The Diamond Podcast for Financial Advisors

John O’Connell, Founder and Chief Executive Officer of The Oasis Group

With hundreds of AI solutions entering wealth management, how can financial advisors determine which tools are worth adopting? John O’Connell, Founder and CEO of The Oasis Group, shares practical guidance on AI implementation, technology selection, data integration, and risk management—and explains why solving the right business problem matters more than adopting the latest technology.

In Summary

Artificial intelligence is creating new opportunities for financial advisors to improve efficiency, strengthen client relationships, and build more scalable businesses. But with AI capabilities evolving almost daily, determining where to start – and which solutions will deliver meaningful results – has become increasingly complicated.

John O’Connell, Founder and CEO of The Oasis Group, works with RIAs, broker dealers, trust companies, and family offices to evaluate, implement, and integrate technology. His firm’s AI WealthTech Map has grown from 17 to 135 companies in approximately 18 months, offering a revealing look at the expanding universe of AI solutions available to advisors.

In this conversation with Louis Diamond, John explains how firms can identify valuable AI use cases, evaluate vendors, establish appropriate safeguards, and prepare for a future in which clients are becoming increasingly sophisticated users of AI themselves.

His central message: Start with the business problem, become an educated buyer, and remember that human judgment remains essential.

The Storyline

The challenge isn’t finding AI. It’s knowing what to do with it.

A new AI tool launches, an existing wealth management platform announces additional capabilities, or a colleague shares an impressive demonstration. For advisors eager to improve efficiency and stay competitive, the temptation to adopt the latest technology is understandable.

But John O’Connell believes that approach often puts the technology ahead of the business need.

As Founder and CEO of The Oasis Group, John helps wealth management firms make smarter technology decisions, from selecting and implementing platforms to integrating data and developing effective workflows. His experience offers a perspective on both the opportunities AI creates and the practical challenges firms encounter when putting it to work.

And those challenges are becoming more complicated.

The Oasis Group’s AI WealthTech Map now includes 135 individual companies, representing approximately 550 variations of capabilities and licensing options. That doesn’t include established wealth management technology providers that are incorporating AI into their existing platforms.

For advisors, the sheer number of choices makes it increasingly important to understand what they’re buying, what their existing technology can accomplish, and whether a new solution will actually solve a problem.

John’s advice is to start small, but think strategically.

He shares a surprisingly simple first use case: Ask AI to interview the employee who knows how to perform an undocumented business process. The result can be a documented workflow that reduces operational risk while helping employees learn how to use AI effectively.

From there, firms can begin identifying opportunities with greater potential impact, including client acquisition, internal knowledge management, operational efficiency, and business scalability.

But successful implementation requires more than identifying promising applications.

John explains why advisors should establish detailed requirements before attending vendor demonstrations, understand the limitations of APIs and Model Context Protocols (MCPs), and create AI policies that address data protection, employee training, and accountability.

The conversation also examines an important distinction between employee and independent advisors.

While large firms have substantial technology resources, independent advisors may have greater flexibility to adopt emerging tools and develop AI capabilities more quickly. John believes that advantage is particularly relevant as clients increasingly use AI to analyze financial plans, evaluate investment costs, and question recommendations.

Ultimately, he sees AI as an opportunity to strengthen – not replace – the value of human financial advice.

By automating certain tasks and making information more accessible, advisors can spend more time developing relationships, exercising judgment, and helping clients navigate the complex personal decisions that technology alone cannot address.

Topics Covered

• AI adoption in wealth management: Why implementing AI successfully requires more than purchasing software or activating existing features.
• Identifying the right AI use cases: How to prioritize business problems, operational bottlenecks, and opportunities for meaningful improvement.
• Practical applications and ROI: From documenting workflows and improving meeting management to strengthening referrals and internal knowledge sharing.
• Evaluating AI vendors: Why detailed business requirements should drive technology selection, rather than impressive demonstrations.
• Wirehouse versus independent AI capabilities: How technology control, implementation speed, and open architecture influence advisors’ ability to adopt AI.
• The expanding AI WealthTech landscape: What The Oasis Group’s map reveals about the growing number of solutions available to financial advisors.
• Technology integration and data access: Understanding APIs, MCPs, and direct data feeds—and why connectivity alone doesn’t guarantee functionality.
• AI governance and cybersecurity: Establishing acceptable use policies, protecting client information, and maintaining human accountability.
• Training the next generation of advisors: How AI is changing traditional responsibilities and creating new opportunities for professional development.
• The future of human financial advice: Why AI may enable advisors to serve more clients while making personal relationships and judgment even more valuable.

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

• Why adopting AI isn’t the same as being ready to use it (10:02)
John explains why simply activating tools like Microsoft Copilot rarely produces meaningful organization-wide adoption. Training, clearly defined use cases, and appropriate safeguards are essential to getting value from AI investments.
• Where financial advisors should start with AI (13:27)
Rather than attempting to integrate every system and data source, John recommends beginning with a manageable business problem. He demonstrates how AI can document an employee’s specialized knowledge, reduce operational risk, and build confidence in the technology.
• How AI can create value beyond meeting notes (16:22)
AI note-takers can improve efficiency, but their value depends on how firms use the time they save. John also discusses using AI to understand referral sources, identify what clients value, and improve business development.
• How to evaluate AI vendors without getting distracted by the demo (22:55)
John introduces the MoSCoW framework (must-have, should-have, could-have, and won’t-have requirements) and explains how firms can use it to make better technology decisions.
• Why independent advisors may have an AI advantage (27:18)
John compares the technology adoption capabilities of large employee firms and independent businesses, explaining why flexibility and implementation speed can create a meaningful advantage as AI evolves.
• What 135 AI WealthTech companies reveal about the market (33:21)
The Oasis Group’s AI WealthTech Map illustrates the expanding range of available solutions. John explains how advisors can use a client-journey approach to identify relevant technology and avoid unnecessary purchases.
• What advisors need to understand about AI integrations (36:48)
MCPs, APIs, and direct data feeds promise greater connectivity, but their usefulness depends on which information they make available. John explains why advisors need to understand their data requirements before selecting a solution.
• What an effective AI policy should include (42:41)
John outlines essential governance considerations, including approved tools, vendor vetting, model testing, incident response procedures, and the responsibility of advisors to validate AI-generated information.
• How AI is changing the development of younger advisors (48:33)
As technology takes over administrative responsibilities, firms must reconsider how junior advisors learn the skills that matter most, including client observation, diagnostic questioning, and relationship development.
• Why AI may ultimately expand the reach of financial advice (52:13)
John explains why he sees AI as an opportunity rather than a threat. Greater efficiency could allow advisors to serve more families while preserving the human empathy and judgment clients need during important life events.

Key Takeaways

• Start with the problem, not the technology. Identify an operational challenge or business opportunity before evaluating AI tools. A small, well-defined use case can provide immediate value while helping a firm develop the skills needed for broader implementation.
• AI adoption requires training and accountability. Providing employees with access to AI doesn’t guarantee effective use. Firms need clear policies, practical training, and processes for reviewing and validating AI-generated results.
• Become an educated technology buyer. Document business requirements, prioritize essential capabilities, and ask vendors to demonstrate how their solutions address specific needs. A compelling demonstration is no substitute for functional compatibility.
• Understand what your data integrations actually provide. An MCP or API connection is only useful if it makes the information required for a particular workflow available. Advisors should evaluate data access as carefully as the technology itself.
• Technology flexibility can influence competitive positioning. Independent advisors may be able to implement emerging AI capabilities faster than larger organizations, while employee advisors depend more heavily on the tools and timelines established by their firms.
• Clients are becoming more sophisticated AI users. As investors use AI to review financial plans, compare costs, and question recommendations, advisors need to understand the technology well enough to respond confidently and effectively.
• AI can strengthen the value of human advice. Automating routine responsibilities creates opportunities for advisors to focus on judgment, relationships, and client needs. It may also make serving a larger number of families more economically feasible.

https://youtu.be/zbw2lim7tNw

Quotable Moments

On where to start:

“I like to say pick a problem that’s really easy for you to solve, and don’t try to boil the ocean.”
— John O’Connell (13:27)

On AI’s role in financial advice:

“If you’re using AI, it’s an accelerant to what you do. It’s not a replacement for your expertise.”
— John O’Connell (12:08)

On selecting technology:

“Here’s my problem I got to solve. What tool can solve that problem?”
— John O’Connell (35:56)

On the importance of requirements:

“You’ve just got to pump the brakes, really put together a set of requirements, and then figure out what’s the best solution for you.”
— John O’Connell (41:33)

On the future of financial advice:

“Can I provide more advice to more people in need? Yes. Can I do that in a way that still provides that empathy and that human connection? Yes.”
— John O’Connell (53:16)

FAQs

How should financial advisors get started with AI?

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What are the best AI use cases for financial advisors?

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How can RIAs evaluate AI tools and technology vendors?

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Do independent financial advisors have an advantage when adopting AI?

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What is The Oasis Group’s AI WealthTech Map?

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What should financial advisors know about MCPs and APIs?

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What should an AI acceptable use policy include?

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Will AI replace financial advisors?

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How is AI changing the role of junior financial advisors?

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Related Resources

The Next Frontier for Advisors: Evaluating AI in the Early Cycle
For years, technology defined the competitive edge in wealth management. Now, a new force is reshaping that landscape. Artificial intelligence is emerging as the next wave of differentiation—prompting advisors to rethink not just where they are today, but which platforms are truly built for what comes next.

Explore More Podcasts on AI & Technology
Explore conversations with industry leaders on how AI, technology, and evolving infrastructure are shaping the future of wealth management and the advisor experience.

AI WealthTech Map: The Oasis Group’s Peaks Perspective on AI Wealth Technology
The Oasis Group’s AI WealthTech Map highlights 115 firms developing AI solutions for wealth management, organized by function to help advisors explore the evolving technology landscape.

John O’Connell
Founder & CEO

John is the Founder and CEO of The Oasis Group, which helps wealth management firms navigate technology strategy, cybersecurity, and AI implementation. He created the AI WealthTech Map and the AI Readiness Assessment, and authors the Oasis Peaks Perspective newsletter to over 70,000 subscribers. With 30+ years in the industry, John is also the author of the best-selling book Rise of The Activist Investor and creator of the Activist Investor Arc framework.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

AI for Financial Advisors: An Expert’s Advice on How and Where to Start

A conversation with Louis Diamond and John O’Connell, Founder and Chief Executive Officer of The Oasis Group.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is AI for Financial Advisors: An Expert’s Advice on How and Where to Start. It’s a conversation with John O’Connell, Founder and Chief Executive Officer of The Oasis Group. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned.

And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

AI is moving so quickly in wealth management. I think it’s easy for advisors and firms to approach it backwards. The path often goes like this. A new tool launches, a platform adds an AI capability, someone shows you a demo, looks incredible. A friend told you about this chatbot. And the natural reaction is, “How do we start using this in our business?” But maybe the better question is much simpler. What problem are we actually trying to solve?

That’s one of the reasons I wanted to talk with John O’Connell, Founder and CEO of The Oasis Group. John and his team advise RIAs, broker-dealers, trust companies, and family offices on technology, data, and of course, AI. And while he comes from a technical background, he has a uniquely practical way of looking at it all. Consider this, The Oasis Group’s AI wealth tech map has grown from just 17 companies to 135 in about 18 months. And John mentions that over 500 firms have submitted applications to be on the map.

So the challenge for advisors isn’t finding AI, it’s figuring out what they actually need, what works with their existing technology and data, and where AI can create meaningful value without introducing unnecessary risk. And John’s advice is refreshingly straightforward. Don’t try to boil the ocean, yet recognize there’s much more to AI than note-taking and summarizing content. AI’s real power comes from identifying the problems or bottlenecks you’re trying to solve, and never forget that you’re still the human in the loop.

John and I get into some very practical examples of how firms can do that, plus how to prioritize AI initiatives, what advisors should understand about ACIs, MCPs, and data integrations, and why a great demo doesn’t necessarily mean you’re looking at the right technology and much more. Because with AI, changing this quickly, being an early adopter may actually matter. But being an educated buyer and an educated user may matter even more. So let’s get to it.

John, thanks for joining us today.

John O’Connell:

Thank you very much for having me, Louis.

Louis Diamond:

Awesome. Let’s dive in. Give us some background here on your backstory and what led you to where you are now as the CEO of The Oasis Group.

John O’Connell:

Thanks. Yeah, so I actually started my career as a computer programmer, believe it or not. Computer science, mathematics background, started as a programmer at Merrill Lynch. From there, I got plucked out of there into KPMG, Peat Marwick, wound up being either a consumer of technology or a provider of technology for my whole career.

I did a second tour of duty, if you will, at Merrill. I was there for the end of Merrill, unfortunately, the unpleasantness, as I like to call it. And then after that, I went to Oracle for a number of years running sales at Oracle and financial services. Then, I was in the C-suite of a couple of publicly traded companies. And then in 2019, I created The Oasis Group, and we focused pretty much exclusively in the wealth management space.

Louis Diamond:

Perfect. And what was it that led you to start your own company? Was there a need you saw in the market or what was the thesis?

John O’Connell:

I think it was primarily that I was just tired of having a board of directors or someone else who was driving the direction of the company. Believe it or not, in being in the C-suite of two publicly traded firms, what I picked up on pretty quickly was you can have the best intentions in your go-to-market strategy, but if the board decides they want to move in a different direction, they’re going to move in a different direction.

Louis Diamond:

Yep.

John O’Connell:

That was really one of the impetuses for me creating the company. That and the fact that the wealth management space is really exciting. I’ve been in this space for a very long time. It’s a really exciting space to be in. Right? There’s always a ton of change going on in it. We’ve seen this explosion in new technology that has happened really in the wealth space. When I started the firm, it was still this big explosion of new tech that was hitting the marketplace.

And I thought that we could really help a lot of firms in choosing technology and figuring out what to use it for and really create it as a force multiplier. Right? There’s so much out there, you could basically spend your whole life just buying tech, at least in the wealth space you can. So we really wanted to just help firms to figure out how to maximize that spend and how to make the right choices.

Louis Diamond:

That’s perfect. So in a nutshell, didn’t want to have bosses, wanted to be the one who was giving the advice, and really be able to act on the best ideas rather than having a well-thought-out plan stuffed by a board of directors, which I very much respect. And at its core, you’re a consultancy for wealth management firms exclusively, or who’s the target market?

