By Steve Garmhausen
For wealth management firms, a wait-and-see approach to artificial intelligence won't do, according to Phil Fiore. "We have to start embracing it now if we're going to be around in a substantive way five to 10 years from now," says the co-founder and CEO of Procyon, a $9.2 billion-asset wealth manager based in Shelton, Conn. Looking around corners has paid off for Fiori and his partners, all of whom came up with him through the wirehouse world before forming Procyon in 2017. By strategically building business lines and adding services, they have expanded their business significantly in less than a decade.
Speaking with Barron's Advisor, Fiori discusses the obligations that come with rapid growth, including professionalization across the business. He weighs in on the likely inclusion of alternative investments in defined-contribution plans in coming years. And he argues that the best firms will add "lifestyle-related" services that sound a lot like the ones single-family offices have been providing for years.
What's the genesis of your firm's name? Procyon is a binary star in the constellation Canis Minor. It is the second-largest navigational star in the universe. The fact that it is a binary star made a lot of sense for us, because we have a very substantive private wealth business, but we also have a nationally renowned retirement consulting practice. [A binary star is a grouping of two stars that are gravitationally bound to one another and orbit each other.] We serve small- to midsize publicly and privately owned organizations. We'll consult on their pension plans and 401(k)s, and we'll also do the healthcare and group work. And then we serve families. Our firm is built for those with $5 million to $30 million of investible assets, and our families are generally those that are self-made: either entrepreneurs or they made it on the corporate ladder. They've come into significant money, and now they want to live the rest of their lives.
Did you have this same balance of client segments earlier in your career at Merrill and UBS? Yes. I was in the wirehouses for 22 years, and we always had a private wealth business. In my Merrill days and my UBS days, we were bringing in so much money on the institutional side that we didn't focus on the private wealth offering as much as we focus on now. We did develop a few hundred million dollars almost by accident, because of what we're doing on the institutional side in the wirehouses. But now it's a real real focus of our business. We like to say that we're a family office for middle America.
Why did it make sense to go independent? I don't begrudge any of my experience in 22 years at the wirehouses. I had an amazing career there. I just don't think it was the right place for us and our clients, given the way that we thought the business was changing and how we had evolved with that change. Our clients were looking for more services, not less. They were looking for more customization with reporting, not less. And I think the wirehouses have to deliver across the masses, and they have to manage to the least common denominator sometimes. And that was just a conflict for us.
What are some of the bells and whistles you've been able to add as an independent? At the wirehouses we had financial planning and investment management, and on the institutional side we had pension and 401(k) consulting. As soon as we launched our firm, we launched a benefits vertical. The people making the 401(k) and pension decisions are by and large the same people making the healthcare plan decisions for those organizations. So we were able to go to those clients of ours and say, "Hey, we can now help you even more by doing this stuff as well." That was an immediate win.
And then we thought, OK, what are our families dealing with across the kitchen table that touches financial services? We had the wealth planning and investment management -- what else was going on? It turned out to be accounting, property and casualty insurance, trust and some M&A work on family businesses. So we built out all those verticals. We want the ball. We want to be the financial captain for our families. We want them to have a trusted partner in Procyon for all the financial services they need.
Did you fund all of those expanded services through cash flow? Yes, predominantly through cash flow. We did do an acquisition with our benefits business that brought over a book of business -- that was helpful, and we continued to build out those services. To give you a little inside baseball, we surveyed our clients about adding some offerings to our schedule. We gave them a list of offerings. Tax and insurance were highly rated, so that's why we developed those.
Do your institutional clients provide a steady referral flow for your private wealth business? We consult the board on the various investments, economics, and legislative updates, all that good stuff. But we also have a substantial educational regimen that touches the participant. We talk about bookkeeping 101, college planning, Social Security planning, retirement planning. By virtue of that, we are a trusted voice for participants when they are looking to transact. That transaction could be: I'm going to leave my job for another one. It could be: I'm retiring. We are generally the call that they make to ask what they should do. We try to give them options in a relatively unbiased way. We're not going to send them to one of our competitors, but if they want to come on the plan for various reasons, we're certainly going to make Procyon a home for them.
