The Diamond Podcast for Financial Advisors

The Independent Advisor’s Legacy: Planning for the End Game

Every independent business owner will reach a point where gaining scale and solving for continuity and succession become paramount. It’s then that they begin to wonder: What does my firm’s end game look like? Perspective breakaways and independent business owners alike often ask us about the long-term, bigger picture potential for their firm. How do I solve for succession and continuity? Why would someone sell? Who are the buyers? And is there a market for an RIA like I’m considering launching? In this episode, Mindy speaks with Nathan Bachrach of Cincinnati-based Simply Money Advisors. Last year, Nathan’s $700mm firm merged with Hanson McClain, a California RIA, to form a $3.3B enterprise. So Nathan is well-positioned to discuss the answers so many independent business owners ponder: * What could a merger solve for? * What is the introduction and courting process like? * Why use a private equity firm? * How do clients react to the news? * Does the client experience change after a merger? For advisors looking for their next step, Nathan says it best: “Run your business every day as if you’re selling it tomorrow.” By being laser-focused on his firm’s profitability and economics, he built a legacy for himself, his family, his clients and his staff—one that will continue to provide for years to come.   Related Resources Strategically Exploring M&A in the Independent Landscape Even though most firms in the market consider themselves “acquirers”, not all connections are poised to create a perfect marriage. Read-> Why Merge? The 5 real benefits of a merger. Read-> Want Your Sale, Acquisition or Merger to Close? Reasonableness is the Key The key to any transaction occurring is the motivation and reasonableness of all parties. Read-> How to Turn Your Practice into a Business Three options for principals who want to create enterprise value. Read->   About Nathan Bachrach:  Through his leadership of Simply Money Advisors and its over 20-year history, Nathan believes in "paying it forward" as a financial educator and advocate.  He started his financial services career believing that getting involved will help improve the quality of the community.  He continues to hold those same beliefs continue today. Nathan holds a bachelor’s degree from Hofstra University on Long Island, NY and earned his master’s degree from the University of Cincinnati. In 2012, Nathan was named Volunteer Team Finalist for the Invest in Others Community Leadership Awards and was honored as a Cincinnati Gentleman of Style and Substance in 2010.  He has served as keynote speaker and presenter at numerous financial industry and community events throughout the country, including Barron’s Top Independent Advisors Summits and local TE...

What It Really Takes to Build an RIA Firm – with Matt Sonnen of PFI Advisors

It’s no small task to build an RIA firm from scratch. And while there are some breakaway advisors willing to go it alone, others aren’t even aware of where to start. In this episode, Mindy is joined by Matt Sonnen of PFI Advisors, who helped build the infrastructure for the breakaway launch of Luminous Capital, and today has a career helping lead billion-dollar teams to independence. Because Matt has been on both sides of a breakaway, he can paint a realistic picture of what it REALLY takes to build an RIA firm—whether you go it alone, work with a service provider or hire a consultant. He answers those questions we’re most frequently asked, including: * What does it take to build an independent business? * What are the differences between a serial acquirer, a service platform and a consultant? * How do you access alternatives, research and lending as an independent? * How do you create a performance report as an independent? * How do you trade as an independent? * How long does it take to launch? * What about marketing and branding? * How do you handle compliance? They also discuss what to expect from life after the launch and address a common concern about the bottom line. That is, how long does it typically take for a breakaway to become cash-flow positive?   Related Resources The Real Beneficiaries of Independence: Your Clients For entrepreneurial advisors, the independent space offers benefits to advisors and clients alike. Read-> Are You a Breakaway DIYer or Delegator? 5 steps to help determine if you should build an independent firm on your own, or use a service provider. Read-> Can Only the Biggest Firms Serve the Biggest Clients? In today's industry landscape, the biggest firms are no longer the only solution. Read-> How to answer when clients ask, “What’s in it for us?” Articulating the tangible benefits of a move to independence to your clients. Read->   About Matt Sonnen:  Matt Sonnen has 20 years of experience in the financial services industry. Prior to founding PFI Advisors, he learned the ins and outs of the wirehouse model at Merrill Lynch in the late 1990s. After leaving Merrill in 2005, he was introduced to the RIA marketplace a few years later when he helped build the infrastructure for Luminous Capital prior to its founding in 2008. As COO and CCO at Luminous, he navigated the 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. There, he helped breakaway teams and recently-formed RIAs develop strategic initiatives to benefit from best practices, streamline operations,