John O’Connell:

So if you think of the pantheon of wealth management firms as 14 different market segments, we focus primarily on RIAs, trust organizations, broker-dealers, and then family offices. That’s our sweet spot where we do a lot of our work. And it’s not surprising, there’s different technologies for each one of those different segments, right? So it’s quite a bit to keep up to speed on. But when you take a look at those segments, they’re really handling the vast majority of the wealth that’s in the United States. So it plays to our strengths really well to be able to help with that space.

Louis Diamond:

Perfect. And what’s the typical engagement that your firm is tagged on? Is it helping firms build their tech stack for the first time? Is it retrofitting technology? Is it sorting through RFPs? What’s the typical? Or maybe there’s a couple parts to the answer.

John O’Connell:

Yeah, it runs the gamut of what you just mentioned. We’ve helped a lot of firms that have broken away, both from wirehouses or when a big M&A happens and they don’t necessarily want to go with the M&A. We’ve helped firms start up from a, “Hey, I was part of a wirehouse. Now, I want to start a completely new tech stack. What do I do?” So we’ve helped people stand that up. We’ve also helped a lot of firms that have been on technology for a long period of time, right? Maybe they’ve been on the tech for a long period of time, and their firm has changed over time.

A lot of firms have grown really well or they’ve made small acquisitions. And now, they’ve got two CRMs, need one. How do I get there? So that’s part of what we do as well. We do a lot of work, quite frankly, in the aggregator space too. Right? Private equity has been very active in our space. There’s a lot of firms that are household names at this point in the wealth management space that are buying other firms. So we’ve helped them to be able to bring the technology together. When you think of the RFP side of things, that’s where our trust organization, we do a lot of work in the RFP side for trust organizations.

Most RIAs don’t really RFP. For us in that space, it’s helping them to understand what are your real requirements? How do you focus on those? Don’t be enamored by the demo. Go in with a real set of requirements and say, “Show me this.” When you do that, you tend to get a much more accurate viewpoint of what the technology can or cannot do. But on the trust organization side, a lot of them are larger firms. They have more of a procurement organization. They’re more apt to do an RFP, and we help design RFPs, run those RFP processes.

And then unlike a lot of the other management consulting firms, we actually do the implementations. Once the firm says, “Yep, this is the direction we want to go in,” we’ll help with everything from data movement, building the new workflows and the new software, helping them with their performance reporting after the fact, handling performance history, which is usually more challenging than you would think, as well as helping them get their training done and their integrations done between the systems.

Louis Diamond:

Very cool. The typical knock on management consulting or consulting in general is you get an elegant deck. Here’s your problem, here’s a recommended solution, and then things die on a vine because implementation struggles or fails. And I get with tech why it’s so important. It wouldn’t be a podcast in 2026 without asking about AI.

I have to imagine technology, AI, wealth management, they’re all synonymous today. So what is it you’re seeing in the AI space? And maybe just that a more specific question, how do you address the gap between firms adopting AI, which is not a hard sell, but probably more importantly, being ready to really use AI?

John O’Connell:

Yeah, I’m pretty lucky. I think this year I’m going to speak at 24 different events on artificial intelligence and prediction markets. I talk a lot about prediction markets with folks as well. Where we see artificial intelligence… And by the way, when we say technology that we go-to-market with folks, that’s everything around wealth tech, AI, and data. That’s really our sweet spot, which you can imagine from a guy that spent eight half years at Oracle, data’s a big part of that.

And really data is kind of like the rocket fuel for the rocket that is AI. Right? With really good data, you can get really great results. But to answer your question most directly, what we see today is a mixed bag. We see a lot of firms that turn on their artificial intelligence. For example, they’ll turn on Microsoft Copilot, and give it to their teams, and they’re expecting their team to just pick it up. And that’s not really what’s going to happen. Do you know what I mean?

Without some training, it doesn’t really take. And you wind up finding some diamonds in the rough, people that are really good at it, that are starting to use it pretty extensively. And then for the most part, you’re not getting that real economy of scale that you want with an artificial intelligence implementation. So what we really recommend is, number one, put together an AI acceptable use policy. Put together some really good guardrails.

And that’s not just your compliance team saying, “This is what we want you to do around PII.” That’s not going to cut it. You really need to explain to folks, “These are the use cases we want you to use AI. These are the use cases we don’t want you to use AI.” For example, if you’re an RIA and you’re really big on financial planning, you don’t want to use AI with financial planning because that’s your secret sauce. You may want to use it around investment research. Right?

If you are one of the, like a family office that picks the best investments for your firm and that’s one of the things that you feel is a differentiator for you, you probably don’t want to use AI there. You probably want to use it for some other things. So really understanding these are use cases that are in balance, this is out of bounds. Here’s the tools we’re going to allow you to use, everything else is out of bounds. And then really sitting down with them and saying, “This is what our expectations are.”

With artificial intelligence, with the regulators, and even with the risk management that you’ve got of being sued, quite frankly, as a fiduciary, you’ve got to understand you’re the human in the loop, you’re going to be held accountable. So you’ve got to build that process into your AI acceptable use policy as well, so that people understand if you’re using AI, it’s an accelerant to what you do. It’s not a replacement for your expertise.

Louis Diamond:

Exactly.

John O’Connell:

You need to be held accountable for that. And that’s where we find a lot of firms fall short.

Louis Diamond:

Yep. Well said. Our goal is to always make these episodes as tangible, and we’ll say instructional as possible. So someone listening can take this information, and then get started on something or really dive into the topic. So in the world of AI that’s moving so fast that it was especially relevant here, just ask you some questions to really dive a little bit more into the implementation weeds, if you will.

John O’Connell:

Sure.

Louis Diamond:

So how does an advisor think through where AI actually belongs in their business? Like you said, like the human in the loop part. And how do they use it without creating a bigger problem than the one they’re trying to solve? Because I’m guilty of the same thing. You see a cool new tool, it promises you the moon and the stars. Cool, I want to do it because I want to grow faster, I want to be more efficient. But to me, it’s not really a thoughtful approach. And again, I’m guilty of it too. So what’s the right way to think about how an advisor can deploy AI in their business?

John O’Connell:

I like to say pick a problem that’s really easy for you to solve, and don’t try to boil the ocean. A lot of folks turn to us and say, “I want to take all my CRM data, my financial planning data, and my custodian data, and bring all that together and drive insights across my firm.” And it’s like, “Okay.” Number one, is all of those data sources really clean? Can you bring all that together? Do you even know how to do that at this point? So I like to say pick a much smaller problem, right?

Every practice that we’ve talked to, when you talk to them and you say, “Do you have an undocumented workflow that you’ve got? Do you have someplace that all the knowledge is in one person’s head?” And invariably, the answer is always a yes. Right? Okay, why don’t we use AI to solve that problem first? So to give you a great example. You can use artificial intelligence to interview that one expert you’ve got.

So let’s say Sally’s the only one that knows how to open up a certain type of an account. Great. Use AI to interview Sally on how to open up that account, and Sally will tell AI, “This is how we do it.” Right? And we’ve actually given these kind of scripts out to people and say, “Okay, here’s 10 things you want to start the conversation with.” As Sally is interviewed by AI, which will be strange for Sally the first time around, what’s happening is AI is actually documenting that entire workflow.

And then what you can do is you can say, “I want a document of this workflow and I want a visual representation of it,” maybe in Lucidchart. Guess what? Now what’s happened is you’ve reduced the flight risk of your firm. If Sally’s sick, you have it written down. Right? If Sally leaves, you have it written down. You’ve reduced the flight risk. You got something documented that’s critical to your business, and it’s a first, and there’s no PII involved in that. Right?

Louis Diamond:

Yep.

John O’Connell:

There’s no customer risk. And by the way, you’ve learned a lot about how to leverage artificial intelligence in your business. So pick the business process that’s not documented. Use artificial intelligence to document that business process. Number one, you’re going to get a great result because you’ve reduced the risk of your business.

And number two, you’ve gotten your feet wet on how to use artificial intelligence. Try not to boil the ocean. Try to pick some really easy use cases. And by the way, remember, you are the human in the loop. You’ve got to validate the output of these things. So learn how to do that as a skill, how to validate this output by picking something that’s really small and easy.

Louis Diamond:

Yeah, it makes sense.

John O’Connell:

And if you can get that documented, you’re off to the races.

Louis Diamond:

Yeah.

John O’Connell:

Now, pick the next process. And you’re going to become very adept at using this technology very quickly.

Louis Diamond:

It seems like most firms, like the most common AI that firms are using are any of the various platforms for recording and transcribing client meetings.

John O’Connell:

Yep.

Louis Diamond:

And then, creating tasks and follow-ups, et cetera. Every firm is meeting with clients. No one likes taking notes. So do you think that’s just been a really good example with really good technology around it where advisors, instead of boiling the ocean, they go with kind of the low-hanging fruit. Would you agree?

John O’Connell:

I do. I agree with that. What I find really funny though is this. When you ask people, “So you’re using an AI note-taker?” “Yes.” “How many people do you still have in your meeting?” You’re like, “Two or three.” “Okay, then what are they doing?” I’ve been in sales for a very long time, right? In sales, you would know what everyone’s role is that’s in the meeting. Right?

Louis Diamond:

Yep.

John O’Connell:

You might have technical experts. When I was at Oracle, we were selling technology, you would have technical experts in there. You’d also have someone who was the observer that was watching the body language of your customer as you presented the solution to them, right? And you’d have a scribe, someone who would actually write that stuff down. The scribe goes away with the note-taker. So what are the other people doing in the meeting? Are they learning the craft?

So do you have a junior person in the meeting that’s learning how you talk to the client? If that’s the case, they’re an observer, and they should be really soaking in the observations in that meeting. And then, they should be able to tell you what they found in that meeting. So the note-taker doesn’t make all that go away, right? So if you have an observer in your meeting, maybe you’re the advisor and you’ve got a junior person in your meeting, someone still has to review those meeting notes.

Louis Diamond:

Right.

John O’Connell:

To make sure that the facts of the meeting are captured, right? And not everything, by the way, should be written down. We’ve got advisors, for example. Advisors learn a lot of different things about their clients. A client may come in and say, “I think I’m going to get divorced.” That’s not something that should be written down in a meeting note and committed to your CRM.

Louis Diamond:

Yep.

John O’Connell:

So who edits those meeting notes afterwards to make sure that what’s being committed to the CRM is accurate? That should be your observer.

Louis Diamond:

I like it. Kind of a similar question. How does a firm think through what’s going to create the most meaningful value for our advisors or for our clients? So I get that, basically, start off with undocumented processes, the low-hanging fruit, et cetera, but those aren’t necessarily the biggest value drivers for a firm. How should firms think about that?

John O’Connell:

I think firms should really consider what’s driving their business right now. Right? So a lot of firms, for example, work on referrals. That’s probably the number one lead source that we have in the industry at this point. So if that’s the case, then what you really want to do is you want to start mining some of that data. For example, how many referrals have I gotten from individual clients? Right?

If I’ve got someone who consistently gives me referrals, maybe interview that person with an AI note-taker. Why do you give us referrals? What do you feel that we’re doing really well for you? What are we not doing really well for you? Right? Start getting a feel for what’s your sweet spot, or if you will, what’s the heat map that you’ve got around what’s resonating with some of these key clients?

So if you are driving your business by referral and you want to be more found, let’s say, by AI search engines, interview your top clients that are providing referrals for you, use an AI note-taker when you’re doing that, ask the AI note-taker to summarize all those conversations together, not individually, together. Feed all those transcripts in and say, “I want you to generate an LLM text for my website with the key points that you find from this.”

Louis Diamond:

In other words, instead of you as the advisor or the marketing department guessing what your clients want, and especially the ones that are referring you, use your client’s direct words, right? Now you have a common theme. And really what you care about are attracting more of your ideal client. And ideally, they’re people that someone’s referring you. That’s a brilliant way to do it.

John O’Connell:

And if you use it as LLM text in your website, you have your web team do that. When an LLM searches your website, it looks for that LLM.text. And when it finds that LLM.text, it’s going to index that information. So you’re essentially broadcasting what your ideal client looks like out to the world.

Louis Diamond:

Very cool.

What are you seeing as the fastest or most measurable ROI in the AI world today? We talked about note-taking as one. I would assume that’s probably one of the areas. Are there other areas where you’re seeing quick ROI or the best ROI for firms?

John O’Connell:

So larger firms, again, in some of the trust organizations we work with or some of the enterprise RIAs that we work with, what they’re doing is they’re putting a lot of the information that they would normally have embedded within, for example, their intranet or their SharePoint, and they’re indexing that using artificial intelligence. So imagine a small chatbot where you can say, “Hey, what’s vacation look like? What are the vacation days this year?” It cuts down significantly on the number of tickets that they get to their HR organization, to their IT organization.

Louis Diamond:

So in other words, more of like a ask me anything, but internal to your organization, not something that’s being deployed to clients.

John O’Connell:

Yeah, imagine like the next step of a Wikipedia. Do you know what I mean? What’s the next search capability you can do? So that’s driving a lot of ROI for people. And it’s usually, again, not PII related. Right? So it’s internal, but it can drive a lot of ROI around it. The second thing that we’re seeing where people are generating a lot of ROI is, unfortunately, around undocumented processes, like I had touched on earlier.

The mid-size and the smaller firms have tons of these undocumented capabilities that are within their firm. So we are seeing a lot of people generate ROI around that, especially if they’re growing extensively. So I’m going to come back to the aggregator for a moment. In the aggregator model, having those processes well documented so that when you buy a new firm or have a new firm tuck in under you, you can quickly explain what these processes look like.

That, we find a very, very significant ROI. It cuts down on the frustration of the new firm as they’re being acquired or they’re coming in because it’s just transparent. Look, here’s what the process looks like. Here’s a way that you can interact with this process really quickly. So it really cuts down on angst that can occur when a firm gets acquired. So we’re seeing a lot of that from an ROI perspective.

Louis Diamond:

Perfect. And going back to the point we’re talking about earlier with documenting requirements and being really clear on what it is you’re looking for a vendor, an AI vendor, to do for you. When a firm’s thinking through that list, the business requirements, if you will, and obviously if they’re working with you, it’s going to be super detailed and granular.

But at a high level, what categories of items should be on this business requirements list so that when someone shows up to a meeting with a vendor, they can turn it over? Or once they still select a platform, they can turn it over to that vendor’s implementation team or to someone like you.

