So, you’re kind of looking at the true business. So, it’s quite sustainable and will only look better as the markets recover. There’s another important point here, which I talked about in several calls, which is that we would be making investments in personnel and the strategy, intellectual capital to grow the company. We’ve done that. It was hidden a bit in our EBITDA margins because we were growing. So, we were growing faster than we were even making those investments. Well, with the decline in markets, they’ve become a little more obvious. They’re paying off, but that sort of investment takes a long time to payoff in a business like ours, especially on the high net worth side. We were also recognizing high performers and different strategies with increased compensation due to performance.
A good example would be the growth team in Milwaukee, I just mentioned. That’s going to hit your EBITDA margin a little bit. It’s money we’re very happy to pay. So, I view this as a very sustainable level. I view it as a good level. It’s in line with history. It’s very good compared to the competitors. And if we get performance fees or you see growth from some of those investments I see increases from there. Anything to add to that, Scott?
Scott Gerard: Yeah. The only thing I’ll add is the fourth quarter trend that you typically see with us is that we true up our compensation pools at the end of the year and a lot of it is based on full year results. So that’s why you saw — you may see atypical margin levels, EBITDA margin levels in the fourth quarter. A year ago, our fourth quarter adjusted EBITDA margin was 38.5%, and then it was a little bit north of 15% fourth quarter of this year. So, this all reflects what Rick said, investments in new staff that takes time to develop their business in a year where revenue levels and markets were down. So just to provide that color that it’s not unusual in the fourth quarter of each year for Silvercrest to see some movement in EBITDA related market.
Richard Hough: Yeah. I figured we’d get there as well. It’s a great point. I would just add that even on compensation, which is the bulk of the true, obviously the performance fees that can help you with the upside, which happened last fourth quarter in 2021 and hurt us in 2022, there’s the compensation adjustment. We’re accruing at approximately 55% of revenue and we went well below that because of the good year we had in 2021. 2022, we went above it. And you kind of average it out and you look at the long-term trends of this business, not even that long-term, a year trend, not quarter-over — one year, quarter-over-quarter, but if you look at calendar years. And we’re hanging right in there around 55% or just below which we’ve done historically and managed very well.
And to Scott’s point you just made on the EBITDA margin, you may have hit the fourth quarter 38% last year and more like 15% this year for the fourth quarter. When you average that, you’re right at 27%, 26.5%, which is exactly where we would expect to sit. So, I think you need to be careful about where we’re — what comparison period we’re comparing here.
Christopher Marinac: No, that’s all very helpful. I appreciate that. And then could you just continue a little bit down on the sort of the revenue side at the core from sort of the basis points you can charge. I know some of this gets influenced by mix as you continue to be successful in other parts of the business. But is there any additional pressure on fees in general compared to how you’ve managed this year-to-year?