Breakaway Advisor Builds Her Own Firm…And Wealth Follows

Before independence was in vogue, this advisor left the comfort and familiarity of a big-name firm – plus significant chips on the table – to build her own RIA. And she did it without leveraging a service provider. Breakaway broker Dorie Fain of &Wealth shares how she banked on her client relationships, instead of “believing the hype” that she needed a big brand name behind her. It was back in 2008 that Dorie Fain chose to leave behind the security of Morgan Stanley – and $200mm of her $225mm book – to build a boutique RIA firm to serve the specialized needs of her clients. And she did it her way, without leveraging a service provider. In this episode, Mindy and Dorie explore: * Why she’s better able to service her niche client base as an independent advisor. * Overcoming “the hype” of believing advisors need the safety of a well-known firm in order to be successful. * Her experiences in working directly with a custodian to build her firm. * How to balance working on the business and in the business. * How independence fueled her growth and paved the way for her endgame. No doubt there are many clients who will only work with advisors at major brokerage firms, but there are equally as many who support the innovation and entrepreneurship of independent advisors. By following her instincts, Dorie found the courage to leave significant chips on the table and build a better way to serve her clients — and in doing so, found the collegiality and community she felt her wirehouse lacked.   Related Resources Are You a Breakaway DIYer or Delegator? 5 steps to help determine if you should build an independent firm on your own, or use a service provider. Read-> The Real Beneficiaries of Independence: Your Clients For entrepreneurial advisors, the independent space offers benefits to advisors and clients alike. Read-> Can Only the Biggest Firms Serve the Biggest Clients? In today's industry landscape, the biggest firms are no longer the only solution. Read-> How to answer when clients ask, “What’s in it for us?” Articulating the tangible benefits of a move to independence to your clients. Read->   About Dorie Fain:  Dorie is Founder and CEO of &Wealth, a boutique financial advisory firm expressly created for a select group of women who are managing major life events and their own new-found finances for the very first time. Dorie spent 12 years at Smith Barney, where she became the youngest woman ever hired into their training program. Anchored in the belief that financial planning is the foundation of investment management, Dorie wanted her clients to experience more patience, more thoughtfulness, more personalized attention, more flexibility, and a steady-as-we-go approach. She followed her instincts and founded &Wealth to offer women more of everything that mat...

Why do independent advisors grow faster than their wirehouse counterparts?

Drilling down to what’s behind the turbo-charged growth in the independent space, and how those same factors help improve client service Employee advisors are often limited to organic growth alone—that is, adding one client at a time, one brick at a time. For those who want to meaningfully accelerate their growth and use multiple initiatives to do so, organic growth alone can feel limited. It’s these advisors often feel the greatest pull towards independence. We’ve talked plenty in the past about the greater freedom, flexibility, control and customization that independence allows. But in this episode, Mindy drills down on the specific things that really contribute to the turbo-charged growth of an independent firm, including: * The option to market their personal brand and communicate with less limitations. * The opportunity to customize technology platforms to best address the needs of clients. * The ability to service clients more holistically, acting as their “buy-side advocates”. * The freedom to charge for additional services and establish referral and fee sharing arrangements with third party centers of influence. * The chance to achieve inorganic growth through M&A. Plus, Mindy answers the question: Why are the clients of independent firms necessarily better off than the clients of a wirehouse firm? So while there’s no doubt that advisors benefit from independence, they are also able to service clients in ways they couldn’t as employees. The ability to expand services, capabilities, pricing flexibility and even communications are all things that benefit both sides of the table—advisor and client. Related Resources A Multi-Generational Indy Breakaway Story Learn why a 40-year old Merrill “lifer” would walk away from the wirehouse and lead his team to the independent space in this podcast episode. Listen -> The Real Beneficiaries of Independence: Your Clients The independent space offers demonstrable advantages to clients and advisors alike. Read -> How to Maximize Growth When Adding One Client at a Time No Longer Seems Like Enough Advisors looking to turbocharge their firms find that independence allows them to focus on multiple initiatives to achieve the growth they desire. Read -> Exploring the RIA Space Why independence continues to attract wirehouse and regional advisors. Read -> Can Only the Biggest Firms Serve the Biggest Clients? Traditional firms are no longer the only – or best – option for advisors looking to service their high net worth clients. Read ->   This podcast is also available on...       ...