John O’Connell:

So some of that is going to be more specific to the problem statement that you’ve got, right? So for example, a lot of times when we work with firms, we dig pretty deep on trading and rebalancing, right? Or the way that they want their performance reporting to be set up, or their billing as a good example. So what I would recommend is, if you’re going to look for a new wealth platform for a moment. Right?

Louis Diamond:

Yep.

John O’Connell:

Let’s say you’re on an existing wealth platform, you’re coming up on the renewal of your wealth platform, and you want to at least see what’s out there, maybe not switch, but at least understand the capabilities. What I would do is, again, use artificial intelligence, but go through each portion of your organization. What does the operations team love and hate about the existing solution? What does your trading team love and hate about it? What does your billing team love and hate about it?

Get a list of here’s the things that are going really well. Here’s the things that are super challenging for us. That’s going to be an initial, what we would call a MoSCoW list, the must-have, should-have, could-have, and won’t-have. Then, force rank them. These must be there for me to be successful. These should be there because they’re going to be better than my existing solution. These could be there. Maybe it makes one or two people’s lives easier, but it’s not like a must-have. And these are the things that won’t be there.

In other words, today, I’ve got to jump through six hoops to get something to happen. I will not do that tomorrow. Right? So those are the things that you want to get down on paper. Once you have that, give it to the vendor before the demo and say, “Listen, here’s a list of our requirements. I know you’ve got a safe path demo that you want to show us. I’m not interested in that. I really want to see these requirements. And once you’ve got that, there’s nowhere to hide. If it’s seven or eight clicks to do what you can do today in two, it’s completely obvious when you see the demo. So that’s what I would recommend if you’re going to look at any new technology.

And quite frankly, you have to be looking at things are changing so quickly, you really need to look at what’s out in the marketplace every time you come up with a vendor renewal. That’s not just me as a technology person saying that. You really do need to look at it. Whether you hire a firm like me or you don’t hire a firm like me, please do because you’re going to be in a better place. And you’re going to be a much more educated, if not buyer of new technology, certainly a much more educated consumer of the existing technology you have.

Louis Diamond:

I like that. And summarizing or paraphrasing, come up with, I liked what you said, the MoSCoW list by interviewing the key users, and then deliver that list to a vendor before the demo. I’ve sat through demos where it’s like, it sounds amazing on their website and they tell you all these amazing things. Then you get into the questions, “Hey, do you integrate with X, Y, Z? What about this?” And then, it all falls apart.

John O’Connell:

That’s right.

Louis Diamond:

And if it doesn’t work for everything you’re doing or most of what you’re doing, then what’s the point? So I like that. It also tests the firms because they can give the same demo a thousand times. So if you’re giving them something a little bit different, you really get to see how their platform or their tool works.

Let me ask you a question here. As our role as consultants to advisors, we work with advisors who are sitting within a captive organization. So think like a UBS or Ed Jones or a Merrill. We also work with advisors who are independent in some capacity, whether they’re at an independent BD, they’re owning and operating their own RIA, they’re interested in starting their own RIA, et cetera. How do you square right now, if you had to guess, the two different, I guess, AI strategies that advisors are looking at?

On the one hand it’s, “Hey, I’m at XYZ firm. I’m happy enough.” or, “I’m going to go to XYZ firm and really relying upon that firm’s technology team to implement AI and really trusting that this big firm or this firm is watching my back for AI so I don’t have to, and I’m going to use whatever they do.” Versus the more, say, independent or open architecture approach, which is, “I want to pick and choose my own AI,” or, “I want to be able to adopt my AI tools next week when they change.” Do you think one path is better than the other?

And maybe just some comments on that because I’m seeing that as like the tug of war. I don’t have an opinion on who’s right and who’s wrong. I think they’re just different. But in essence, a big firm having the tech budget, the compliance, the data, et cetera unlock and keeping the advisor focused versus having complete autonomy to pick and choose the best AI as it changes so quickly.

John O’Connell:

I think that right now with any new technology innovation, the larger firms are usually slower to react. When they do react, it can be more impactful, right? But it could take a long time to get there. And keep in mind, I was at Merrill. Two times in my career I was at Merrill, right? So when you’re in a large firm, part of the challenge you run into is things are changing so quickly at the moment that you’re not going to be able to move as quickly as you would as an independent. It’s just not going to happen. There’s more impetus around it.

It’s trying to change the direction of the Queen Mary. It takes a lot longer to turn the boat around. So I think, right now, independent firms have a significant advantage at the moment. And the reason I say that is, number one, they’re getting exposed to the technology faster and they have more of an ability to get their feet wet on it. It’s a skill. Using artificial intelligence is a skill, being able to prompt it to get the right results, understanding what kind of data you feed it really does affect the results that you get back from it. Bringing that skill takes time. You’re in Park City, you’re probably familiar with Warren Miller.

Louis Diamond:

Yep.

John O’Connell:

He used to make all these ski films. He used to end every one of his movies with, “If you don’t hit the slopes this year, you’ll be a year older when you do.” Right? It’s the same thing with AI. If you don’t start now, you’re just going to be older when you start it, not age-wise, but you’ll be further behind, if you will, the independent firms that have already jumped into this and have started using it.

I do feel that the larger firms are at slightly more of a disadvantage at the moment, and I don’t see that gap closing anytime soon. Now, look, you’ve got firms like Bank of America that created Erica, and I think Erica is a great product. I’ve seen it. I think it’s very impactful, but it’s nowhere near what I’m seeing some of the independent firms doing at the moment. They’re just moving significantly faster.

Louis Diamond:

Yeah. And it sounds like too, other than the speed to make decisions, which has always been the independent technology narrative. I think it’s even more relevant today. It’s also that if you’re an advisor who especially is going to be in this business for a while, if you’re the one who’s responsible or on top of building your own tech stack or being more involved with picking tools, you’re probably going to be better at using AI for the future. And you’re kicking the can down the road if you’re just going to throw up your hands and trust that your firm has got it and you’re just going to ebb and flow with whatever the firm makes available.

John O’Connell:

And there’s a bigger risk, right? Your clients are using this today.

Louis Diamond:

Yep.

John O’Connell:

We’ve already had advisors that have come to us and said, “My client took the financial plan that I gave them and put them into AI and came back with 20 questions.” I’ve already had firms in the trust organization space that have come back to me and said, “One of the trusts that we did an RFP response to ranked our RFP against our competitors using artificial intelligence.”

Or, “They took the trust documents that we had and came back with all these questions, take a look at this.” And we’ve looked at them and we’re like, “Yeah, that was generated by AI.” The technology is so prevalently available right now. This is not like tech where a large firm has had access to it before an independent or before a consumer.

Louis Diamond:

Yep.

John O’Connell:

Any consumer can open up ChatGPT, take your financial plan, roll it in there. Now, we’ll put the security aspects aside for a moment on that, but they can open up literally any one of the four leading large language model products. Take what you’ve given them as output, run it through that product, and come back to you with questions. We even had one advisor that was questioned on the expense ratio. So this client had taken their holdings, put it through Google Finance, got the expense ratios. And came back and said, “Why am I in so many expensive things?”

Louis Diamond:

Very smart and savvy.

John O’Connell:

It’s very savvy on the consumer side, but these are questions that consumers are bringing up now to advisors. If you’re in a wirehouse and you’re not being exposed to these kind of questions, it’s only a matter of time before your client comes to you with that as well. And if you don’t have an answer for it, you’re going to look like an unarmed combatant in that conversation.

Louis Diamond:

It sounds like with your example too, that advisors should be prepared that, because of AI, their clients appear to be more educated or more informed than ever before.

John O’Connell:

That is correct.

Louis Diamond:

I always kind of chuckle. Advisors are so focused on the, “I can increase the manager fee from 16 bips to 18 bips.” I’m like, “I work with a financial advisor, I wouldn’t notice.” I feel like there’s a lot of things that a client just trusts their advisors to do. They don’t really question it. But now with AI, I mean, you can stress test and poke holes in anything that someone shares. It’s such an interesting dynamic.

Everyone talks about the, oh, AI is going to take the job of an advisor. I think now we’re at the point where it’s like, no, AI is going to make advisors be better advisors and be more transparent. And clients are going to be more challenging to work with because they have more information than ever before.

John O’Connell:

Yeah. The old joke was you never wanted an engineer or a computer scientist to be your client, right?

Louis Diamond:

I’ve heard that too.

John O’Connell:

Because they would question everything. Now, I think that you’re going to see that your consumer is significantly more educated. And your next gen, by the way, is going to be light years ahead of your existing client base. So you’ve got to get on board and understand these technologies and how they work, because you’re going to come across as being an old school advisor, if you will. Right?

Louis Diamond:

Yeah.

John O’Connell:

And certainly, we all know the statistics on money movement challenges in our industry. They’re not going to get any better with the use of artificial intelligence.

Louis Diamond:

Yeah. When you say money movement, meaning when G1 passes away, G2 disproportionately chooses to not work with the incumbent advisor.

John O’Connell:

That’s correct, and that’s going to continue. I think that number is actually going to go up, believe it or not.

Louis Diamond:

Interesting. I think we found you because I’ve seen your AI wealth tech map. Can you talk a little bit about the work you did to create this AI wealth tech map? What does it do? What are the segments, or I guess segments of the map? How should people use it?

John O’Connell:

Yeah, it’s pretty interesting. When we first started the map, the first thing we said is we really wanted it to map a client journey. Right? It wasn’t going to be by a technology, some technology marker we gave it. So for example, we don’t have like a AI note-taker ability in the map. Right? We’ve got it as meeting management, because AI note-takers really should go beyond just taking notes in a meeting. They should be able to schedule a meeting and generate follow-ups and tasks. So it’s really more of a meeting management.

So if you think of our AI map, it goes through a client journey. How do you prospect? How do you do discovery with a client? How do you manage meetings with a client? Where did you go with proposals? So it really follows that client journey. When we started the map, which was just about 18 months ago, there were 17 firms on it. The latest map has 135. We demo every one of those tools. So we’ve rejected, on our count at this point, about 30% of the firms that apply for the map get rejected.

Louis Diamond:

Right. And this is 135 discrete companies, or is it like XYZ company fits into nine different categories, so it’s on here nine times?

John O’Connell:

135 individual companies.

Louis Diamond:

That’s crazy. Think about any AI tool. They’re going to have different modules, the pro, the premium, the free version. They can sign up for this or that. So really, the choices are even more abundant than 135.

John O’Connell:

Yeah. If you take a look at the number of permutations between licensing levels and their capabilities they’ve got, it’s more like 550 that fit the mark. It’s incredibly interesting, right? And these are new entrants. These are not, like, your incumbent CRM that added a note-taker to it. That’s not on the map at this point. These are net new firms that have entered the space. And because we’ve demoed all of them, we’ve rejected quite a few. Right? If you look at it and you say, like, if we couldn’t implement it as The Oasis Group, we’re like, “This is not ready for prime time.” Right? Because there is vaporware out there.

There’s AI washing that we’ve seen where it’s like you’re really a workflow tool. You’re not an AI tool. You do workflow management, but there’s no AI really in this. So if you took those two letters away, your tool would do the exact same thing it does today. So it’s not an AI tool. So we’ve rejected firms like that as well. For better or for worse, there are more and more people with private equity coming into our space that feel that they can solve a lot of these challenges that advisors have. And that’s a great thing for advisors, right? But it’s also a daunting task because you get our map that has so many firms on it. How do you figure out which firm is going to serve you well?

And that’s why we really broke it out by the client journey. Right? Someone doesn’t turn and say, “You know what? I need a new CRM today.” It’s more like, “Hey, these are things that are failing. My discovery process is disjointed. It’s not feeding from my prospecting capability into my onboarding capability.” You need to solve that problem. Is it a CRM that solves that problem? Some of them do. Is it a workflow tool that solves that problem? Some of them do. As the advisor, you’re not looking at it from a technology lens, you’re looking at it as, “Here’s my problem I got to solve. What tool can solve that problem?” So that’s why we approached the map the way we did.

Louis Diamond:

Makes sense. In the last couple of weeks, couple months, what segment of this journey are you seeing the most proliferation of technology? Or maybe put another way, or second part of the question, what are you most excited about that’s coming to market that you’re starting to see some innovation around?

John O’Connell:

I think the most exciting thing that I’m seeing right now is really around the workflow capabilities and the integration capability. A lot of people are excited about this new integration capability called MCP, Model Context Protocols, which gives you the ability to link data in between systems. And that’s great, right? But at the end of the day, it’s all still built upon what’s exposed via the MCP.

And just like people got really excited with APIs, Application Programming Interfaces, and they were like, “They have an API.” They might have an API, but if they only expose 10 fields and you need 30 of them, it doesn’t help you. Right? And I think what we’re finding is people are very excited about MCP technology, but it suffers some of the same challenges you see with APIs. Right? If you’re not exposing the data that I need, it’s not very helpful.

Louis Diamond:

Right. So I think to make it tangible, you’re talking about MCP being the cloud connectors. And Anthropic at Future Proof dropped the big news that they had now, MCPs with Schwab, with Black Diamond, with Addepar, et cetera. I think I heard that if Schwab is read only and it’s only certain data fields, then the applicability or the usefulness of this new platform is limited because the MCP isn’t as extensive as it could be.

John O’Connell:

Yeah, I’ll give you a really concrete example of that. Let’s say that you do tax-loss harvesting within your business, and the Schwab MCP does not have the tax law data. Useless to you. You can’t do tax-loss harvesting without the tax law data. So how is that useful to you? So I think what we’re seeing is this really great explosion in new tech and I thought the Anthropic announcement was really interesting. Again, as a buyer, dig under the covers of that. Right? Don’t be just enamored by the fact that they have an MCP connection to Schwab. That’s great.

But if you use Schwab’s APIs, you can get, for example, all of that tax law data. You can get actually a lot more data from a direct Schwab integration than you can with any one of the wealth platforms today. Right? So that’s why you see large firms build like a data lake where they take Schwab data directly into the data lake, and then they machinate the data there because data that comes into the wealth platform tends to be a lot than what you can get from a Schwab integration directly.

It’s like buyer be educated, so that you’re buying the right thing. It all really comes back to the requirements. If you’re doing tax-loss harvesting, you’ve got to ask the question, “Hey, does your integration include the tax law data that I need, so I can do effective harvesting?” If that’s a requirement, you’ve got to ask those questions. And then whether it’s an MCP connection or an API connection or a direct feed, you’re going to know where you can get the data that you need to be successful.

