Recruiting Advisors: First Define Your Strategy

Wealth management firms seeking to grow by recruiting new advisors need to first develop a clear business strategy.

That was the message industry consultant John Furey, principal of Advisor Growth Strategies, pounded home to advisors at Schwab Advisor Services' annual Impact conference on Monday.

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Pershing, Dynasty, and Envestnet Gang-tackle Credit Suisse

Breaking away from Credit Suisse has been on the minds of Hal Lambert and Jeff Wildin for several years but they had never been able to identify the landing spot that seemed suitable.

But after a year of careful study and preparation the two advisors — after having departed JPMorgan several years before — the two left the prestigious investment company on Oct. 18 to form PointBridge Capital in Dallas and Fort Worth, which advises $1 billion of assets for entrepreneurs, family offices, foundations and pensions.

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Is the Era of the Monolithic RIA Custodian Coming to an End?

What a difference a few years make.When RIABiz began publication in 2009, the RIA business was still in its waning epoch of being a somewhat bizarrely bifurcated business.

First there were the 28,000 firm state- or SEC-registered mom-and-pops who made up the then $2 trillion — now $3 trillion — of retail assets managed in this format for mostly high-net-worth investors.

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The High Cost of Making the Wrong Hire

A dramatic story from Beacon Pointe Advisors president Matt Cooper highlights a common mistake advisors make when recruiting for their firms.

The cautionary tale appears in a recentwhite paper co-published with the Alliance for Registered Investment Advisors. Fortunately, the story has a happy ending — and holds lessons for other growing financial-advice businesses.

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Ex-KKR Capitalists Reach the RIA Gate with $30-Million Stake in United Capital

Reversing itself on raising capital from external sources, United Capital Financial Advisers LLCwrapped up an 18-month search for about $6 million of capital by bringing aboard $38 million of capital.

The Newport Beach, Calif.-based roll-up-morphing-to-wealth-manager sold a 14% stake to Greenwich, Conn.- and Palo Alto, Calif.-based SageView Capital LP — a group founded by ex-KKR higher-ups — for $30 million and raised an additional $8 million from Bessemer Venture Partners and Grail Partners LLC.

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aRIA Releases First Two Case Studies on Member Advisory Firms

The Alliance for Registered Investment Advisors (aRIA), a think-tank comprised of six elite RIA firms that collectively manage more than $20 billion in client assets, today released the first two case studies of a six part series on their member RIA firms.

Entitled "How to Grow Bionically vs. Organically With an M&A Strategy" and "How to Identify & Invest in High-Upside Individuals," these first two case studies detail the experiences and strategies of aRIA member firms Savant Capital Management and Beacon Pointe Advisors, managing $3.3 billion and $5.6 billion in assets respectively.

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Small Advisors: Regional RIAs Want You

Are small advisors a big enough market for regional RIAs offering support services?

Phoenix-based SureVest Wealth Management thinks so, and is launching a platform offering investment, compliance, marketing, technology and client relationship support to advisors who have between $15 million and $50 million in assets under management.

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Fidelity Investments Call Two Deal-making Protagonists to its Sanctum

This month, Fidelity Institutional Wealth Services, our Boston-based RIA custody unit, held the inaugural M&A Idea Exchange as part of our expanding mergers-and-acquisitions and consulting program for advisory firms. The sole purpose of the gathering was to discuss the state of M&A and how to better support the industry’s growth through M&A.

For this event, we brought together 25 industry experts, investment bankers and active acquirers. Participants were from around the country and represented a variety of models. They were selected based on their success in sourcing, completing and integrating deals. The acquirers represented a collective $200 billion in assets under management, and each firm had completed at least one transaction in its history.

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RIA Margins Continue to Suffer

Last year was a relatively good year for the markets; the S&P 500 was up 16 percent. Yet profit margins at registered investment advisor firms continue to fall, according’s 2013 AdvisorBenchmarking RIA Trend Report, from 37 percent in 2010 to 26 percent in 2012.

Part of the reason is that expenses at the firms also rose, pretty dramatically, from a median of $100,000 in 2010 to $231,000 in 2012, with management compensation making up much of that increase. Advisors aren't reigning in their trajectory of increased costs even though the market recovery has begun to level off, and much of the increased costs, the report finds, are going to compensate managers.

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Top RIAs Identify 4 Most Critical Challenges for Advisors

A new think tank of registered investment advisors with inside knowledge of the RIA industry on Tuesday released Tuesday a white paper that flags the four major challenges ahead for independent advisors and lays out what they can do to position themselves for the future.

The white paper is written and published by the Alliance for RIAs (aRIA), a study group that combines the knowledge of six successful RIA firms that collectively manage more than $20 billion of client assets. It can be downloaded free at and is the first in a series of four, titled Creating Value and Certainty Within Your Independent Advisory Firm. The second paper will be published in mid-November, and papers three and four will be published in the first quarter of 2013.