A Multi-Generational Indy Breakaway Story

At a time when many other advisors would be focused on retirement, this senior advisor and his team took “the road less traveled” in order to better serve their clients and business Why would Herman Rij, a 70-year-old “lifer” from Merrill Lynch, choose to leave his home of nearly 4 decades to face the uncertainty of a move to independence? And how could he and his team justify walking away from their deferred comp – into the “unknown” – that is, by starting an independent practice from scratch? To answer those questions and more, Mindy is joined by Jason Cort, President of Quadrant Private Wealth. Learn how he and 3 other Merrill advisors, including Herm who is now-Chairman of Quadrant, made the leap to independence back in 2014 with the help of Focus Financial Partners. In this episode, Jason talks about what compelled their move to independence, as well as: * Why they decided against moving to another wirehouse. * How they got their multi-generational team all on the same page. * How their clients reacted to the announcement of their move. * How they addressed Herm’s succession needs while also meeting the needs of the younger partners. * Why they chose Focus Financial Partners. * How their team has grown – and their plans for the future. So listen in as Mindy and Jason discuss how the team built Quadrant “brick by brick,” just 8 floors above their old office, but light years above their former practice.   Related Resources Am I too old to go independent? The 5 key characteristics shared by advisors who take the leap to independence. Read-> Partners at an Impasse: What to do when everyone’s not on the same page about their next move Partners who are committed to their partnership and motivated to work together will be more open to being flexible when discussing a move. Read-> Can Only the Biggest Firms Serve the Biggest Clients? Advisors are learning that there are more options than ever to service their high net worth clients. Read->   About Jason Cort:  Jason brings over 20 years experience and market knowledge to the Quadrant team. As a Founding Partner and President at Quadrant, he specializes in creating investment strategies designed to mitigate risk without sacrificing return, as well as liability management, estate planning services, and equity strategies. Prior to founding Quadrant, he was an advisor with Merrill Lynch. Jason earned a dual degree with Honors in Economics and History from Bucknell University and attained the Certified Private Wealth Advisor® (CPWA®) designation through the Investment Management Consultants Association and the University of Chicago Booth School of Business. This podcast is also available on...            

Quasi-Independence: The Sophisticated Independent Model that Offers the Best of All Worlds

Many advisors who explore full-on independence find that it’s just too much of a leap. For those folks, the quasi-independent space may be just the ticket. Although the name isn’t sexy, quasi-independence is a new-fangled and modern twist on RIAs, emblematic of how the industry landscape has expanded to address the changing needs of the advisor population at large. In addition to citing several examples of quasi-independent firms, Mindy discusses what draws advisors to the model, including: * Aggressive recruiting deals, oftentimes a mix of cash and equity. * Access to an amplified set of investment solutions. * Cutting edge technology. * Compliance and turnkey back-office support that many wirehouse advisors have come to depend upon. * Their built-in “safety net.” For advisors feeling constricted by the big firms, but not quite entrepreneurial enough to go it alone as an independent, quasi-independence could be the answer.   Related Resources Quasi-Independence: The Super-Sophisticated Boutique Model Taking the Industry by Storm The name isn’t sexy enough for this new-fangled spin on RIAs. Read-> The Spirit of Independence has never been stronger The top 5 trends of 2017 set the stage for growth in 2018. Read-> The Spirit of Independence has never been stronger [infographic] An at-a-glance view of the top 5 trends of 2017. View->   This podcast is also available on...                          Browse other episodes in this podcast series...

Dollars and Sense: How a Move to Independence Really Adds Up

How do the economics of going independent compare to the value of taking a recruiting deal from a major firm? The number one question advisors ask when exploring a move to independence is how the economics compare to accepting a recruiting package from a major firm. It’s certainly a valid concern, because while the recruiting deals being offered by the wirehouses are down, it is still very possible for a top advisor to get a really attractive hard-to-pass-up offer. In this episode, Mindy helps to answer that question by walking through a real-world example of a traditional recruiting deal offered to a wirehouse advisor and what that same advisor could expect by going independent. Mindy also explains: * Why independent advisors see on average a 20% bump in take-home pay vs. employee advisors. * Why forming an RIA means building an enduring legacy with tangible enterprise value. * The real “value” of an independent firm. The superior long-term economics of the independent space – coupled with the satisfaction of business ownership and the ability to build a real enterprise – are why many entrepreneurial advisors to take the leap. Yet it’s important to understand how those economics really compare to other opportunities you may be evaluating. Listen in to gain the knowledge you need to make an informed decision.   Related Resources The Math Behind the Move to Independence Why so many advisors are willing to forego the outsized transition packages offered by traditional firms for the superior long-term economics of independence. Read-> Exploring the RIA Space A look at the RIA space through the eyes of a wirehouse advisor. Read-> How much is my house worth? A guide to determining the enterprise value of independent firms. Read->   This podcast is also available on...                          Browse other episodes in this podcast series...

Trust in Yourself: Taking a Leap of Faith to Build an Enduring Legacy in the Independent Space