Louis Diamond:

Makes sense. Where do you see all this AI going from the vendor standpoint? Do you think it’s something where you see a bunch of vertical integration within wealth, like Orion has always been inquisitive, but Orion buys up seven different AI tools, integrates it into their own, and then all of a sudden you have five or six vendors, Salesforce, whoever, WealthBox, et cetera, start buying the ecosystem underneath them? Or do you think this 135 and growing kind of map of solutions will continue, and advisors and firm owners continue to be like, “There’s seven different note-taking apps, what do I pick?”?

John O’Connell:

Yeah. I think that you’re going to find a combination of both. Right? So look at Advisor360° bought Parrot AI, and now they’ve got Parrot completely integrated within their solution. Right? So you’ll see firms like that. Wealthbox built their own AI note-taker. So you’re seeing solutions like that. Right? You’re seeing, by the way, all the note-takers are now getting into workflow management, light CRM capability, or data discovery to try to really take over part of that prospecting and sales portion of the advisor workflow.

So I think that you’re going to see a combination of all of those things. You’re going to see incumbent firms buying technology to get speed to market, which by the way, comes with integration challenges, data model challenges like you would with any acquisition. You’re going to see firms building their own solutions. Orion is investing pretty heavily in Denali at this point to build their own solution. Advyzon is invested pretty heavily in their AI solution. So I think you’re going to see a combination of all of it.

Now, what does that mean for the AI map? The AI map’s not going to slow down. The number of firms that are reaching out to us, we probably have about four to five firms a week that reach out to us to get onto the AI map. We’ve got two folks on The Oasis Group team that focus on getting those people vetted and getting them on the map. I think that you’re going to see the map continue to grow exponentially over the next two years. I just don’t see that slowing down at all at this point.

Now, what does that mean for the advisor? It means they’re going to have a lot of choice, but it does mean that they’re going to need to continue to become more of an educated buyer. The demos are always going to look great. In fact, with artificial intelligence, the demos look better than ever. So if you’re going to be a buyer that just goes in and looks at a demo, you’re probably going to buy technology and be unhappy with it after you get that implemented or during the implementat…

Steve Chubak, Managing Director at Wolfe Research

What can advisors learn from the way institutional investors evaluate wealth management firms? Wolfe Research’s Steve Chubak offers a different lens on growth, recruiting, AI, pricing, M&A, and what separates stronger firms from the rest.

In Summary

Financial advisors and institutional investors often evaluate the same wealth management firms—but from very different vantage points.

Advisors may be asking whether a firm offers the platform, technology, economics, and resources they need to serve clients and grow their businesses. Institutional investors are digging into another set of questions: Is that growth sustainable? What does it cost? How effectively is the firm deploying capital? And what could change its economics over time?

Steve Chubak, Managing Director at Wolfe Research, spends his days studying those questions across the wealth management ecosystem. His research covers firms ranging from wirehouses and regional brokerages to custodians, broker dealers, and alternative asset managers.

Here, Steve brings that institutional perspective to the issues that matter directly to advisors. He explains why investors increasingly distinguish between growth generated by recruiting and growth generated by existing advisors, how rising transition assistance is changing the economics of recruiting, and why organic growth remains one of the most important measures of a firm’s health.

The discussion also explores AI’s potential impact on productivity, advisor fees, and firm pricing; the evolving economics of cash sweeps and platform fees; the Vanguard-Altruist transaction; consolidation across the industry; and why human advice may prove more resilient than some predictions suggest.

The result is a different framework for evaluating the firms advisors work for, partner with, or may someday consider joining.

The Storyline

Steve occupies a unique seat in the wealth management industry.

Rather than evaluating firms as an advisor, recruiter, or executive, he studies them on behalf of institutional investors. His team at Wolfe Research looks across the wealth management ecosystem and analyzes how individual firms are positioned, where growth is coming from, what it costs to generate that growth, and what risks could alter the outlook.

That distinction drives the conversation.

Jason initially asks what institutional investors may see that retail investors and advisors miss. But the discussion reveals something more useful: Both groups are trying to answer many of the same fundamental questions, just for different reasons.

An investor may want to know whether a firm’s organic growth can support its stock price. An advisor considering that firm wants to know whether its platform, economics, technology, and strategy can support their business for years to come.

The overlap leads into a deeper discussion of advisor movement and recruiting. Steve explains why investors increasingly care not just about net new assets, but about the cost of acquiring them. As transition packages have risen, the market has become more focused on the difference between “new store” growth generated through recruiting and “same store” growth generated by advisors already on the platform.

From there, the conversation turns to AI—not simply as a technology story, but as a potential catalyst for broader changes in wealth management economics. Steve sees significant potential for AI to improve advisor productivity and platform efficiency while raising longer-term questions about pricing, cash monetization, and how firms get paid.

This naturally connects to cash sweeps, platform fees, consolidation, M&A, and the competitive positions of some of the industry’s largest firms.

Ultimately, Steve’s institutional lens offers advisors another way to evaluate a firm: Look beyond the recruiting package or headline growth number and ask whether the business underneath it is durable.

Topics Covered

• How institutional investors evaluate wealth management firms
• What advisors and institutional investors may learn from one another
• Why advisor movement matters to investors
• Organic growth, net new assets, and the cost of asset acquisition
• “Same store” versus recruiting-driven growth
• Rising transition assistance and recruiting economics
• AI’s impact on advisor productivity and platform efficiency
• Potential long-term pressure on advisor fees and pricing
• Cash sweeps, cash monetization, and platform fees
• Why transparent pricing could better align firms, advisors, and clients
• The Vanguard-Altruist transaction and the RIA custody landscape
• The competitive positions of Morgan Stanley, LPL, and Schwab
• Private equity-backed wealth management firms and leverage
• How firms should balance recruiting growth with capital discipline
• Why human financial advice may remain resilient in an AI-driven world
• The KPIs Steve uses to evaluate wealth management businesses
• Data ownership, AI, and the potential case for self-clearing
• M&A, industry consolidation, and why strategic buyers may have to “buy it twice”

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

How the institutional view differs from the advisor view — 08:05
Steve explains why institutional investors tend to go much deeper on individual companies, competitive positioning, and the “game theory” behind industry change, while advisors often take a broader, relationship-driven view.

Why advisor movement matters to Wall Street — 11:28
Jason connects Steve’s research directly to the questions advisors ask when evaluating firms. Steve explains why organic growth, net new assets, and the cost of recruiting advisors receive significant attention from institutional investors.

Why all growth isn’t created equal — 13:38
As recruiting packages have increased, investors have become more discerning about the quality and cost of growth. Steve explains why growth generated by existing advisors can sometimes be more attractive than growth purchased through recruiting.

AI: Productivity opportunity or pricing threat? — 16:09
Steve describes himself as moderately bullish on AI, particularly because of its potential to improve advisor productivity and platform efficiency, while acknowledging longer-term questions around monetization and pricing.

Rethinking cash sweeps and platform fees — 17:55
Steve breaks down how firms monetize client cash and makes the case for a more transparent pricing structure that could better align the economics of clients, advisors, and firms.

What Vanguard-Altruist could mean for RIA custody — 23:53
Steve puts the transaction into perspective and discusses Altruist’s potential to move upmarket, while explaining why Schwab’s breadth, scale, technology, and product offering remain formidable competitive advantages.

Which firms could keep gaining share? — 26:54
The discussion turns to Morgan Stanley, LPL, and Schwab and why Steve believes each could continue consolidating share within its respective channel.

The economics behind increasingly large recruiting deals — 30:48
Jason and Steve debate how much firms should spend to recruit advisors, the importance of capital discipline, and whether maximizing recruiting growth is always worth the cost.

Will AI force advisors to lower their fees? — 35:43
Steve sees potential for some pricing pressure but explains why advisory fees have historically demonstrated greater resilience—and why increasingly sophisticated advice may help preserve that value.

Why the last 20% of advice may matter most — 38:50
Using his own experience trying to replace a lawyer with an LLM, Steve explains why technology can get surprisingly far while still leaving a critical gap where human expertise, judgment, and reassurance matter.

The KPIs that reveal the health of a wealth management firm — 40:51
Steve shares the metrics he looks at first, including organic growth and operating leverage, and explains why unusually low expense growth can sometimes signal underinvestment rather than strength.

What could drive the next wave of industry change — 42:18
Data ownership, AI, self-clearing, M&A, and consolidation come together as Steve considers what firms may need to control – and invest in – to remain competitive.

Key Takeaways

• Look beyond headline growth.

Recruiting success and strong net new asset numbers can be impressive, but Steve’s institutional framework asks a second question: What did that growth cost?

As transition assistance has increased, investors have become more focused on the quality of growth—not simply its quantity. For advisors evaluating a firm, that same question can reveal whether its strategy appears sustainable.

• Organic growth may tell you more about a platform than recruiting alone.

A firm that helps its existing advisors grow can demonstrate something important about the strength of its platform, technology, service, and capabilities. Steve describes organic growth as one of the first metrics he examines when evaluating a wealth management business.

• AI’s biggest impact may come through its knock-on effects.

The immediate opportunity is productivity. The longer-term questions involve pricing, cash monetization, platform fees, data ownership, and competitive positioning.

Rather than viewing AI as a standalone technology issue, Steve considers the “game theory” around how one change could force responses across the industry.

• Firm economics matter to advisors—even if they never plan to become investors.

A firm’s capital allocation, growth strategy, recruiting costs, technology investment, and revenue model can ultimately affect the advisors who work there.

For an advisor evaluating a potential firm, model, or equity partner, understanding the health of the underlying business can add another dimension to the decision.

• Human advice still has a powerful value proposition.

Steve points to the limited adoption of robo advice relative to early predictions as one reason not to assume technology will eliminate demand for advisors.

His own experience using an LLM for legal work illustrates the point: Technology may handle much of the task, but the remaining portion can involve exactly the complexity, judgment, and confidence for which clients value a professional.

https://youtu.be/ps_8bq2CE9E

Quotable Moments

On the difference between institutional and wealth management perspectives:
“There are times when [institutional investors] are myopically focused on the numbers.”

On what institutional investors increasingly want from growth:
“Good NNA profile, but not necessarily overpaying for that growth.”

On AI and the wealth management industry:
“From an advisor productivity standpoint and from a platform efficiency standpoint, I think that AI is a huge boon or windfall for the industry.”

On creating better alignment:
“My preference has always been for more transparency and more alignment of incentives.”

On the continuing value of human advice:
“People do value advice, human intervention.”

On technology getting most—but not all—of the way there:
“I got about 75 to 80% of the way there. And that last 20%, I was incredibly uncomfortable.”

On evaluating a wealth management business:
“Organic growth first and foremost.”

On M&A involving advisor businesses:
“You have to buy it twice.”

FAQs

What do institutional investors look for when evaluating wealth management firms?

Steve identifies organic growth as one of the most important indicators, along with operating leverage and the balance between investing for future growth and delivering earnings today. Investors also examine net new assets, the cost of acquiring those assets, recruiting economics, technology investment, and the durability of a firm’s business model.

Why does advisor recruiting matter to institutional investors?

Advisor movement can materially affect organic growth and net new assets. But investors increasingly look beyond how many advisors a firm recruits to consider how much it spends to acquire that growth and whether those economics can produce attractive long-term returns.

What is the difference between “same store” and “new store” growth in wealth management?

In the context of this discussion, “same store” refers to growth generated by advisors already on a firm’s platform, while “new store” growth comes from newly recruited advisors and their assets. As recruiting costs have risen, Steve says investors have placed greater value on strong same-store growth because it can represent a less expensive source of net new assets.

How could AI affect financial advisor fees?

Steve expects AI to improve advisor productivity and firm efficiency but believes it could create some longer-term pricing pressure. He notes, however, that advisory fees have historically proved more resilient than pricing in areas such as asset management and brokerage, particularly where clients value complexity, judgment, and human advice.

Could AI replace financial advisors?

Steve does not see technology eliminating the value of human financial advice, particularly for clients with complex tax, trust, investment, and planning needs. He points to the experience of robo advisors as evidence that predictions of widespread replacement of human advice have not played out as many originally expected.

What are cash sweeps, and why do they matter?

Cash sweeps allow firms to earn revenue from idle client cash held on their platforms. Steve argues that this can create a less transparent exchange of value and suggests the industry could gradually move toward more transparent platform fees paired with more competitive rates on client cash.

Will platform fees cause advisors to change firms?

Based on Wolfe Research’s analysis of firms that have introduced platform fees, Steve says they did not find tangible evidence of significant disruption to advisor recruiting or organic growth. His view is that advisors may be more focused on the quality of a firm’s technology, service, and overall platform than on a modest platform fee.

What makes a wealth management firm attractive from an institutional perspective?

Strong organic growth, disciplined spending, effective technology investment, attractive economics, and a sustainable competitive position all matter. Steve also emphasizes the importance of balancing growth with free cash flow rather than pursuing growth at any cost.

How could consolidation reshape wealth management?

Steve expects scale players to continue gaining share across different channels and discusses Morgan Stanley, LPL, and Schwab as firms with significant competitive advantages in their respective markets. He also sees potential for further M&A, although strategic acquisitions can be complicated by the need not only to acquire a business but also to retain its advisors.

What should financial advisors consider when evaluating a firm or equity partner?

Beyond payout, recruiting packages, and platform capabilities, advisors can benefit from examining the durability of the underlying business. Organic growth, capital discipline, technology investment, competitive positioning, ownership structure, and the firm’s ability to adapt its revenue model can all offer clues about whether the organization is positioned for the future.

Steve identifies organic growth as one of the most important indicators, along with operating leverage and the balance between investing for future growth and delivering earnings today. Investors also examine net new assets, the cost of acquiring those assets, recruiting economics, technology investment, and the durability of a firm’s business model.

Advisor movement can materially affect organic growth and net new assets. But investors increasingly look beyond how many advisors a firm recruits to consider how much it spends to acquire that growth and whether those economics can produce attractive long-term returns.

In the context of this discussion, “same store” refers to growth generated by advisors already on a firm’s platform, while “new store” growth comes from newly recruited advisors and their assets. As recruiting costs have risen, Steve says investors have placed greater value on strong same-store growth because it can represent a less expensive source of net new assets.

Steve expects AI to improve advisor productivity and firm efficiency but believes it could create some longer-term pricing pressure. He notes, however, that advisory fees have historically proved more resilient than pricing in areas such as asset management and brokerage, particularly where clients value complexity, judgment, and human advice.

Steve does not see technology eliminating the value of human financial advice, particularly for clients with complex tax, trust, investment, and planning needs. He points to the experience of robo advisors as evidence that predictions of widespread replacement of human advice have not played out as many originally expected.

