Spotlight On: Adrian Cronje, CEO, Balentine
June 2024 — Adrian Cronje, CEO of Balentine, sat down with Focus: to discuss the firm’s priorities in the near term, unique features of the Atlanta entrepreneurial market, trends in wealth management as a result of interest rate hikes and the importance of prioritizing company culture.
What were the notable milestones and achievements for Balentine in the Atlanta region in the past year?
Balentine has been very focused on scaling our company around the employee and client experiences. Last year, we won Pensions & Investments’ best places to work in money management for the ninth year in a row and 10th year overall. This really speaks to our vision of being known as the employer of choice in the wealth management industry. We are always looking for people who value our culture and unique work environment. The biggest strategic asset Balentine has is our people, and our culture that stitches them together. On the client experience side, we surveyed our clients using a Net Promoter Score (NPS) technique, and they scored us as a “world-class service provider”. This is rare for a firm in a service-based industry. It has been a big driver in why our client retention rates have remained so high and why we continue to benefit from organic growth. I am proud that we were recognized as one of the fastest-growing independent wealth management firms, but we never want to lose sight of the employee and client experience. When we filed our ADV, as every independent firm must do, we reported over $7.5 billion in assets under advisement. We opened new office space in the Raleigh area where our team has expanded significantly. All this shows we are making great strides as the go-to firm for comprehensive wealth management for entrepreneurs and business owners.
What trends are emerging among the firm’s clients?
Increasingly, entrepreneurs and business owners are asking wealth managers for counsel on issues way beyond financial planning and investment management. Those are quite frankly seen as table stakes now. They are asking for a guide to help them on their journey to define and fulfill their legacy. This is so key to their families; they want to build resilience so the wealth they have created can be passed onto the next generation in a sustainable way. Our chairman, Robert Balentine, and I wrote a book called First Generation Wealth on this topic, and it has placed a lot of attention on what Balentine does. I have lived in Atlanta for a long time, and it has been interesting in recent years to watch it become known as a hotbed for entrepreneurs and business owners.
What trends are you seeing in the wealth management sector you believe will be the most substantial looking ahead?
One trend we are keeping a very sharp eye on as an independent firm is the effects of sharp interest rate increases on the wealth management industry. Until the Federal Reserve began to increase interest rates, one of the key features of the wealth management industry was private equity entering and rolling up many firms using a lot of debt to chase returns. We are already starting to see some signs of distress with interest rates at 5.5% or more, and perhaps staying at this level for a lot longer, all of which means that there is an opportunity for our firm to take advantage of that. There are really good people who love their clients and may find the Balentine culture and approach a good home as this distress unravels. Private equity entered the industry in an era of cheap money, and that strategy has now come into question. We are positioning our firm for great people to come to Balentine and continue to grow our firm thoughtfully while remaining independent and not diluting our unique culture.
It has also been interesting to see the game-changing technologies businesses are adopting, such as automation and generative artificial intelligence (AI). Though generative AI will never replace our personal relationships and counsel with our clients, it absolutely helps us be more efficient. It is allowing wealth management to be more productive in what we do.
What legislation or regulations are you monitoring that could impact your business or clients?
Compliance is always something that we are keeping a very sharp eye on. Our chief compliance officer continuously monitors regulatory trends and new rule-making by the Securities and Exchange Commission (“SEC”). Cybersecurity is a top focus of ours to ensure we are doing all that we can to maintain and safeguard our sensitive firm and client data, especially in light of the increasing threat landscape posed by professional fraudsters and the introduction of AI technology schemes. We continuously update and enhance our policies and procedures in an effort to mitigate these challenging risks our industry faces. In addition to cybersecurity, we are enhancing our vendor management oversight program, assessing the impact of the SEC proposed rulemaking regarding private funds and the recent re-engagement of the Department of Labor (“DOL”) rules regarding fiduciary advice.
What are your top priorities for Balentine in the Atlanta region over the next two to three years?
We want Balentine to remain an independent firm. Our vision is threefold: we want to become known as the go-to wealth management firm for entrepreneurs and business owners, be known as the employer of choice in our industry, and be known as a preeminent institutional investment manager for certain select institutions.
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