About this episode…

When it comes to innovations that fundamentally altered the wealth management world, many pundits will cite the OCIO or Outsourced Chief Investment Officer model.

The concept of outsourcing investment management changed the way that investment decisions were made and implemented for institutional investors and high-net-worth families—moving the decisions from product-driven sales folks to a fiduciary-minded comprehensive investment office.

It was a game-changer for the industry, creating a more streamlined and cohesive approach for clients while driving growth for firms that adopted this methodology.

Yet the OCIO model’s impact was most transformative to the firm co-founded by a pioneer of the model, Jonathan Hirtle.

This former Marine started in the wealth management industry in the trainee program at Goldman Sachs in the early 80s. Through that experience, he was immersed in a culture unlike any other—yet he ultimately felt “philosophically cornered” in a transactional-based role at the firm.

That is, Jon was conflicted: He saw an opportunity to serve clients’ investment needs in a more comprehensive manner—in a way that he could not at Goldman.

So in 1988, Jon co-founded RIA Hirtle, Callaghan & Co. with Donald Callaghan, another Goldman Sachs vice president, to serve solely as an outsourced Chief Investment Officer and investment department to family groups and institutions that chose not to develop and pay for a full-staffed internal investment department.

And they made the leap to independence at a time when few would consider it—and when the resources to do so didn’t exist. That is, they did it from the ground up, without a blueprint or the support that is available to present-day prospective independent business owners.

Today, Hirtle Callaghan is a $20B RIA—growth solely driven by organic means and without the aid of outside capital.

In this interview with Louis Diamond, Jon talks about his journey and path to growth, including:

• Life as an advisor at Goldman in the 80s—and what motivated him to consider leaving the firm.
• The choice to launch an RIA at a time when few made the leap—and what it was like without the support and resources that breakaways have access to today.
• The now popular Outsourced Chief Investment Officer (OCIO) model—and how it changed the way institutions and large families handled their investments before its inception.
• The OCIO model today—and how it evolved over time.
• Hirtle Callaghan’s growth over the years—and how their focus on organic growth fostered such incredible success.
• The jump from $1B in AUM to $5B and now over $20B—and what challenges they encountered at each breakpoint.
• Remaining 100% independent—and why they have chosen not to take on any outside capital.

Jon paints an amazing picture of how innovation drove change not just for Hirtle Callaghan’s clients but for the wealth management industry at large. From recognizing the limitations in the brokerage environment, to making an early leap to independence, and on to the value of delivering a comprehensive investment model, Jon paved a new path that now serves as the backbone of the institutional consulting space as it stands today while sparking a flow of independent firms as a result.

Jon is a true legend with extensive experience that he explains in practical terms—making this a “can’t miss” episode for employee advisors and business owners alike.