Cash sweeps allow firms to earn revenue from idle client cash held on their platforms. Steve argues that this can create a less transparent exchange of value and suggests the industry could gradually move toward more transparent platform fees paired with more competitive rates on client cash.

Based on Wolfe Research’s analysis of firms that have introduced platform fees, Steve says they did not find tangible evidence of significant disruption to advisor recruiting or organic growth. His view is that advisors may be more focused on the quality of a firm’s technology, service, and overall platform than on a modest platform fee.

Strong organic growth, disciplined spending, effective technology investment, attractive economics, and a sustainable competitive position all matter. Steve also emphasizes the importance of balancing growth with free cash flow rather than pursuing growth at any cost.

Steve expects scale players to continue gaining share across different channels and discusses Morgan Stanley, LPL, and Schwab as firms with significant competitive advantages in their respective markets. He also sees potential for further M&A, although strategic acquisitions can be complicated by the need not only to acquire a business but also to retain its advisors.

Beyond payout, recruiting packages, and platform capabilities, advisors can benefit from examining the durability of the underlying business. Organic growth, capital discipline, technology investment, competitive positioning, ownership structure, and the firm’s ability to adapt its revenue model can all offer clues about whether the organization is positioned for the future.

Related Resources

Steven Chubak, CFA

Steven Chubak joined Wolfe Research in September 2018 as a Director and Senior Analyst covering Brokers, Asset Managers & Exchanges. Steven has been recognized as a top three analyst by the Extel All-America Research poll in 2021-2025.

Steven previously worked as Senior Equity Research analyst for five years at Nomura Instinet. In 2014 and 2015, he was recognized by Extel as a “Rising Star” for his work in both the Large Cap Bank and Broker/Asset Manager categories.

Prior to joining Nomura Instinet, Steven was a partner at Autonomous Research, and before that as an associate analyst at Bank of America and JMP Group. Before embarking on a career in sell-side equity research, he was an associate for the Global Growth team at Alliance Bernstein, and a Structured Products analyst at HSBC.

Steven graduated from the NYU Stern School of Business with a degree in Finance/International Business and is a CFA® charterholder.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

True Alignment: Advising Business Owners on Wealth, Significance, and Value

A conversation with Jason Diamond, Nick Hubert and Taylor Gentry – Founding Partners at Panoramic Capital Partners.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is True Alignment: Advising Business Owners on Wealth, Significance, and Value. It’s a conversation with Nick Hubert and Taylor Gentry, Founding Partners, Panoramic Capital Partners. I’m Jason Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

Advisory firms that work with business owner clients typically operate through a fairly traditional wealth management lens. The business may be the source of the wealth, but the advice itself often centers around investments, planning, and asset allocation, yet Panoramic Capital Partners approaches that equation differently.

Nick Hubert and Taylor Gentry are the founding partners of the roughly $450 million RIA, serving about 150 families with a seven-person team. And while they come from very different professional backgrounds, Nick with more of a relationship and storytelling orientation, Taylor from the analytical and private equity side, they’ve built the firm around a shared philosophy tied to what they call personal significance, personal wealth, and personal value. A big part of that philosophy, or the north star as they put it, is applying some of the same accountability and long-term thinking frameworks commonly seen in private equity to the advisory relationship itself, not in a transactional sense, but in helping clients think more intentionally about decision-making, alignment, and outcomes over long periods of time.

As a result, our conversation delves deeply into the private equity world, reframing how clients and advisors should consider this important tool as both a growth mechanism and a strategic part of their client’s plans. We talk about how that perspective also shapes not only how they think about serving business owners specifically, but also the role private equity should play in wealth management. Then we take a view of their long runway and how they and other younger advisors might see things differently about building firms today and why clarity of vision may matter more than sheer scale in the years ahead, and much, much more. It’s a narrative that is refreshing and informative, so let’s get to it.

Taylor, Nick, thank you so much for joining. Walk us through your background. What brought you to the world of wealth management? Nick, let’s start with you.

Nick Hubert:

Sure. I think I got my first taste of the industry actually in a sophomore year of college internship, or I interned at Morgan Stanley here in Oregon. I studied finance and accounting at University of Oregon, and so I had this affinity for finance and markets and had that privilege of having that internship. So I had it early on in my career. Ultimately ended up setting my sights on doing investment banking and going that route and did that for a short period of time. Ended up not going very long due to a medical reason, so you don’t have to be that sorry for me. And ultimately started my career in business consulting before pretty quickly realizing that I want to get back to finance, back to investing these things that just felt like core competencies and that thing that you keep coming back to when you’re alone in the middle of the night thinking about stuff, it was always that. Just had this desire to work with smaller units than large corporations, which is great for wealth where you get to work with families and small businesses. And so it was just a natural alignment that took me back full-time to the space in 2016.

Jason Diamond:

I like the framing it through the size of the unit you’re working with and having more of an impact on the family.

Taylor, what about you?

Taylor Gentry:

I’m a little more circuitous, if you will. Spent a couple of years in investment banking, so you can be sorry for me. Nick and I met in undergrad at the University of Oregon, had the opportunity to work in this investment group together where we were investing a portion of the university’s endowment. And like Nick, interned in wealth management and kind of walked away from it going, “Boy, that’s boring. I don’t really like that.” And so moved to New York, cut my teeth in banking for a couple years and we were working… So an investment bank for context, helping companies raise debt, raise equity, and with mergers and acquisitions, we’re working with huge companies. So the Mattels of the world, the largest toy company in the world.

Like Nick, realized, “Hey, I’m going to work with smaller companies that we can get our arms around a little bit better and be more helpful with and have a bigger impact on.” So spent about 10 years with a private equity firm in the western half of the US and we invested in companies in what’s referred to as the lower middle market. So companies doing 50 to 300 million of revenue. And we would invest in those companies, grow those businesses and then look to sell them. Awesome experience, learned a ton, got a bunch of experience around how to invest in companies, how to grow businesses.

Then had the opportunity to step into the CFO seat of a couple of different operating companies during that time. It was just a great learning ground, but also to see a whole bunch of different situations. Nick and I have always invested in things together. We’ve worked on things together and we’ve always wanted to work together full time. And a few years ago, the stars really just aligned to say, “Hey, what would it look like to create a differentiated offering in the wealth space where we can blend my background on companies, transactions, how to draw on scale and all those pieces and really marry that with the wealth management piece?” And Nick will get into that further, but it’s just a really unique way to partner with families and companies that are smaller which can have a really high impact experience with those families and really move them through their life journey, if you will.

Jason Diamond:

Yeah, there’s a lot to unpack there and we’ll get to some of the elements of how you run the business today. First of all, you can’t fool me by using a toy company as your example to make investment banking more interesting. I’m just kidding. Actually, my real takeaway there is you have a skillset that is incredibly relevant in the current wealth management ecosystem, especially in the model you’re currently in. So let’s talk about that a little. Tell us about your current chapter, which is Panoramic Capital Partners. Who do you serve? What types of clients? Give me some perspective on size as well.

Nick Hubert:

I’m going to take this first. Taylor can do the PE background side and give you a bunch of numbers. I’ll give you the story and see if we can piece it together that way.

Jason Diamond:

I get the impression you guys use that line a lot.

Nick Hubert:

Oh, no, that’s the first time. How’d it land? Jason, I spent eight years at our prior firm with our third founding partner, Andrew, and he was at that firm for 30 years. And so we’ve got this core DNA that we’ve always carried of serving high net worth families in a very holistic and deep planning-based capacity, which I think a lot of modern firms say that. And so that’s not necessarily that different, but it is a DNA that carries through.

When we got struck with this vision of launching Panoramic and what inspired us to build the firm, it was as, Taylor outlined, around this idea of how do we partner with entrepreneurs and business owners more holistically across their entire entrepreneurial journey, not just around the exit as is so often where the gravity of the conversation sits. And so our firm vision and inspiration was all around that. And since launching in May of 2024, it has been about how do we bring that vision to life with a different business model. And to your point, there’s a bunch to unpack there, but that is ultimately the founding vision of what we are trying to build here overall and what inspires us every day to say, how do we, as Taylor mentioned, bring the combination of skillsets to bear in a way that allows us to be a better partner along the entirety of the journey as opposed to just towards the end when assets traditionally show up, so to speak?

So that’s a story from a vision perspective. Taylor, I don’t know what you want to add to that.

Taylor Gentry:

As Nick outlined, it’s the ability to work with folks throughout the lifecycle. So in private equity, you invest in a company, you work with that management team for three to seven years and then you sell the business and move on to the next project or deal. And really, it’s the deal mechanic that is the value creation. Whereas, with what we are building here, we have the opportunity to really step along the journey with folks when they are in the early phases building what we talk about as the middle phase of allocating, and we’ll talk about this further, and then really the third phase of stewarding capital along the way. And it’s a life cycle or entrepreneurial journey that we’re able to be hand in hand with folks over decades opposed to measured in three to five year spans.

Jason Diamond:

So it sounds, and you’ve both kind of touched on this now, your different backgrounds, you view as very much a positive because it gives you, Taylor, the more in the weeds analytical perspective. Nick, you’re probably more the storyteller. Do you find that to be a benefit when you’re running your firm every day? And are there instances when it’s a negative? Is there ever a time when you say, Taylor, just maybe more for you, not coming from this world, you don’t speak the same language?

Nick Hubert:

Do you want me to drop off the call so Taylor can be honest and he can give you the scoop and then he can jump off and I’ll give you the scoop?

Taylor Gentry:

Jason, we talk about that a lot, honestly. I think it is atypical for someone with my background to step into the wealth space maybe more so. And we leverage that because we have the ability to work with folks on how do you drive value in the company, how do you set the business up for a potential sale exit or transition internally? But this business, historically, we’ve talked about it as almost like two tracks. You have Taylor on the quote unquote business consulting or the business work track and you have Nick on a wealth management track. It’s really not the case. And really, the power is the ability for these two pieces to come together and there isn’t a conversation we have with clients where those two perspectives and backgrounds or contexts aren’t married into one to create really truly holistic advice.

And so Nick will probably tell you otherwise, but I haven’t seen an area yet where our two backgrounds has been a negative. It’s actually been immensely positive. And then on top of it, in terms of kind of building out the firm, Nick is more of a traction visionary and I’m more of the traction implementer. What’s amazing about it from our perspective is the partnership we have allows us to, A, recognize that, B, name it, and then C, leverage it in terms of being able to dole out duties and maximize our success together.

Jason Diamond:

Nick, anything you’d add?

Nick Hubert:

I think that’s all right. I mean, Jason, your question was from an operational perspective. I think a lot of Taylor’s view is from a client perspective, which is spot on that the overlap of that is really helpful for clients and I think what allows it to be a different experience for them. Internally, operationally, I think that where you could see friction there amongst partners with differences, and I think you do see that, and at the same time, Google was the one who did team research 15 years ago where they put out what you really want, is similarity and vision and differences in skillset when building a team. And so I think we’ve been intentional about that and it’s been really helpful for… Taylor and I functionally met in a quasi-professional setting back in 2011 and developed a friendship quickly, so we’ve got that deep level of friendship that underpins all of it. And same with Andrew and our time working together.

So part of it is there’s just such a strength of relationship amongst us that we give space for each other’s differences and look for those as assets as opposed to negatives, but in some sense, beauty in the eye of the beholder as is the case with anything.

Jason Diamond:

Yep. I appreciate you adding that context. I’ll be honest that when I first encountered your firm, my reaction was your core value prop of serving business owners is not all that differentiated. And then I learned more about the way in which you serve business owners. Can you talk about that? Because a lot of advisors in general, but then I think more specifically, a lot of RIAs would say, “We service primarily business owners.” Tell me how do you do it in a way that’s different and meaningful?

Nick Hubert:

I’ll take a first stab at that and then Taylor can maybe add on with specific stories. The wealth space is an awesome business and it’s a place where it’s very difficult to differentiate. And so we think a lot about that through the lens of how do we grow this business well for the long period of time to create opportunities for clients and employees. And so we spent a lot of time thinking about that, not only for the sake of differentiation, but also how do we actually just continue to add value to clients? Because if we add value in a different way, growth will take care of itself.

I’d say one way of cutting that is we revisit the mission is through this idea of, okay, if I want to be a partner along the journey, it’s about more than a single transaction, more than a single exit, whatever that might be, or a series of transactions as wealth is often created over a series of transactions. It’s this idea of how do we focus on wealth creation and driving business value as the engine of wealth creation for entrepreneurs and what we call personal significance, which is the life of the entrepreneur. And so there’s a next click down framing of our framework that we work through that lens.

I think the most important piece for us has been how do we build a business model that actually brings that to life and that’s the trick because we can say that, and if we basically still just operate out of an AUM-based or an asset advisory fee-based business, the reality is my incentive is still towards getting assets out of the entrepreneurial environment, so to speak, into a place that I can manage them, which may or may not be the best thing for the entrepreneur based on where they are at. And so our current work continues to be around how do we build that business model. So layering in different ways of engaging, whether it’s a retainer fee or some other way of engaging so we can start earlier when assets aren’t there and actually encourage the entrepreneur, “No, keep reinvesting in your business. It’s your highest rate of return right now and it’s where the investment needs to go.” I don’t want to have a conflict in giving that advice.

And so I think step two here has been building that business model from an actual engagement perspective to enable us to enact the vision. And then I think the third piece is how do we then build tools that are different than just evaluating pre-exit planning, and as is so often, the toolkit, but actually saying, okay, what are the value drivers of a business? And this is probably where Taylor has a lot more to add because it’s 101 of the PE model, but how do we take the mission and vision of an entrepreneur, what we call north stars, translate those into value drivers, ensure those tie to strategic initiatives in the business, ensure it ties to reporting, and ultimately, how capital is allocated between the business and other investments?

So then that’s our toolkit that we continue to build out to deploy the mission through our business model with tools that back it up. So that’s how we frame it right now. Taylor, we can share stories about how that’s come to fruition to create different outcomes.

Jason Diamond:

Taylor, I’d love to hear that. Let me just add maybe my understanding, because this is what helped me, I think, to really understand how you defer, and Nick and Taylor, correct me if I’m wrong, it sounds like the typical advisor thinks about an entrepreneur, a business owner relationship as the next liquidity event in most cases. And you take the viewpoint that it’s a journey, in some instances, 30 years in the making. It’s not even about liquidity event might come that’s beside the point. Is that a fair summary?

