to understand it.

The next step is determining which parts of a process AI can support. We are growing dramatically: Revenue is up 41% year over year, and assets are up 16%. As we scale, more of our processes must be clearly defined. Where possible, AI can assist with or take over some duties currently performed by hand. We are focused on gaining the education needed to address what is coming in 2027 and beyond.

How do you approach succession and legacy planning for clients?

We are a multigenerational firm. When a prospect or client comes in, I explain that if my world is ever in turmoil, their financial world does not have to be. We have people here who are 26, 27, 30, 40, and 45 years old. My daughter is a certified financial planner and will probably start here next year. She has said she wants to come work for me, but I tell her she cannot work for me — she can work with me. That is how everyone here operates. We work together while also building something for ourselves.

I earned the Certified Estate Planner designation to better understand how clients’ money will pass to the next generation. When we conduct financial planning, the result is sometimes that clients can live exactly as they wish and still leave $10 million, $15 million, or $20 million to their children. Some clients respond that they do not want to leave that much money to their children. If they are likely to leave it, however, they want to understand the smartest way to do so.

What gives you confidence in Houston’s economy, and what is your outlook for the firm?

Houston is fortunate in several ways. It is geographically near the center of the country and in the South, where snow and ice create fewer concerns for people flying in and out. It is also a gateway to Central and South America. I have friends who travel back and forth to Mexico City every week as they develop business there and here.

The economy is diversified across industries such as energy and healthcare, making Houston a dynamic city. I grew up on the East Coast, moved here from New York City in 1993, and travel often because of my work. There is no better city in the country in which to do business. The absence of a state income tax is also a major advantage, particularly as other states continue raising taxes. It is one reason companies and people are moving here.

There is a new dynamic taking shape, with Elon Musk building factories and data centers around Houston, including a new chip manufacturing plant expected to employ 2,000 people. Houston is a wonderful place to be, and it is growing quickly.

For Bering Street Advisors, visibility in business journals, on television, and in newspapers helps establish the firm’s legitimacy and makes people more comfortable approaching us. We know that about 70% of the buying process has already occurred by the time someone calls. Prospective clients have read what is available online and researched us. When they come in, our job is to confirm their belief that we are financial planners capable of managing their money.

We are not selling them something they do not already have. They have the money and need someone to manage it. As long as everyone on our team follows our process and remains focused on what clients want, we will grow alongside the city. Based on the firm’s trajectory and our plans, I believe Bering Street Advisors will be roughly five times its current size in 10 years.