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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Focus Financial Goes After $100-Million Wirehouse Brokers

In a major shift, Focus Financial is preparing a new small-ball strategy aimed at wirehouse advisors whose assets range from $100 million to $200 million that includes adding .

Rather than just going after the giant superstar advisors, the aggregator of RIAs is looking to go down-market, grabbing profitable advisors to tuck in to existing Focus Financial Partners LLC RIAs. The difference from other roll-ups with professed tuck-in strategies is that Focus makes the firms go through a sort of RIA residency during which time they remain in a limbo-like state before being placed into a permanent foster home.

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This RIA Recruited the Morgan Stanley Manager Who Almost Recruited Him

In 2011, Leo Kelly was a top-producing Merrill Lynch broker with a wrenching decision to make.

Seeking a collegiality that he no longer experienced at Merrill Lynch, he was looking to make a move. On the one hand, he had thoroughly vetted HighTower Advisors LLC and decided that that was probably the best place for he and his partner, Brian Grumbach, to move their $700-million book of business.

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What is Your Advisory Practice Really Worth?

Recently an advisor was interested in selling his practice that he had built over the past several years. He was 69 years of age and wanted to be completely done working in the business within a year of closing the deal with his “ideal” buyer. The practice was a 100 percent fee-only business on about $125 million in assets, an attractive attribute.

The practice was generating approximately $1 million in gross revenues and the advisor/owner was taking home about $550,000 each year in income. This certainly seems like a well-run business and a desirable acquisition candidate on the surface. When asked what he thought the practice was worth, the advisor responded, “about $2.2 million.”

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What is Your Firm Really Worth?

Advisors who want to optimize the value of their firm may be in luck.

In the third of a four-part whitepaper series on advisor firm valuation, the Alliance for RIAs (aRIA) outlines how advisors can create a path to grow the value of their business, dependent on liquidity of cash flow and risks within a firm’s business and revenue model. 

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Third aRIA Whitepaper Delivers Independent Financial Advisor Valuation Manual

The Alliance for RIAs (aRIA) today released the third 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.

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How Much is that Advisory Firm in the Window?

Advisory firm owners have unrealistic expectations about what their firms are worth.

Sales of RIA firms usually are done based on a multiple of cash flow, but owners and founders often overestimate their free cash by forgetting to factor in the cost of their replacement, according to a white paper released today by the Alliance for RIAs.

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HighTower Passes up $40 million Capital Raise

After taking a pass on a big new round of financing following one of the biggest deal-making tears in RIA history, HighTower Advisors LLC declared a mini-moratorium on purchases for the latter months of the year — and carried it out.

It’s a relatively radical action taken by a company accustomed to announcing big deals every few weeks.

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How RIAs are Becoming as Complacent as Wirehouses

Independent advisors have experienced a great run but they may be running out of time to make the changes needed to be part of tomorrow’s success story.

Since Cerulli Associates started publishing the growth metrics for the space in 2004, RIAs and IBDs have grown at a significantly faster pace relative to the rest of the industry. Perhaps this explains why many independent advisors now act like their wirehouse counterparts — complacent, entitled, and satisfied with their position in the financial advisory world.

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Advisors Rocked by Winds of Change in the Windy City

Financial advisors visiting the Windy City found themselves buffeted by the winds of change swirling around the financial markets and the advisory industry itself during the SchwabIMPACT 2012 conference in Chicago this week.

A frenetic stock market and a nail-biting countdown to the impending “fiscal cliff” that was fraught with high political drama served as the backdrop to the popular conference. The advisors’ world was hardly more tranquil. Many were taking calls from nervous clients worried about the fiscal cliff, while at the same time trying to make sense of the rapid evolution of their industry.

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Time to Get your Game on, Small Advisory Firms

Small advisory firms will face increasing competition for clients from larger RIA firms that have more resources and more-robust service offerings, according to owners of several large firms who are looking to expand.

The advisers, part of a panel today at Charles Schwab & Co. Inc.'s Impact 2012 conference in Chicago, warned smaller firms that their so-called “lifestyle” practices, which typically have little or no enterprise value, face a future of diminishing profit margins unless they take steps to build economies of scale into their businesses.

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Planners Who Don't Plan for Succession Face Unhappy Endings

Just as the cobbler's children go without shoes, two-thirds of independent advisors ignore succession planning. Such advisors could fall into an “annuity trap,” watching the value of their business degrade as they near the exit from their practice.

Avoiding such a trap requires time and effort: “A succession plan that maximizes sale value, could take more than 10 years, from beginning to end,” John Furey, principal of Advisor Growth Strategies, a consulting firm in Phoenix, told Financial Planning.

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Advisors Don't run Your Business like an ATM

A large majority of independent advisory firms will see their business value stagnate  just as they near the point they want to exit the business, says the Alliance for RIAs(aRIA), a confederation of six RIA firms that brands itself an advisor think tank and offers business growth consulting.

In a just released whitepaper, the second in a series of four on creating value in an independent advisory practice, aRIA warns that most advisors fall into the “annuity trap” of treating their business primarily as a source of current income rather than building “real enterprise value.”

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aRIA Releases Second Whitepaper for Advisors

The Alliance for RIAs (aRIA) today released the second 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 aRIA members who collectively manage over $20 billion of client assets.

aRIA (ah-ree-uh) group members include Brent Brodeski, CEO of Savant Capital; John Burns, Principal at Exencial Wealth Management; Ron Carson, CEO of Carson Wealth Management Group; Jeff Concepcion, CEO of Stratos Wealth Planning; Matt Cooper, President of Beacon Pointe Wealth Advisors; and Neal Simon, CEO of Highline Wealth Management. Each has proven his ability to build and grow highly successful advisory firms by industry standards.

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A $5.5 Billian LA-Based RIA is Getting Purchased by First Republic Bank

First Republic Bank will acquire Los Angeles-based wealth management firm Luminous Capital for an undisclosed cash price. The San Francisco-based bank is buying Luminous, with $5.5 billion in assets under management, to make it part of First Republic Investment Management Inc., a wholly owned subsidiary of the bank. Luminous Capital Holdings LLC is an independent wealth advisor.

First Republic expands its Private Wealth Management assets under management to $29 billion. David DeVoe, CEO of DeVoe & Company, believes the deal may have contained some irresistible aspects for the Luminous partners.

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$1.2 Billion RIA Breaks It Off with LPL

After 17 years, Waldron Wealth Management LLC is leaving LPL and moving its assets to Pershing and Fidelity in the belief that the change will enable the $1.2 billion-firm to better serve its ultrahigh-net-worth clients.

Leaders of the Bridgeville, Pa.-based firm say they were happy at LPL Financial but were seeking more sophisticated processes to meet the needs of its high-end business. Of 140 clients, about 25 are multi-family office clients whose assets are typically around $20 million. According to Barron’s 2012 ranking, Waldron’s typical client has $7.5 million in assets and a net worth of $15 million. Both Pershing Advisor Solutions LLC and Fidelity Institutional Wealth Services offer family-office services, a feature that LPL currently lacks.

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John Furey is Creating a Think-Tank out of six big RIAs

A group of six RIAs with a combined $18 billion in assets — including Ron Carson — has formed a study group, dubbed aRIA (The Alliance for RIAs), to investigate inorganic growth. 

The group was conceived, and is managed, by John Furey, principal of Advisor Growth Strategies LLC. These firms will meet on a regular basis, sharing ideas and suggestions as well as their own war stories about bringing other advisors to their firms. But the idea is not to rely on firms that have their business model based on making acquisitions.

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