Taylor Gentry:

Yeah. We talk about it as a growing business is a healthy business, a business that is creating incremental value and adding to the multiple in terms of how the business is valued in the marketplace is a healthy business. And so whether you are going to sell that business or retain that business into perpetuity, let’s make a really valuable business and grow a very healthy business. And that’s what we do with clients.

Nick laid out the north star framework. And so how do we actually go about engaging with folks on a practical level? It does start with the north star framework. It’s got five steps to it as Nick outlined in terms of defining the north star, where we’re going, what we’re trying to do and that’s across those three pillars, personal significance, personal wealth and business value. And that personal significance has to be held at that same level. Otherwise, we find folks that are mid 50s, their business is crazy valuable, they’ve got a lot of dollars, but their family life isn’t where they want it to be because they didn’t take care of that along the way.

So we lay out a place map that says, “Hey, these are the north stars that we are aligning on and coming back to every month when we work with these owners.” We then push that into, okay, what are we trying to do on the business side of the equation? Let’s lay out what is going to drive the value of the business from a multiple and enterprise value perspective. We push that into a set of strategic initiatives that is tactical, who owns what, when’s it getting done, and are we red, yellow or green on it? We then build out the performance reporting package with folks. And so that is a monthly reporting package that says what happened last month and what operational data are we looking at to be able to improve the business month over month and get a good feedback loop going into the company. And then the last piece is around capital allocation that Nick mentioned where if the business generates a million dollars, where’s that capital going?

I think there’s a lot in there and it’s really deep, but if you zoom all the way back out, it’s take a private equity style playbook where private equity firms come and invest in a company. And what do they do after close? They put in place good financial reporting, good operational reporting, and then hold the team accountable to that reporting and those results on a monthly, quarterly, and annual basis. And so this is not rocket science or something that’s never been seen before. It’s just most business owners that have never experienced this private equity world don’t have access to it and don’t know how to go about doing it. It’s a relatively long process to get that installed with companies and with teams to really dig in and understand it, but it’s building out those packages to be able to say, “Okay, what happened last month? What changes do we need to make and what are we doing from a initiative perspective to drive the business forward?”

So to Nick’s point, it was previously, this was all about liquidity planning or from a wealth management perspective, it’s about the exit. This is about how do we make a more valuable business along the way, and that’s going to be good for the entrepreneur as they move through the journey.

Nick Hubert:

When we were around the dinner table, the proverbial dinner table creating the vision of this firm, it was around this idea of the silver tsunami and everything that everybody reads in the headlines of this massive wave of transition, this generational transition of business ownership that we could help facilitate. So we launched with that thesis in some sense.

In addition to this broader journey perspective, we have gotten to this place by following the market and listening to what entrepreneurs actually want through the big unlock was honestly in a deal process with one of our clients where we realized, “This is a great deal. This person’s going to put a ton of money in their pockets, secure their future,” and it’s completely the wrong outcome for the entrepreneur because it’s thinking all about the deal, not thinking about what this person didn’t want was an exit. They wanted a different relationship with their business, and that required, what do you actually want out of life, that personal significance piece? And it required, “Hey, if we can actually create a layer of team members and reporting that allows you to manage this like a board chair would do as opposed to a highly engaged CEO. That’s actually what you want. You don’t want out of this business. You want to still have this be a huge rock in your life.”

And so we’ve ran through that door, said no to the deal with them and have been building the infrastructure around this, and that was the unlock and aha moment for us. There’s something bigger here and that’s what then inspired, in some sense, the broader build out of the toolkit, but I think puts more meat on the bone of actually saying no to a deal, which is not the classic wealth manager outcome to get to a way better outcome for the client and is ultimately still an awesome client for us as a firm and somebody that we can go build with for the next 20 years.

I think just telling it through the lens of a story that’s different than what’s normal, so to speak, is a way to frame that up.

Jason Diamond:

It’s such a hyper focus on a fairly long-term and honestly nebulous potential outcome. You don’t have certainty. That, I think, is why most advisors would prefer the near-term liquidity. I mean, it’s not a secret, right? You can bill on assets, firms are incentivizing it and it’s a pretty direct recipe to net new asset growth, but it’s certainly a refreshing point of view. It resonates with me. I’m wondering if it’s resonated with clients and prospects. I guess what I’m asking is, do they feel that this is something different than the typical wealth management experience for this type of client?

Nick Hubert:

Yeah, Taylor, tell that story of the guy who said, “I’ve had this, but I felt alone.” I think that story of partnership, you tell pretty well.

Taylor Gentry:

Yeah. Jason, it was actually that same client, he had a investment banker, a wealth manager, attorney, and a CPA. CPA said, “The deal’s terrible, you shouldn’t do the deal.” Investment bankers obviously incentivized to do the deal. And so he’s saying, “You should do the deal.” That’s how he gets paid. He had a wealth manager who was silent and he had an attorney who just pushing paperwork.

Jason Diamond:

It’s like the start of a bad joke.

Taylor Gentry:

Yeah. No, seriously, it’s pretty remarkable. It’s like this guy did what he was supposed to do. He put the team of resources around himself. He got professionals in the seat. It’s that no one could connect the dots of all four of those people because they have the seat of those four people.

And so it’s really resonated because there’s an ability to see a bigger picture and connect these dots and say, “Okay, this investment banker is saying X because of A, B and C.” And the CPA is saying it’s a bad deal and that it’s not a market deal. It’s 100% a market deal. This deal is right down the fairway in terms of what the market should value your company at and they just don’t understand how the transaction mechanics should work. And so it’s worked really well from that perspective of being able to be the quarterback or centralized point or personal CFO for folks in understanding where interests lie and also being able to think about what they are pursuing in a bit of a different lens.

I think the second piece on that is where does it resonate for folks? I think that there is a gap in the marketplace that we are still working to close, and that gap is that business owners do not know what this monthly reporting package looks like. They do not know what really good reporting on their business looks like in terms of they have always run their… You’ve got a business owner. They’ve run their business for 10 or 20 years. They have a pulse on the business from their gut feel. That does not mean that the business has been optimized, is ready to go to the next level or is ready for a transaction and go through a transaction because they have not done the work on the backend to understand the moving pieces of the business at a granular level.

This recording package, we oftentimes get this confusion around, well, I’ve got a temporary CFO or a controller or X, Y, Z. That is very different than what we’re talking about. Well, that is all accounting, close the books, have clean numbers. What we’re talking about is how do I marry operational data in the business, number of units ships, number of jobs completed, time on job, operational data to the financials in the business so I can then go make adjustments operationally on how to improve the business and continue taking steps forward.

Jason Diamond:

It’s very clear. Nick, anything you’d want to add to that?

Nick Hubert:

I’d say it’s easy to still cut that from a deal lens and say, look, when an investment partner comes to evaluate a business to sit in their seat for a moment, they’re going to look at the replicability of what that leader has done without that leader still in the seat. And if so many businesses are still reliant on that person and this gets talked about as processes, reporting systems, that ultimately results in a discount to the value of the business because although it can be viewed… For the leader, it’s like, it’s that control thing that entrepreneurs deal with. It’s what made them good. It’s what got you there. And so that transition is really hard. And that’s important from a deal lens because that does a direct impact to value.

And to widen out the scope beyond the deal and to think about the entrepreneur’s life, this goes back to the dynamic that a lot of times entrepreneurs look for the exits because they’ve built something that it’s now owning them and what they’ve built is not resulting in the life that they want. And so how can we use this system to actually change that relationship, as I mentioned earlier, with the business so that they can run it more like an executive might and get out of the knife fight, so to speak, that often is how this can feel for a lot of folks, even for pretty large businesses. It can just feel like you’re a firefighter, you’re in a knife fight, whatever you want to use for that terminology. I think it’s as much about creating a different life outcome and different relationship and owning and leading a business as it is in driving deal value.

Jason Diamond:

Taylor, maybe I’ll ask this of you. Forgive the question, but private equity, I think in our space, has a little bit of a negative stigma at the moment. I don’t think that’s true across the board. I think people appreciate generally the need for capital and there are certainly benefits of private equity. But I’ll say as a whole, advisors are, let’s say, suspicious of private equity. You ever get that pushback? Does anybody ever view your experience or the way you position the story as a negative?

Taylor Gentry:

I think most people that we talk to don’t know what private equity is. They may have seen it in the headlines. They may have some sort of connotation around it. They won’t come out and say that they don’t like it. They don’t know why they don’t like it. The average American business owner, they don’t know what it is or what it means. So yes, you do have to fight that because of the headline piece around private equity, bad actor ABC, and that’s what gets the headlines.

I think what private equity is really good at is taking a business that is not optimized or not running on systems and processes that it can run on. Again, it’s not rocket science is not crazy hard. It’s just the private equity world has created ways to install systems and process that improve the value of the business by way of providing visibility to financials and operations in a way that the owner previously didn’t have.

And so for us, we view it not by any means as the end all be all or the answer. There are clients we’ve worked with that have taken private equity capital and grown successfully, executed on some acquisitions and then exited again. There are clients that have evaluated those transactions and said, “Hey, not for me.” We are actually fairly agnostic to it. What we really spend a lot of our time on is what are we solving for? What’s the end game? How do we use this private equity transaction to get to where we’re trying to go and is it what we want at the end of the day? Because the reality is, if you’re going to stay on and run that business with private equity investment in, there’s a higher expectation on what you need to do Monday morning than when you owned it yourself and it was a little bit of your personal piggy bank too.

Jason Diamond:

I love it because you bring it back to the north star concept.

Taylor Gentry:

Yes, that’s exactly right. It’s what are we solving for and what game are we playing to be able to get to where we ultimately want to go? And for, as Nick mentioned that client that turned down the deal, it was a private equity investment. We got very clear with that, “Hey, here are going to be the expectations. You will have a monthly financial reporting call. You’re going to have quarterly board meetings.” These are things that need to happen in this business to be able to upgrade the management and cadence in this company. You don’t have to do it all tomorrow, but that is how you make a more valuable company, is installing some of these systems, process and cadence. And so we’re working with him now on doing that, just in a private context instead of in the private equity backed environment.

Nick Hubert:

I think there are three things embedded in this. I’d say number one, to Taylor’s point, this is a massive black box, in some ways by design. Wall Street’s had not a great reputation for a very long time of putting things behind the paywall, so to speak. And so we think a lot about our job as empowerment and education.

Jason Diamond:

Education, yep.

Nick Hubert:

Yeah. And so part of it is just, number one, how do we just demystify this thing and name things and take away the go to or bad? Because it can be that, but it should not be that from a core basis. That’s number one.

Number two, a lot of entrepreneurs feel like they cannot get access to this ability to professionalize or level up or whatever these things are without bringing on that investment partner. And so part of our motivation is how do we actually bring this skillset in without needing to bring on an investment partner because oftentimes, that investment partner comes when you’re done, and so you don’t actually get to experience it. That’s number two.

Number three is, Jason, part of your point earlier was like there’s still a trap here of potentially being able to get motivated primarily by the exit. And so again, that gets back to our business model, making sure our price Racing is right, all that good stuff. And it’s also the reality that a lot of businesses, if you just look at a very broad scope of American businesses, a lot of them don’t have value in the marketplace in a massively material way and/or won’t exit in a traditional way. And so the wealth creation journey then becomes much more of a conversation of, how do we manage the balance between investing in the company and distributing out of the company to invest elsewhere because we should actually be creating investment assets along the way because when you get to the exit, there’s no better power position at the moment of exit than already having financial security to some degree and giving you choice in the right deal, not the highest and best deal because you need to fill the piggy bank for retirement.

Jason Diamond:

I just want to be sure to ask because you did mention a couple times your pricing structure. How have you set it up so that you can be more agnostic about this as opposed to the typical… You want to talk about it for a minute?

Nick Hubert:

As it’s structured now, it starts with a retainer earlier on where we are working… As Taylor mentioned, we are going deep in the operational build of the business. We will do that on a monthly retainer. We’re engaging consistently. As assets get built up and if assets get built up, we start to chew that retainer down as assets go up. I think what we are ideally trying to figure out, and still honestly have not figured out yet, is how do we get to parity so that we don’t create an… I want to be able to work agnostically with a client to say-

Jason Diamond:

Yeah, I love it.

Nick Hubert:

… regardless of how I’m engaging with you, that’s the goal. So I’d say we haven’t cracked the code on exactly what that is yet, but mechanically, we’ve got the levers to pull to say how we price and move that retainer down is basically allowing to keep it at par, so to speak, for the client and allowing us to say, “I’m here to engage in making the best wealth creation outcome for you along the way, whether that’s investing in the business or investing outside the business.”

Jason Diamond:

I think that’s the right recipe. I agree. The levers can be fine-tuned, but to me, that’s the model you want to create where you can credibly look your prospects and clients in the eyes and tell them, “Our job is to serve you in the best way… We’re sitting on the same side of the table as you.”

I want to turn this inward for a second. The home cooking concept. M&A, within the RIA independent space, is obviously a hot topic. Have you thought about it? Do you think it’s a critical part of a potential growth trajectory of a healthy, independent firm? I’m curious your perspective. I feel you, Taylor in particular, probably have a unique lens on this coming from the world you came from.

Taylor Gentry:

Yeah, Jason, I think if Nick and I wanted to put as much money as we possibly could in our pockets as fast as humanly possible. It’s a pretty easy recipe. It’s go get some private equity capital backer, roll up a few RIAs, get to a few billion of AUM and then sell it to the next private equity firm or roll it to the next private equity firm, do that a few times. We’d all make plenty of money and go on our way.

We’ve been really intentional on this front, and again, I talk about this is what we want to do for the next 30 plus years. And really being intentional around building a business that has that enduring nature to it, decided to take private equity capital on, you are on a shot clock to some degree. Yes, you’re trying to build a best business, all of those pieces. You get cadence. You get capital. There’s a ton of value there, but you are on a shot clock that is not a shot clock we’re trying to get on at this stage.

I’d say we opportunistically are looking at acquisitions. So we think about it, and Nick and I talk about it all the time, how much of our time should we be spending on acquisitions? And we think of it as 80/20 or even 90/10, 80% or 90% organic growth-focused, 10 to 20% acquisitions-focused. And so we’re actively evaluating those consistently and see deals on a monthly basis that we look at and evaluate, but it’s less of the focus today than it could be down the road.

