05.16.18

Candid Conversations with Mike Miroballi: Part 3

by: David Macchia

This is part three of our Candid Conversations interview series with Mike Miroballi of The Huntington Investment Company. In case you missed them, read part one and part two. 

Part two of the conversation focused on the challenges and programs put in place because of the DOL Fiduciary Rule, retirement plans for baby boomers and smarter client segmentation. Now, the conversation covers mastering digital communications, transforming the industry and Miroballi’s back-up career plan. Read Miroballi’s insights below.

On the Shifting Communication Models

David Macchia: We’ve talked a lot about complex issues throughout our conversation. Without help, they’re difficult for customers to understand. My conclusion is that our greatest challenge is also our greatest opportunity: communications. Especially, digital communications. We have to penetrate the customer's mind using digital tools to make them understand what these issues mean and how important it is to, say, have a properly designed plan of retirement income. How do you think about the whole issue of communications in your business? What are you doing about it, especially in the context of digital communications, given that the world has gone totally digital?

Mike Miroballi: Yes, I think there's some opportunity for us to advance that. The way people receive information now has changed dramatically from where we had it 10 years ago or even five years ago. Being able to communicate in a way that allows you to deliver information that's relevant to that customer based on their interests, that's where you really need to focus your attention. And the way to get there is through these CRM tools that help ascertain where you're able to really gather information and preferences, how a customer wants to be communicated with and what their interests are so that you can get the right kind of content. And then you must have the ability to deliver that content on a consistent basis. If you position yourself for it, but you can't deliver the content, well, then you're not going to be relevant. Rather than blasting out communications that really just become white noise, it's giving content that's important to a specific group of customers who have expressed an interest or a preference in that area, and then being able to deliver that content in a consistent and timely manner.  

Macchia: I couldn't agree more. The key word among all of the things that we've talked about is content. We're in a content age. Twenty years ago, Bill Gates said, "Content is king." He was right then. He's right now. And you can see it in the example of companies that were great commoditizers of whole industries. I mean Netflix, Apple, Amazon and Facebook even. Their whole future is based upon content. They're winning Academy Awards and building their own television shows. They've realized that content is the key to maintaining the client and deepening the client relationship. We must move into this area in our industry much more effectively.  

On Transforming the Industry

Macchia: If I could hand you a magic wand, and you could wave this wand and affect any change in our industry instantaneously, what change would you make?

Miroballi: Oh, wow. That's a big question! I think if there is a way for us to have a transformed compensation structure, it helps us solve a lot of things. With DOL, there's wisdom in what they set to do. In really trying to eliminate those conflicts of compensation around advice. If we could go even further with that, it would open up the opportunity to bring even more people into the industry, especially younger people into our business who are reticent in part because of the compensation structure. To me, this would open up a lot of possibilities. It's not about compensation level, it's the system we've created where it's tied to either asset gathering or selling a particular product type. We can get away from all that and create a focus based on the best solutions for clients. Then it also allows us to really think about our pricing structure because it's kind of odd the way we serve clients, right? Besides the commission products, think about managed money. We charge based on assets and basis points. That is driven off of our investment management capabilities, but we know that more recently with robo-advisors that investment management on its own isn't necessarily worth what firms are charging — that is, what full-service firms are charging. It's all the other value-add things we do that we’re not explicitly charging for that justify the fee.

Essentially, we overcharge for investment management, but we offer everything else we do for free. It's an odd dynamic. So how do we retool this so we're charging fees that are directly related to that value? We implicitly have to do this in order to justify the fees we're charging because that's not sustainable. There's a lot of providers out there, whether you're charging 1 percent, 1 and a quarter — whatever it is, the fact remains that you can never charge a low enough amount for pure investment management. Now, you must really determine where the real value is, and it is in financial planning. It's in behavioral finance; it’s in keeping investors set to their goal even when their confidence might be shaken. It's doing the retirement income planning and foreseeing the potential issues that could disrupt a plan. It's things like that.

Macchia: I agree. I think what you're saying is that it's less techno and more human. That's where the value lies. Or a human-plus-robo environment.

On a Path Outside of Advisory

Macchia: If you had not gone into financial services, a path that ultimately led you to your current job of president of Huntington Investment Company, and you could've gone into any other job in any other area of life, what would you have loved to do?

Miroballi: Oh gosh. You know what, I'm not very artistic, but I always appreciated art. I do. I love the arts. If I could — whether it is writing stories, painting or even music, I would love to be better at those things. I'm pretty good at writing; in terms of being creative and writing creative stories that people would be interested in reading, those would be the kind of things that I get a lot of enjoyment out of.

Macchia: So, a great novelist.

Miroballi: Novelist or writing music. I've never been musically inclined. I have some family members who are musically inclined, but I've never been musically inclined. I would love to be, though. Just to be able to do something that other people enjoy, that would be a lot of fun. I'd get a lot of enjoyment out of that. Whether it's writing, whether it's writing music or performing music or something that would give that kind of diversion enjoyment to somebody.

Macchia: And if it were performing music, what instrument would it be?

Miroballi: Guitar, for sure. Not electric. It would be acoustic guitar.