Don’t Do That: Don’t Misinterpret Fiduciary Duty with Matt Sonnen, Coldstream Wealth Management and COO Society
Summary:
What’s the one operational mistake that can quietly erode margins and stall growth? For Matt Sonnen, COO of Coldstream Wealth Management and creator of The COO Society, it’s misinterpreting fiduciary duty, a trap that leads RIAs to overserve clients at the expense of profitability.
In this episode, host Kelly Waltrich sits down with Matt to unpack lessons from his career as a COO and consultant to advisory firms. They dive into the realities of running a scalable, profitable RIA, from client segmentation and cost-to-serve to building processes before buying technology to managing change through mergers and acquisitions.
Drawing on years of experience helping firms standardize operations, Matt shares why profitability should matter just as much as growth, how COOs can earn buy-in from advisors, and why the emotional side of M&A often gets overlooked. Most importantly, he reframes fiduciary duty for modern firms: putting clients first doesn’t mean giving away every premium service to every client. It means eliminating conflicts, being transparent, and protecting the long-term health of both the client and the firm.
This conversation is filled with practical insights for leaders who want to scale without losing control of their operations, profitability, or culture.
Kelly and Matt cover:
00:00 – The COO’s role in driving communication and alignment
02:15 – Why profitability matters more than revenue growth
05:32 – Fidelity’s $9,222 “cost to serve” benchmark and what it means for segmentation
08:47 – How overserving small accounts can erode margins and capacity
12:05 – Why process must come before technology investments
15:42 – Common operational gaps exposed in M&A integrations
19:30 – Standardizing systems vs. flexibility in planning tools
22:18 – Managing the emotional side of selling a firm
25:54 – Building guardrails around advisor pricing and discounting
28:36 – Reframing fiduciary duty: eliminating conflicts, not overserving
30:12 – Matt’s “Don’t Do That”: Don’t misinterpret your fiduciary responsibility
32:40 – Final advice on scaling profitably without sacrificing client experience
Connect with Kelly Waltrich:
Connect with Matt Sonnen:
About Our Guest:
Matt Sonnen has over 25 years of experience in the financial services industry. As Chief Operating Officer, Matt manages all aspects of Coldstream’s operational platforms to identify opportunities to scale and systematize processes ensuring capacity for the firm’s continued growth. In addition, Matt will also oversee the firm’s Information Technology, Performance Reporting, Client Service, and CRM efforts.
Before joining Coldstream, Matt was the Founder and CEO of PFI Advisors – a firm dedicated to consulting registered investment advisor (RIA) owners on best infrastructure and culture practices. Matt has been a thought-leader in our industry – publishing over 270 practice management articles, research papers, and podcasts. In June 2021, he launched The COO Society to create a community of RIAs centered around coaching operations professionals.
Matt learned the ins and outs of the wirehouse model at Merrill Lynch in the late 1990s. Matt left Merrill in 2005, and a few years later he was introduced to the RIA marketplace, helping build the infrastructure for Luminous Capital prior to its founding in 2008. As COO and CCO at Luminous, he navigated technology and compliance challenges as the firm grew from $1.7 billion in assets to nearly $6 billion in less than five years. Luminous Capital sold to First Republic Bank for more than $100 million in 2012, after which Matt headed to Focus Financial Partners in New York City where he helped partner firms streamline operations and improve back-office efficiencies.
Matt graduated from the University of California Los Angeles with a Bachelor of Arts in Economics. He currently resides in California with his wife, Reese (Larissa), and son, Luke.