Jason Diamond:

And Nick, do you think of that when you guys talk? Do you guys call that your true north? Do you think the same way you coach your clients and prospects to say, “For right now, it wouldn’t be the right move for us to take private equity capital and to do this acquisition rollup strategy because A, B and C are more important for us”?

Nick Hubert:

Yes. I think if we take our life north star for Taylor. I’m speaking for Taylor, but we’re close and so we share this of… To Taylor’s point, the life outcome of scaling that quickly with that type of capital backing is likely to create a life that I don’t actually want that’s not good for me, not good for my family, and honestly, not good for our clients at this point. And so that overrides in this case, even though the wealth, north star might say, “Hey, absolutely do that.” At some point something has to win. And so that is true.

At the business side, as the north star is motivated by this mission of the entire entrepreneur journey, the worst thing I could do is shortcut my ability to be on that journey for a long period of time. One of our friends in this space says, “The best thing I can do for my clients is still be in the seat 30 years from now because I’ve lived a good life that enables that.” And I think that’s spot on for us, is everything, it’s so easy in today’s world to be consumed by short-termism and we are intentional in ensuring that we don’t succumb to that. While still recognizing to your point, I mean, you’re in this all day, Jason, right? There’s a massive opportunity in front of us to be thoughtful about how acquisitions fit into this. And I think we want to be open to that in a way that ensures we just don’t lose the core of the goodness of what we’re trying to build.

Jason Diamond:

I think that’s the right answer. The only wrong answer in my mind is we’re not open to this or we’re closed to it. To not at least be opportunistically aware of the dynamics in the market, I think is naive. But also, I’ll be honest, Nick, when I think about the concept of the north star, I have a hard time imagining, because we use a similar concept when we counsel advisors. What is your true north or your north star and your best business life, whatever you want to call it? To me, it does include absolutely the personal piece. I think it’s hard to define it only on the economic verticals because, I mean, I think about this for a transitioning advisor. Almost never is the conversation about crunch the spreadsheet and get us the biggest check possible. It’s, yeah, sure, transition capital is important, but it’s let’s also, we want a better work life and we want freedom to market and blah, blah, blah. To me, I think it’s a completely fair way. You two are looking at it at least for now and I assume you reserve the right to revise that opinion down the line.

Nick Hubert:

I think acquiring for size and scale is as often the headline is, yeah, we’re not into that at this point because I think… And yet, hey, if the right acquisition with the right people came along in that, we’d be extremely excited and would move very quickly to execute on that. So it’s a little bit of a both hand.

Taylor Gentry:

Yeah. Jason, I think it goes without saying, but my background on having done a bunch of transactions of businesses like this, it’s a natural fit for us to have this as a lever. And so we are looking at deals. We just haven’t prioritized it as the top priority.

Jason Diamond:

I think also where you are, 2024 was the launch of the business. It’s pretty common to see, all right, let’s nail this, let’s get our feet under us, client service model and then we’ll start to think about that down the line.

A couple other things I want to ask you about running an independent firm. This is a pretty glowingly positive review, I think, of your ability to service clients, your ability to grow and to build and run the business that you want. Has there been anything negative that you haven’t enjoyed about running and operating this business, other than working with each other, of course?

Nick Hubert:

No, I was going to say, I’m like, can we get Taylor off the call again?

Taylor Gentry:

Jason, maybe I’ll take a first cut at it. I think for both Nick and I, it’s just the administrative components of running an independent business that we don’t enjoy candidly. I don’t think many people would. That said, you come full circle and it is a pretty glowingly positive review of running an independent business because we get to run it in the way that we see fit. And oh, by the way, we use the same things that we use with our clients. So the value drivers we’ve talked about, we have a value drivers worksheet. We refresh it every six months. Nick, Andrew, and I get together every six months and we’re 18 months into this thing and we’ve already got this cadence and system to it, if you will. So I personally really enjoy the running the business piece of it from a macro perspective. Yeah, I’m responsible for running our fee billing and running the math on all that and getting that done, for example.

Jason Diamond:

I think that’s actually a very thoughtful answer. And I appreciate you saying I enjoy running… I feel the same way, by the way. There’s some elements of running a business that I think are immensely fun. I think it gets painted with this brush of, “Ugh, running the business is the hassle and I want to work in the business.” Agreed, nobody likes invoicing and accounts receivable for the most part, but Nick, what are your thoughts on this?

Nick Hubert:

Yeah, I think mine is different a little bit coming from a different background where it’s easier for me to sit with the rose-colored glasses of the joy of the freedom that we have in this model. At the same time, when I’m counseling folks who are talking with folks or mentoring folks, younger people who are thinking about, “Okay, I want to go start my own thing,” I’m like, “Hey, it’s like I’m the same way. I want to look in the mirror and think I’m the boss or I’m one of the bosses and we get to go build this.”

Then the reality is, at the end of the day, if …

Michael Lee & Steve Armaly—Founders & Managing Partners, Ox Road Capital

After leaving UBS to launch Ox Road Capital, Michael Lee, Steve Armaly, and their partners crossed $1B in AUM in just 225 days. They share how years of client trust, partner alignment, and a client-first vision helped make an extraordinary transition possible.

In Summary

When Michael Lee, Steve Armaly, and their partners left UBS to launch Ox Road Capital, they walked out the door without client information or a single dollar in assets at their new firm.

Just 225 days later, Ox Road crossed $1B in AUM.

But that extraordinary result was years in the making.

Mike and Steve join Mindy to share the story behind the transition: why a highly successful $1.2B UBS team decided its vision had outgrown the employee model, how four partners worked through very different perspectives to reach alignment, and why they ultimately chose independence over the significant recruiting economics available elsewhere.

They also discuss the realities of leaving a non-Protocol firm, how clients responded, and why years spent building trusted relationships became one of their most valuable assets during the transition.

Today, with approximately $1.1B in AUM, a 93% retention rate, six additional team members, and a growing new-business pipeline, Ox Road is beginning to realize the larger vision behind the move: greater control over resources, technology, marketing, staffing, and the client experience.

The Storyline

For Mike, the idea of independence dates back to 2009. The entrepreneurial instinct was there, but the infrastructure, economics, and timing weren’t. He joined UBS instead and, over the next 16 years, helped build an extraordinarily successful business.

Steve had a similar entrepreneurial streak. Together with partners Brian Blackburn and Jeff Allen, they built an integrated team around financial planning, client service, and portfolio management—and a belief that people perform best when they can “soar with their strengths.”

Success, however, eventually created a different question: Could the business they wanted to build continue to thrive within the structure of a traditional firm?

Their answer did not come quickly or unanimously.

The four partners spent roughly a year working toward alignment, at one point turning to an outside counselor to help them navigate differences that threatened a partnership they considered more important than any particular firm or business model.

Once aligned, their priority became clear: Any move had to make things better for clients first.

With Diamond Consultants helping them understand a rapidly evolving landscape and evaluate the range of available options, the team ultimately chose to build Ox Road Capital through LPL Strategic Wealth Services.

Then came the real test.

Leaving non-Protocol UBS meant walking out without client information and trusting that years of doing right by clients would matter. The response offered a powerful answer: Ox Road crossed $1B in AUM just 225 days later.

The story is ultimately less about how quickly $1B moved than about everything that happened before it could: years of service, transparency, partnership, and trust.

Topics Covered

• Why Mike first considered independence in 2009—and why the timing wasn’t right
• The meaning behind the Ox Road name and its connection to humility, service, sacrifice, hard work, and teamwork
• How four partners built an integrated team around complementary strengths
• Why partner alignment became one of the hardest parts of the decision
• When their successful UBS practice began to outgrow the employee model
• Why serving clients better became the team’s “true north”
• The economics of choosing long-term ownership over a large recruiting package
• How the independence landscape has evolved for billion-dollar wirehouse teams
• Diamond Consultants’ role in helping the team understand and narrow the opportunity set
• The risks and realities of leaving a non-Protocol firm
• How years of client trust contributed to a 93% retention rate
• Why they selected LPL Strategic Wealth Services
• How greater control is changing staffing, technology, marketing, and the client experience
• Ox Road’s plans for organic growth and M&A

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Why four successful partners weren’t immediately aligned around independence. (12:09)
Mike and Steve describe their unusually close partnership, why they make major decisions unanimously, and what happened when the prospect of leaving UBS exposed differences they had never confronted before.

When a successful wirehouse practice can begin to outgrow its environment. (17:11)
They explain how a desire to build an enduring enterprise, mentor the next generation, and invest more heavily in white-glove service created growing friction with the limitations of the employee model.

Why the client had to come first in any decision to move. (26:25)
Steve explains the principle that ultimately aligned the partners: A move could improve their own lives, but it first had to create a better experience for their clients.

How they evaluated independence—and the economics they were willing to leave behind. (27:49)
The partners discuss the financial and personal considerations behind choosing ownership for the long term rather than pursuing a significant recruiting package.

What it means to leave a non-Protocol firm with nothing. (32:19)
Mike and Steve describe the legal guidance, uncertainty, and leap of faith involved in leaving UBS without client information—and why clarity around their decision helped them manage the risk.

How years of client trust helped move $1B in 225 days. (33:32)
The team started Ox Road with zero AUM. Mike and Steve explain how clients responded, why there was no elaborate “pitch,” and how years of comprehensive planning, transparency, and service created goodwill long before the transition.

What independence has allowed them to change. (39:20)
From building their own technology stack to redirecting resources, expanding marketing, and adding staff, Mike and Steve share how greater control is allowing them to “level up” the client experience.

Why they chose LPL Strategic Wealth Services. (42:15)
Mike explains why the partners wanted control over the P&L, staffing, branding, marketing, and resource allocation while relying on LPL for areas such as cybersecurity and compliance.

What’s next for Ox Road Capital. (45:51)
With the first-year transition behind them, the partners are turning toward the next phase of the enterprise, including continued organic growth and potential M&A.

The advice they’d give advisors who are afraid to make a change. (46:45)
Steve returns to the principle at the heart of their story: Honor the client-advisor relationship, understand why you’re considering change, surround yourself with trusted counsel, and don’t underestimate the value of relationships built through years of serving clients well.

Key Takeaways

Trust is built long before it is tested. Ox Road’s $1B transition didn’t happen in 225 days. In many ways, it took decades. Mike and Steve attribute the outcome to years of comprehensive planning, consistent communication, transparency, and putting clients first. When the team announced its departure, clients already understood who their advisors were and how they made decisions.

Partner alignment deserves as much attention as firm selection. For a multi-partner team, determining where to go may be easier than agreeing on whether to go. Ox Road’s four partners spent roughly a year working through different risk tolerances, life circumstances, and priorities before reaching unanimity. Protecting the partnership remained their highest priority throughout the process.

The independence opportunity set has changed dramatically. Mike first considered independence in 2009 but concluded that the operational and financial hurdles were too great. Years later, the team discovered not only that the ecosystem had matured, but that the range of models and support structures had evolved substantially even within the previous five years.

Ownership was about control, not simply economics. The team could have pursued a significant recruiting package elsewhere. Instead, they wanted the ability to decide how revenue would be reinvested into people, technology, marketing, and client service—and to build an enterprise designed to outlive its founders.

Independence doesn’t have to mean doing everything yourself. Ox Road wanted control over the areas it considered essential while avoiding responsibility for functions such as cybersecurity and compliance. LPL Strategic Wealth Services offered a model that allowed the partners to own and operate their business while leveraging outside scale and infrastructure.

https://youtu.be/uMAB3lYqPo8

Quotable Moments

On partnership:
“Our arms are locked together as four partners.”

On what ultimately mattered most:
“Everything had to point to it being better for the client.”

On making a non-Protocol move:
“It was a leap of faith to do that because you literally have to walk out with nothing. And we did.”

On the difficulty of transition:
“Nothing good is easy and transitioning isn’t easy, but it is certainly worth it.”

On the foundation for a successful transition:
“So much of the hard work is just in how you’ve been running your business that allows you to transition well.”

On client loyalty:
“It truly is the relationship between the client and the advisor.”

On what clients did after the move:
“They’ve rallied around us where we have always rallied around them.”

On ownership and control:
“The ability to control the P&L, the hiring and firing, the allocation of resources, the marketing, the branding—all of the things that were of paramount importance to us—we can do.”

On the next chapter:
“We have a responsibility to be difference makers.”

FAQs

Why did the Ox Road Capital team leave UBS?

The partners believed the business they wanted to build was becoming increasingly difficult to operate within a traditional employee model. They wanted greater control over staffing, technology, marketing, resource allocation, and the client experience while building an enduring enterprise they could own.

How much did Ox Road Capital manage when it left UBS?

The team managed approximately $1.2B at UBS. After launching Ox Road Capital, it crossed $1B in AUM 225 days later and reported approximately $1.1B in AUM at the time of the interview.

How did Ox Road Capital move $1B after leaving a non-Protocol firm?

Because UBS is not part of the Broker Protocol, the advisors left without taking client information and followed legal counsel regarding what they could and could not do. Mike and Steve credit years of comprehensive planning, transparency, consistent service, and trusted client relationships with helping clients make their own decisions about following the team.

What was Ox Road Capital’s client retention rate after leaving UBS?

Steve says the firm estimates it retained approximately 93% of existing clients and assets. He also says the firm’s pipeline for prospective new clients has never been larger.

Why did the team choose independence instead of another wirehouse?

Although a team of its size could have pursued substantial recruiting economics at another traditional firm, the partners were focused on long-term ownership and control. They wanted greater freedom to determine how resources were invested and how the enterprise would evolve.

Why did Ox Road Capital choose LPL Strategic Wealth Services?

The partners wanted control over their P&L, staffing, resource allocation, marketing, and branding without taking on every operational responsibility themselves. They specifically cite cybersecurity and compliance as areas where they wanted the resources and scale of a larger partner.

How did four partners get aligned around such a significant decision?

Not quickly—and not without some difficulty. The partners spent roughly a year working through their different perspectives and even engaged an outside counselor for a two-day session. Their commitment to keeping the partnership together ultimately provided the foundation for reaching a unanimous decision.

What does the name Ox Road Capital mean?

The ox represents qualities the partners aspire to embody, including humility, service, sacrifice, hard work, strength, and teamwork. “Road” reflects their view of life and business as a journey in which their paths intersect with those of clients, team members, and others along the way.

What is next for Ox Road Capital?

With the transition largely behind them, the partners are focused on growing the enterprise. Mike says that includes continued organic growth as well as potential mergers and acquisitions, guided by their belief that the firm has a responsibility to be a “difference maker.”