Can you say a little bit about your M&A strategy? How much have you done, and why? We have done 16 transactions, from full RIA buyouts to bringing in a single financial advisor or a team. We will probably do anywhere between three to five transactions a year. We are not an aggregator, we like to call ourselves an integrator. Everyone has the Procyon card, so you have to be a team player, and you have to be willing to continue to grow. We're not the place people come to retire. We're out looking for firms and FAs that have kind of plateaued. They want to grow more, but they don't know how. They join our firm and we unshackle them from some of the things they were doing, which gives them the opportunity to grow substantially.
Last year Procyon sold a minority stake to Constellation Wealth Capital. Why did you bring in a capital partner, and what will you do with that capital? We've been getting calls [from private-equity investors] since the day we launched. But we didn't want PE to control the firm, so we were very careful. We knew that we would ultimately need to institutionalize our capital so we could go after bigger deals. Last April we went out to the marketplace through our banker, Houlihan Lokey, and found a great partner in Constellation Wealth. There's been zero seller remorse. They've been incredible partners.
Can you talk about the business challenges that have come with growth? We launched with eight people: five founding partners and three staffers and a couple of billion dollars. Today, we're at 83 people, 10 offices and $9.2 billion [of assets], and all these other business verticals. It's now a complicated business. And it needs more than just partner management. It needs things like a finance department, an HR and talent department. We have a chief administrative officer. We have a chief revenue officer running our sales organization. Coming to grips with that reality and building that infrastructure was necessary for us to continue to give the services that our FAs and team demand. Because the people who had been doing that, the owners, were just spread too thin, quite frankly. We're professionalizing how the firm runs, how it acts, and all the departments within it. So there's real accountability and lines of reporting now. It's no longer just a book of business. It's a real business.
On the institutional retirement plan side of the business, it looks like the stars are aligning for private investments to be included in defined-contribution plans. How are your clients reacting? I think it's long overdue, and I'm happy that they're coming. However we are cautious as far as making sure that [alts] aren't just available for participants to allocate. Within the model portfolios where we control the allocation, we are certainly willing and able to allocate to alternatives. I am not necessarily in favor of having a pure option in the lineup for participants, because I don't think they really understand what that is. And I would be very concerned that someone makes a decision based upon a quarterly return of one of these instruments.
What are your private clients most concerned about these days? Given what the markets have done over the past many years I think the general concern is: When is the party going to be over? When are we going to experience something like a 2008? So we're assessing the risks that we're willing to take. Our job is to protect our clients' assets first and foremost, and get good returns on a risk-adjusted basis. It's not to buy Nvidia at $1 and watch it go to $300. We're always looking at how much risk we want to take in the current market cycle, and that's what we're talking with clients about all the time.
As a strategic thinker, how do you separate the signal from the noise as far as the impact that AI is going to have on the advisory industry? I think it's going to be profound. We have to start embracing it now if we're going to be around in a substantive way five to 10 years from now. That doesn't mean that AI is writing our market commentary or doing our analysis or anything like that. What it is doing is allowing us to be more efficient, which gives our FAs the ability to be that much more productive. Even from the investment perspective, allowing AI to be a piece of the puzzle in looking at the world of investments, at various return and risk measures, [allows us to narrow it down to a group] that's more concise for our analysts to dig into.
Any interesting trends from your perch as you look out over the industry? I think the business is evolving. Clients and families are demanding more. Tax and insurance and trust and those types of things now have to be part of the discussion. Even beyond that, I think it's going to be more lifestyle-related in the not-too-distant future: I have an elderly parent; how can you help me? Medicare; how can you help me? My kid wants to get into Harvard; how can you help me? I think there's going to be part of the fee construct that's going to be: What else are you helping me with? And that can drive the fee higher or lower based upon your ability to execute on the things that families are looking for.
I think there's a great need for help with navigation of the aging process -- everything from navigating benefits to the different assisted-living options. I agree with you 100%. If you think about where the population is demographically, there is a major need for that type of thinking and that input. I think the best RIAs are going to offer that for their families. The demographics suggest you are going to have to.
Thanks, Phil.
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May 01, 2026 11:58 ET (15:58 GMT)
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