When Mentors Become
Business Partners

Any (good) RIA business owner will have a mentor(s) to lead them. Business is a contact sport, and taking a docile approach always loses. We need the tenured professionals around us as a guide when starting, or evolving, any business —it’s a missed opportunity if you choose to go at it alone. Not everyone can or should be Rocky.

For Manish Khatta, that person is Eric Clarke, the CEO of Orion.

The conjunction of Potomac and Orion

Their relationship formed more than a decade ago, as Khatta was among the first to integrate Orion’s technology—it emerged as one of the few places to buy a tech stack that didn’t involve Khatta selling his house or firstborn.

Let’s get one thing straight: anyone can build a tech company, but Khatta knew there was something different—unique—about Orion. They were born from an RIA firm that built the technology because they needed it themselves; this was a company that knew the intricate details of building a successful RIA.

And every successful business has a humble start.

When Clarke finished grad school, he went to work for his father, who was running a successful RIA but one with mounting challenge. They struggled with operations as they tried to scale their business.

It was the late 90s—the internet was only beginning to emerge and soon would burst—and there were limited choices for RIA tech stacks. Clarke scoured through off-the-shelf solutions, but all of them struggled to be viable options for the business.

So as Khatta likes to say, “when you can’t buy, build it.” And that’s what Clarke did. (A rule of thumb for any situation is if you’re in need of a vital way to achieve growth, someone else is looking for that too.)

Orion was rolled out from the RIA as a separate entity and officially formed in late December of 1999. He spent the next several years building out the technology and offered it through the web.

Many of us live and breathe on the internet today—have you checked your screen time hours lately? However, in the early 2000s, outsourcing the reconciliation and making that information available online for advisors was an outlandish idea and a daunting proposition—it wasn’t widely accepted.

Potomac was one of the first companies to take a chance on them.

Becoming the most-in-one

To be an entrepreneur requires trial and error; there is no way to get it right on the first try—I mean, Jeff Bezos almost went bankrupt ten years into Amazon.

At first, Orion set out to be an all-in-one. But they quickly realized the demands on the development required them to focus. This led to a shift, a focus on being the best of breed portfolio accounting. They used their resources on what they thought could differentiate their value proposition in the marketplace and meet the demands and needs of their advisors.

When growing a business, you take various ideas and retrieve feedback from the marketplace—utilizing it to pivot and switch courses to what worked well.

Orion took feedback and stayed true to the portfolio accounting space for several years, including using the technologies like APIs, batch file transfer, and in some cases, a single sign-on into their system—they embraced all the things that the industry was promoting.

However, integrations aren’t always that easy, and it’s one of the most frustrating aspects for advisors to deal with.

Advisors wanted a CRM, portfolio, accounting, financial planning, and proposal system to all be working together. Orion heard that and acted; armed with the success of the past twenty years, they have slowly acquired the best of the breed technologies across these different areas and are molding them into one.

The RIA business has evolved and continues to grow. Throwing capital and resources behind solving the number one concern advisors have—integration—and building a most-in-one was what advisors were seeking.

For many, “most-in-one” is a new and perhaps head-scratching term. But to Orion, it strikes at the core of knowing who they are. A technology company can’t serve 100% of everyone’s needs—it’s impossible. Because of this, Orion continues to allow advisors to own their data and use it as they need. Enabling their clients to build custom solutions on top of the Orion platform.

Now a TAMP

Orion had long admired FTJ Fund Choice, another business with whom they’d had a long and successful partnership.

As Orion started to receive more and more RFPs and large enterprise-level firms were asking for Orion to respond to a series of technological needs that included an embedded manager lineup, Orion saw an opportunity to evolve—not just their business but the industry.

Orion knew the only way to respond to those enterprise opportunities adequately was to have a manager line up and model marketplace tightly integrated into their technology.

With that, they acquired FTJ and built Orion Portfolio Solutions.

Model marketplaces have proliferated across a wide variety of platforms, and to answer the needs of others, it starts with knowing the ins and outs of a business—this led OPS to become one of the largest TAMPS in the industry.

And we know firsthand that more offerings allow others to scale their business.

Potomac on OPS

Khatta knows that a business with a limited vision never can recognize its full potential—Clarke knows that too.

In 2005, Potomac and Orion took a chance on each other. What has resulted is a multi-decade partnership enabling and pushing forward to a prosperous business.

This has culminated in the launch of Potomac strategies on OPS, a curated list of managers built from the same OCIO approach Potomac takes with its own TAMP.

There’s something to be said about working with your mentors—probably a list’s worth. Khatta and Clarke’s partnership has seen their businesses explode within the past decade, so we can only imagine what the next decade will bring.