When Scott Roulston assumed the reins of Roulston & Co. in 1990 at the age of 33, his challenge was to transform the brokerage firm his father founded in 1963 into a comprehensive investment and wealth management firm.
Roulston recognized the firm’s traditional value-investment approach was falling from favor with investors and that a bold, new strategy based on diversification was essential for its survival.
Getting buy-in from his clients, staff and other managers wasn’t easy, and the transition cost him assets and people. But the firm emerged stronger. By 1999, it had 45 people managing $640 million in assets.
Roulston, who has never shied away from making hard choices, wasn’t finished. He and his management team analyzed the firm’s processes and reduced operating expenses by $1.7 million the following year.
Last year, the company initiated and completed a merger with Cleveland-based The Hickory Group to form Fairport Asset Management LLC. It was, as Roulston says, “a merger of equals,” with the best practices of each firm combining into one entity. That made the move that much more difficult.
“Without question, the greatest challenge in this was building the chemistry, keeping all of our key people engaged and focused on the new company rather than on what they were giving up, because everybody was giving up something,” he says. “It took a while for people to understand that and accept that the new company was a new company. Not only was this a merger of equals, but when we said best practices, we meant we would take the best of each organization.”
There was also the question of people.
“All the issues with compensation, noncompete agreements, stock ownerships, job responsibilities and reporting lines had to be worked out in advance for everyone to buy in and be enthusiastic about the transition,” says Roulston, Fairport’s senior managing director and CEO. “This is a people business — clients look to their relationship manager and want to make sure they’re happy … so everybody had to be happy.”
Today, Fairport Asset Management manages in excess of $700 million and advises on an additional $500 million. It has 33 people, including a four-member wealth management staff, and a family of mutual funds and three private equity funds. How to reach: Fairport Asset Management, (216) 431-3840