Seven years ago, I interviewed Mike about his evolution as a business and community leader here in the Lehigh Valley for an article I was writing. We did the interview at his home which happens to have a beautiful wine cellar. Mike generously opened a nice bottle of red, and as we conversed, I began to discover why Mike was one of the most influential people in the Lehigh Valley. Fast forward seven years, I thought it would be interesting to see what Mike has accomplished and what he’s thinking about for the future. Let me start off by saying Mike is a true visionary when it comes to making a plan and then executing it. In May of this year, Mike relocated his practice to Allentown’s latest City Center building called Tower 6 overlooking Center Square and the PPL Center.
Walking off the elevator of the 9th floor I was immediately greeted by a beautiful glass entryway opening to the CAPTRUST reception desk where I was greeted with a friendly smile by Amy Molewski, Mike’s oldest daughter, and recent CAPTRUST hire, returning to the Lehigh Valley after 13 years in New York City. His brand-new office space with floor to ceiling windows with panoramic views of the Valley was a very fitting place to sit back down with Mike and get caught up on how his leadership has progressed and moved him and those around him forward. The only thing missing was the red wine, so I succumbed to another cup of coffee.
I had my notes from my previous article in front of me, and there were so many topics to pick back up on, so I started with CAPTRUST. Mike explained that the financial services industry had changed dramatically in his 30-year career. At age 23 he started his own practice, then created MFP Strategies in 2000, a firm he and his partners grew to $5 billion of assets under advisement, and then merged with CAPTRUST in 2016. Since MFP was clearly successful, I asked what made him decide to act on the merger? As Mike explained, it became clear to me that CAPTRUST provided Mike, his team, and their clients a better platform for growth. Mike thinks, eats and breathes growth. “Business leaders must create a plan for growth, without growth there are limited opportunities for our clients and teammates,” says Mike. To attain bigger and better, Mike led his team to join CAPTRUST. Now Mike and his partners Jim Edwards, Wes Schantz and Chris Butz, are Principals in the #1 Independent Registered Investment Advisor in the nation with over $270 billion in assets under advisement (as of March 31, 2018). Quite an astounding accomplishment, so I wanted to dig further to understand what drove the merger and what’s next.
Mike shared with me that it wasn’t just being a large firm that was the main motivator, but more importantly, alignment for strategic growth. He went on to explain to me that the opportunity with CAPTRUST had many significant benefits. CAPTRUST is employee-owned with no outside ownership to drive decisions that conflict with the firm’s mission and core values. In fact, their mission statement boils down to “enriching the lives of others.” This encompasses clients, employees and the communities they serve. To live out their mission statement, CAPTRUST has created an employee shareholder program where over half the 433 employees have ownership in the company. “Financial advisors and other team members who become shareholders” Mike expressed, “feel more appreciated when they have long-term incentives tied to their efforts.”
Another benefit associated with the merger was the strong institutional business focus CAPTRUST had, which reinforced MFP’s institutional consulting business. CAPTRUST had the infrastructure in place with its size and scalability to provide support from its headquarters in Raleigh, NC that allow unhindered growth while simultaneously increasing their client-focused client-facing experience. This strategic model allows CAPTRUST to serve over 5,000 institutional and private clients and 2.5 million participants in retirement plans. “CAPTRUST has made sizable investments in people and technology to not only be a dominant player with institutional clients but also private wealth clients across all income and net worth levels. As a firm we have clients in all 50 states and financial advisors in 36 locations across the country”, added Mike.
Entering into a merger is a daunting task, so I asked Mike how he lead his firm through such a risky proposition. “As MFP considered the merger, both sides could have walked away at any time. Instead, we started to think about where we could take this, and we did a lot of reverse due diligence,” Mike revealed. They spent a lot of time with the CAPTRUST partners and management team. Like any personal relationship, the more time spent together, the better you get to know the other person, or in this case, the entire leadership team. I asked him what flushed out of the due diligence process that cleared the way forward. Interestingly it came down to values and client advocacy. Mike said, “We really liked the people and their culture. They have solid values, and as we spent time with them, we got to see their good intentions and their actions. CAPTRUST had a strong focus on their people, to help them succeed personally in their careers and aspirations. And we loved their decision-making mantra—”just do the right thing.” Mike was also personally motivated because this created an opportunity for him and his team to work with some of the top financial advisors in the US and CAPTRUST’s most successful clients across the county. “I lead a team within CAPTRUST called the Strategic Advisor Group that is responsible for working nationally with many industry leading companies, their owners and executive teams, as well as families with substantial wealth, family offices, high net worth individuals and endowments and foundations, it’s an awesome opportunity” Mike noted.
Going from among the Top 50 Registered Investment Advisory firms in the United States (Registered REP Magazine, May 2013) to the #1 Registered Investment Advisory Firm in the United States (Financial Advisor Magazine, July 2017, based upon assets under advisement) is extremely impressive, so I inquired about what’s next. Mike shared that CAPTRUST has a 10-year plan that is committed to growing the company by 4x. They want to attain $1 trillion in assets with half of their growth planned through mergers and acquisitions and the other half through organic growth. In 2017, CAPTRUST completed seven mergers and acquisitions, and they are targeting four in 2018. “We expanded our Allentown offices and have the entire 9th floor here in Tower 6, and we are actively seeking M&A opportunities here in the Lehigh Valley,” he explained. Mike continued, “The key driver for us is attracting financial advisors who have the similar clients, a great cultural fit, and exceptional talent.”
CAPTRUST was the first signed tenant in Tower 6, showing its commitment to being part of the renaissance of Allentown. There is a strong employee trend desiring an urban setting, especially for millennials. The restaurant life and PPL Center in Allentown is very robust and attractive for employees and clients. “We received a very positive response from employees when the news was shared about our intention to move to center city Allentown, and those with some reservations were won over very quickly,” says Mike. Mike smiled and expressed, “it feels good to be part of a growing business community. Moving here accentuates our community involvement and being a part of Allentown’s rebirth. There is a lot of energy in the city, and I believe the best is yet to come for Allentown.”
In our last meeting, we spent some time discussing Mike’s philanthropic works, so I was eager to get an update on this part of his world where he leverages his leadership talent and impressive business and social network. Mike is the Foundation Chairman of Northampton Area Community College and the Co-Chair and Founder of the Lehigh Valley Food and Wine Festival which over its nine-year history has raised $2 million in scholarship awards for Northampton students. Mike has also been very involved in the United Way of the Greater Lehigh Valley, having served as Co-Chair of the Tocqueville Society for over eight years. He has been a Board Member at King’s College for 15 years, his alma mater, and a role that is close to his hear. King’s still has a large population of students who are first-generation college students, just like Mike.
I asked Mike about business trends within the financial services industry and how his firm was addressing them. He informed me that they are witnessing strong interest from clients to move to larger firms who have specialized capabilities and cites cybersecurity safeguards as a current hot topic. To meet this growing trend, they have implemented improvements in people and technology that help their clients, specifically in the area of wealth management, which gives clients better online access to their information, including portfolio performance and risk measures, strategic wealth planning, and full integration with insurance and estate planning. “Smaller firms just don’t have the resources that clients now expect and demand,” Mike added.
As we were wrapping up, I asked him about his daughter Amy returning from New York City to join the firm. He was very excited about having one of his children working in the business, and never thought it would happen. What I didn’t know was that Amy isn’t the first family member in the business. Jim Edwards is Mike’s younger brother, hired by Mike 18 years ago, and is a Principal at CAPTRUST working in the Allentown office. We are witnessing a great family team making an impact here in the Valley and across the nation.