Group Of Well-Known Advisors Team Up To Discuss Strategic Growth

Harriet Davies

1 May 2012

A group of RIAs has teamed up to form an industry council, with a plan to meet regularly and produce thought leadership on business growth strategies for independent advisors.

The members of the new “aRIA” group include: Brent Brodeski, chief executive of Savant Capital; John Burns, principal at Exencial; 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. The associated firms collectively advise on $18 billion of client assets.

As part of the group’s work, it will release white papers on long-term growth strategies for both independent and wire-house advisors, beginning with a paper due for release in the third quarter of this year.

“The group aims to make clear that advisors have many alternatives to growth versus going it alone, joining a roll-up/consolidator operation, or attempting to execute on recruiting or acquisition strategies themselves. Each participant in the study group is fully independent of private equity or venture capital and therefore free to operate under a purely synergistic framework, rather than simply looking for a good financial ‘deal’,” the firms said in a joint statement.

There has been an increasing focus on development strategies for RIAs, as these types of wealth managers become more important in terms of market share. According to a report from Cerulli Associates, which came out earlier this year, the registered investment advisor/multi-family office segment of the wealth industry grew its assets under management by 18 per cent in 2010, the fastest rate of any type of financial player.

This has caused many businesses to examine ways of growing within this segment. For example, Genworth Financial Wealth Management, a subsidiary of Genworth Financial, this month launched a "business transition services" program, which provides lending services for advisors seeking to expand their practices. Technology firms are also looking to serve this market, and this month FolioDynamix unveiled a suite of products aimed at family offices and registered investment advisors.

RIAs themselves are turning their attention to increasing profitability and competitiveness. In this environment, aggregators such as Focus Financial have expanded quickly. Last year Focus completed eight deals, and so far in 2012 it closed a $220 million revolving credit facility, with a further $100 million available, as it looks to further expand through acquisitions.

Meanwhile, an example of a merger this year between RIAs is that of Savant Capital Management and The Monitor Group, both fee-only RIAs, which are combining to form a larger-scale firm with $2.7 billion in assets under management. The combined business, Savant Capital - a member of aRIA - has ten offices across Illinois, Wisconsin, Virginia and Florida. Both firms are members of the Zero Alpha Group, a network of independent advisory firms, through which they met and, ultimately, decided to merge.

Advizent also recently launched as a membership organization for the RIA channel, which – according to its website – is “dedicated to making independent RIAs the market share leader in wealth management nationwide.”

Commenting on the formation of aRIA, John Furey, principal at Advisor Growth Strategies, a member firm, said: “This is a special group of individuals and firms coming together to highlight growth strategy options for advisors looking to materially increase their firm’s enterprise value. Each firm associated with the group has a proven track record of success in the industry, and aims to raise awareness of the different options advisors have when focusing on growth of their practices.”