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RIAs the Busy Beavers in M&A

Registered investment advisory firms continue to be the most active players in the mergers-and-acquisitions game, according to Pershing Advisor Solutions LLC’s latest analysis of M&A trends in the financial services industry.

RIAs’ buying other RIAs accounted for 58% of deals so far in 2013, up from 37% last year, while aggregator firms were involved in just 25% of deals during the first half, down from 32% in the second half of 2012 and 28.9% for all of last year, according to the report.

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Secrets of 3 Exclusive Study Groups for Advisors

At a recent meeting of Steve Lockshin’s study group, one of the members had a problem. The executive was trying to structure a transaction for an upcoming deal, but kept hitting roadblocks over price and terms as negotiations dragged on.

He presented the issue to the study group — the Young Presidents Organization Financial Forum — and got quick feedback. “In about an hour, we were able to review the deal with him and give him ideas we had from different points of view,” says Lockshin, chairman of Los Angeles and Potomac, Md.-based Convergent Wealth Advisors. “As a result, he was able to approach the transaction differently — and he estimates that the input he got saved him about $10 million.”

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A Good Succession Plan's Main Ingredient: Growth

For a financial planning practice, a healthy lifecycle includes at least two growth spurts, say advisors in the know. The first one, ideally, takes place right after the firm launches. The second should happen when the founders are ready to cash out and leave their practice in new hands.

Client and revenue growth are “absolutely necessary if a succession plan is going to work,” says Marjorie Fox, founder of Reston, Va.-based Fox, Joss & Yankee, which has $400 million in assets under management. Fox left E.F. Hutton decades ago to start her own business and remembers slogging along as rainmaker in chief to build her roster. “We did it the old-fashioned way: one client at a time,” Fox recalls.

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Raymond James Snags Four Industry Bigs in RIA Push

Raymond James is ramping up its small RIA custody unit. The firm plans a media campaign beginning in September to get the word out about its custody service as well as options for hybrid advisers.

In addition, the firm announced today the hiring of four new regional directors for its custody business, known as the Investment Advisors Division, who've been tasked with building up the small custody operation that has struggled to gain traction since its launch 13 years ago.

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San Francisco Platform Provider Lands Morgan Stanley Breakaways

Sanctuary Wealth Services, a San Francisco-based platform provider and services support firm for wealth managers, has snagged a Morgan Stanley breakaway team specializing in proprietary asset management.

Five former Morgan Stanley advisors, led by founder Don Garman, last week formed Mirador Capital Partners in Pleasanton, Calif., with around $200 million in assets under management. Garman launched the firm’s flagship fund, Garman Global Growth & Income portfolio, in 1980. Sanctuary will support Mirador with strategic business, operational, compliance and marketing support.

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Making Sense of Steve Dunlap Stepping into Barnaby Grist's 'Big Shoes'

Cetera Financial Group Inc. has replaced Barnaby Grist with somebody who knows him, likes him, knew him from the days of Grist was at Schwab Advisor Services and 'humbly’ hopes to step into his shoes.

The Los Angeles-based aggregator of independent broker-dealers, announced yesterday that Steve Dunlap will join the company as executive vice president of wealth management. The former Lockwood executive will be charged with the delicate task of keeping Cetera’s advisors on track as IBD reps while pushing the envelope toward a more fee-based, RIA-based future.

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How Money Gets Downplayed in RIA Deal Making

There is one thing that buyers and sellers of RIAs, independents, and wirehouse advisors can agree on: Many of the good ones are taken.

In other words, buyers don’t think sellers “get real” and vice versa. If the RIA M&A market weren’t so tragically congested, you might think this finger-pointing was funny, but getting past the humor, what are these would-be deal-makers really trying to say? See: Schwab 2013 RIA M&A data show hope but also futility.

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Are Independent Advisors Built for Accelerated Growth?

The Alliance for RIAs (aRIA) today released the fourth of a four-part whitepaper series for advisors called Creating Value and Certainty Within Your Independent Advisory Firm.

The series of papers is based on the combined experience and observations of the six aRIA members, all RIAs who collectively manage over $20 billion of client assets. Each aRIA advisor has demonstrated a track record of extreme asset and revenue growth and is providing leadership on how advisors can run a better business.

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Crossing Paths: The 2013 IA 25

Go to any conference where registered investment advisors meet, and it’s clear from the buzz in the room that RIAs like to talk. Only rarely, though, does the subject come up of how much their company is worth.

To break the silence around real enterprise value, a group of six successful RIAs got together last year and committed to sharing their experiences to help the industry build independent firms that are truly sustainable. 

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