Origins and services
Sanctuary was founded by Jim Dickson, its chief executive, in 2018 and Fertitta joined a year later. Fertitta and Dickson were formerly senior executives at Merrill Lynch’s wealth management business.
Sanctuary provides technology support, gives a curated platform and assists the firms in its community in other ways, in areas such as compliance, operations, billing, technology, integration and support, tax and accounting, family office, marketing support, and practice management.
Among additional options, Sanctuary offers co-investment opportunities for acquiring other practices. It also provides liquidity options for firms to remove risks or sell up.
Fertitta said one of the important distinguishing features of Sanctuary is that it is willing to offer what client firms ask for, rather than provide a standardized offering. To some degree, this request for bespoke help came as a bit of a surprise, he said.
Another request is for chief investment office portfolios that could be seamless for clients to roll into, Fertitta said.
“All of these things have been built at the request of our partner firms and I think that’s unique. I am very active in the development process with our new recruits,” Fertitta added.
As assets under management across Sanctuary’s partner firms rise, this gives them combined buying power and enables them to negotiate lower fees, which can be partly passed down to clients, he said.
More than 70 per cent of the business conducted over the Sanctuary platform is fee-based.
Private equity funding
Fertitta disagreed that private ownership money in the wealth management space is a problem, and Sanctuary’s own involvement with Azimut has been successful and harmonious, he said.
“We decided we wanted to balance our board of investors with more active and opportunistic owners, which is what Kennedy is. These are two very different perspectives.” These differences have worked well and provided diversity, he said.
One of the strengths of Sanctuary is that it provides member firms and managers with a community of competitive peers who can share ideas, test themselves against one another, and generate innovative ideas. When many advisors quit a large firm and go on their own, they can lack such a peer network and incentive to benchmark themselves against other top advisors, Fertitta added.
Finally, FWR asked Fertitta if he expects the M&A deal flow to continue across the industry, given that there has been a lot of activity already.
“I expect the pace to accelerate as firms decide to monetize at high levels after a very long bull market,” he said.