The partners believed the business they wanted to build was becoming increasingly difficult to operate within a traditional employee model. They wanted greater control over staffing, technology, marketing, resource allocation, and the client experience while building an enduring enterprise they could own.

The team managed approximately $1.2B at UBS. After launching Ox Road Capital, it crossed $1B in AUM 225 days later and reported approximately $1.1B in AUM at the time of the interview.

Because UBS is not part of the Broker Protocol, the advisors left without taking client information and followed legal counsel regarding what they could and could not do. Mike and Steve credit years of comprehensive planning, transparency, consistent service, and trusted client relationships with helping clients make their own decisions about following the team.

Steve says the firm estimates it retained approximately 93% of existing clients and assets. He also says the firm’s pipeline for prospective new clients has never been larger.

Although a team of its size could have pursued substantial recruiting economics at another traditional firm, the partners were focused on long-term ownership and control. They wanted greater freedom to determine how resources were invested and how the enterprise would evolve.

The partners wanted control over their P&L, staffing, resource allocation, marketing, and branding without taking on every operational responsibility themselves. They specifically cite cybersecurity and compliance as areas where they wanted the resources and scale of a larger partner.

Not quickly—and not without some difficulty. The partners spent roughly a year working through their different perspectives and even engaged an outside counselor for a two-day session. Their commitment to keeping the partnership together ultimately provided the foundation for reaching a unanimous decision.

The ox represents qualities the partners aspire to embody, including humility, service, sacrifice, hard work, strength, and teamwork. “Road” reflects their view of life and business as a journey in which their paths intersect with those of clients, team members, and others along the way.

With the transition largely behind them, the partners are focused on growing the enterprise. Mike says that includes continued organic growth as well as potential mergers and acquisitions, guided by their belief that the firm has a responsibility to be a “difference maker.”

Related Resources

Diamond Consultants Financial Advisor Transition Report –Wirehouse Edition: H1 2026
A data-driven look at advisor movement across Merrill, Morgan Stanley, UBS, and Wells Fargo—and what it reveals about the evolving wealth management landscape.

Michael S. Lee, CEPA®
Founder, Managing Partner

Mike has more than 24 years of experience in financial services, focusing on high-net-worth and ultra-high-net-worth individuals, families, and private foundations. He applies sophisticated wealth management techniques to financial planning, trust and estate planning, philanthropic services, concentrated stock management, and tax mitigation strategies. Prior employers include UBS, JPMorgan Chase, and Comerica Bank.

Mike is also nationally recognized for his knowledge and perspective on investments, being quoted in The Wall Street Journal, The Palm Beach Post, The Sun Sentinel, Palm Beach Illustrated Magazine, and The Greenville Business Magazine. He has also shared investment insights on a number of radio and TV shows, including an 11-year stint co-hosting “Wealth and Wisdom,” a TV show on PBS (WXEL South Florida) focused on educating the community.

Graduating cum laude from Palm Beach Atlantic University with a B.S. in Business Administration and a concentration in Finance, Mike is also a graduate of the Florida Bankers Association’s 3-year Florida Trust School. He is a Certified Exit Planning Advisor (CEPA®) and holds Series 7, 9, 24, and 66 registrations through LPL Financial.

Mike moved to Greenville, SC in 2009 with his wife, Stacey, and daughter, Brooke. He’s a former Trustee of Palm Beach Atlantic University, a Director of the Albert E. and Birdie W. Einstein Fund, former Trustee for the Governor’s School of the Arts Foundation Board, former board member for Impact Sports International, and a graduate of Leadership Greenville Class 38.

Steve N. Armaly
Founder, Managing Partner

With over 20 years of experience serving clients, Steve oversees all new relationships and financial planning for the team. Fueled by a passion for both analytics and helping people, his prior roles include Senior Vice President and Wealth Advisor at UBS, management consultant at PricewaterhouseCoopers, and financial analyst with Fluor Corporation.

Steve graduated from The Citadel in Charleston, SC with a B.S. in Accounting and Business, and has completed more than 150 hours of advanced training in investments, liabilities, insurance, executive compensation, protection strategies, qualified retirement plan and individual retirement account distributions, business succession planning, gifting to children and descendants, charitable gifting, and distribution of wealth at death. He holds Series 7 AND 66 registrations through LPL Financial, as well as life, health, and long-term care insurance licenses.

A resident of Greenville, SC, Steve is an avid outdoorsman who loves all the accessible nature in his home state. He’s also a youth football and basketball coach, board member for local schools, and attends Saint Mary’s Catholic Church. Steve and his wife, Kristen, have four children: Thomas, Elizabeth, Lauren, and Matthew.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

The Trust Behind the Transition: UBS Breakaways on What It Takes to Move $1B in a Matter of Months

A conversation with Mindy Diamond and Michael Lee and Steve Armaly, Founders and Managing Partners at Ox Road Capital.

Mindy Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is, The Trust Behind the Transition: UBS Breakaways on What It Takes to Move $1B in a Matter of Months. It’s a conversation with Michael Lee and Steve Armaly, founders and managing partners of Ox Road Capital. I’m Mindy Diamond, and this is the Diamond Podcast for Financial Advisors.

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transition. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions, to download your copy at diamond-consultants.com/transitionreport.

Trust is at the center of every advisor-client relationship, but it’s one thing to believe your clients trust you and another to make a move that puts that belief to the test. That was certainly true for my guest today, Michael Lee and Steve Armaly, founders and managing partners of Ox Road Capital. Along with their partners, Brian Blackburn and Jeff Allen, Mike and Steve had built an extraordinarily successful $1.2 billion business at UBS. Yet over time, they came to believe that the business they wanted to build and the level of white glove service they wanted to provide required greater control over how they invested in their team, technology and client experience.

But getting four partners aligned around a move of this magnitude wasn’t easy. Neither was leaving a non-protocol firm walking out the door without client information and trusting that the relationships they had spent years building were strong enough to follow. We had the privilege of helping Mike, Steve, and their partners evaluate their options and ultimately launch Ox Road Capital through LPL Strategic Wealth Services. And what happened next speaks to volumes. They crossed the billion dollar mark just 225 days after leaving UBS. Yet what makes their story worth hearing isn’t simply the number. It’s the thoughtfulness behind the decision, the work it took to get four partners aligned, the choice to prioritize long-term ownership over immediate economics, and the conviction that creating a better business could ultimately make their clients’ lives and their own lives better. And perhaps most of all, it’s what they learned about trusting the relationships they had built long before they ever decided to make a move.

So if you’ve ever wondered what it really takes to get multiple partners aligned, how to weigh the risks of a non-protocol transition, or whether the relationships you’ve built with clients are strong enough to withstand a move, Mike and Steve offer an unusually candid look at what those questions feel like before, during, and after a breakaway and what they know now that they’re on the other side. So let’s get to it.

Mike and Steve, I am so excited you’re here. It feels especially good to have the privilege of interviewing people that we had the privilege of helping to get here. So welcome.

Steve Armaly:

Thank you. We’re excited to be here.

Michael Lee:

Very.

Mindy Diamond:

Terrific. Okay, so let’s start at the beginning obviously, and I’d love to hear just briefly a little bit about your stories. How’d you get here?

Michael Lee:

I guess the move to independence for me really started back in my mind back before joining UBS in 2009. It was a dream that was planted, kind of went through a life change halftime as it were in career, wanted to slow things down a little bit. So my wife and I actually relocated from South Florida down in Palm Beach County to Greenville back in 2009, left JP Morgan and joined UBS. So basically that idea was formed back then, but just it was wrong time.

Mindy Diamond:

I’m going to want to unpack that a little more later. Let’s put a pin in that because I love what you just said. That is true of many people. But Steve, let’s hear from you.

Steve Armaly:

Yes. I made an industry change in 2004, worked in consulting as a management consultant and as a financial analyst upon graduating from the Citadel and always had an entrepreneurial spirit, I grew up in an entrepreneurial family. But my first day at work as an advisor, I knew I was in the right place. I knew I was doing what I was called to do. It felt so different, never felt like work. But ultimately, I think even at the beginning of my career, I had this desire to one day have my own practice or have a practice that I could be a part of as a team where we would have ownership and more control. So I feel like it was in my blood from the very beginning, but it did take us a while to get there.

Mindy Diamond:

That’s okay. And again, we’ll unpack that a little more later, but thank you. So I want to give our listeners some perspective. A year ago, you guys left UBS, would love for you to tell us how long you were at UBS, but want to hear a little bit about the size of the business, how many employees you have, the kind of clients you serve. And I don’t know, Mike and Steve, if you want to alternate on that, that’s great.

Michael Lee:

So I’ve been in the business about 36 years. Steve just mentioned when he made the career change. Jeff, one of our partners, has been in financial services for over 25 years. And Brian, the same thing. So all of us have been around for a bit for sure. We left UBS, we had a team of about 11, and since we came over and formed Ox Road, we’ve hired six more folks. So we manage about 1.1 billion is where we are today. We were at 1.2 back before we left the UBS.

Mindy Diamond:

Got it. Talk to us about the unusual name Ox Road. I’m always fascinated. I like to ask that, particularly when a name is a little less mainstream. Where’d it come from? How’d you come up with it?

Michael Lee:

Yeah, so it evolved over a period of time. So we used to be known as the Alpha Group. So when in our earliest stages, there were four partners. I’ll let Steve and Jeff argue over whose last name was first, but it was started out as the ALFA Group, A-L-F-A. It was Allen, Lee, there was another gentleman that was a partner of ours, he’s since passed away, his last name was Fort and then Armaly. Or since Steve’s on the call, we’ll say it was Armaly, Lee, Fort, and Allen and give him props. But that’s where it started. And then a few years later we merged with Brian Blackburn, one of our partners, and then there was a retiring FA that was on his team and we rebranded to ALPHA, A-L-P-H-A. Well, totally unrelated to the move.

One morning I was having a quiet time and I was reading in Proverbs, Proverbs 14:4, it says, “Where there are no oxen, the manger is clean, but much revenue comes from the strength of an ox.” Well, that’s interesting. What do I do with that? This was written down for extended generations, but I don’t know how to apply it. So that took me down a path of researching the ox. And it turns out the ox appears all throughout the Bible. It was used for sacrifice. It was a beast of burden, worked in teams. So there was this whole idea of an ox and wherever it showed up, it was humility, it was service, it was sacrifice, it was hard work. So all very admirable attributes. So then when I reread that verse and I said, okay, well, where there’s no teamwork, there’s no prosperity, where there’s no hard work, where there’s no sacrifice. So when I read it in terms of what it symbolized or the essence of an ox, then that was attractive to me.

So put a pin in that a couple years later, another quiet time I’m reading, in Psalm 1:19, it’s basically an acrostic with the Hebrew alphabet. So each section of that psalm has a letter associated with it. Well, the first letter is Olive, the Hebrew letter A, which also is symbolically tied to the number one. And it’s also, interestingly enough, to the head of an ox. That was the symbol or the emoji for it. So there was this idea that alpha or olive was tied to the head of an ox. So that’s what started the idea of the ox. So then thinking about the journey, we’re on a journey through life. We’re kind of just passing through and our lives intersect with our clients’ lives, with our team members’ lives, with vendors. And we don’t know how long people are going to be in our lives. Sometimes they drop in for just a little bit and sometimes they’re there for an extended period of time, but we’re all kind of on this road. So this idea of Ox Road came.

So it was a nod to the past. There was a direct connection to our old name, Alpha, through the symbol of the ox head, but then there was also this idea of a journey that we were moving forward. So it was a nod to our past, but a clear focus on who we were, those attributes that we all aspire to of hard work and sacrifice and the strength and commitment and humility. That was who we were, but then there was also we’re going on a journey and we have absolutely no idea how big this thing’s going to get. So, there you go.

Mindy Diamond:

Thank you for sharing that and I love how thoughtful it was. A lot of people really struggle with, oh my God, we just have to come up with something creative, but that’s thoughtful and beautiful and thank you for sharing it.

Michael Lee:

Yeah.

Mindy Diamond:

So let me ask, you mentioned bringing two teams together, and I know you’ve got partners, Jeff Allen and Brian Blackburn. So you’re running a big team. How do you divide responsibilities? How does that work?

Steve Armaly:

Well, early on, Mindy, we believed in the concept of giftedness and ideally we’re all created in a unique way by God and we all have some inherent skills that are just our natural abilities. And we also believe that when you spend time in those natural abilities, you’re energized, you’re refreshed, it motivates you, it meets your needs in a way, much like our conversation earlier today with how you guys feel about what you do in helping people find their home. That’s what really motivates us. And when we looked at our business, we felt like there’s three distinct areas of expertise that you need to provide comprehensive wealth management. And those three areas are financial planning, client service, and portfolio management.

And what we wanted to do was design a team where you could spend 80% of your skills in that area that you felt you were gifted within one of those three silos and then spend 20% in the others. And it was the idea of soar with your strengths and manage or lean on your teammates to help you better in the areas where you felt you were weak or just felt like you didn’t have that natural skill set in. And so ultimately from starting with the partners, we aligned ourselves within those three pillars and then we built our staff model to fit within those three pillars also.

Mindy Diamond:

So one of the things that trips a lot of multi-partner teams is that not everybody has the same goals at the same time. So were all four partners aligned as to the desire to be independent at the same time?

Michael Lee:

Yeah, that was actually an interesting part of our story is while there was a desire to go independent, from a timing standpoint, I don’t know that… Actually we weren’t all on the same page for a period of about a year, but we got there and that’s a story in and of itself. So Steve, I don’t know if you want to add anything to that or not, but we could do a whole podcast just on that piece.

Steve Armaly:

We really could, Mindy. Well, I’d love to start by saying as a partnership, we truly looked at partnering, and I hate to use the cliche, but the magnitude of making a decision to have a partner for life as in marriage. And we looked at partnering as a process that you would go through courtship where you really got to know each other, your goals, your objectives, your moral compass, and making sure it all aligns. So we felt very unified. We always use the words, our arms are locked together as four partners. We make our decisions in unison. If we can’t get to an answer where we all are on the same page, we pause, we wait, and we continue to contemplate.

But I say all of that to enlighten and maybe let you know how much of a challenge it was with the idea of leaving our past firm. And ultimately, I think as Mike said, we had the desire to do it. We had even discussed it, but we knew there was a time and place for that. We had that sort of on the back shelf. Our focus was to design and build the best team we could. And I think we were very focused on that. But when the time came to consider making the move, we did encounter for the first time that we weren’t completely aligned and it scared us. It was the first time ever that we really were in disagreement, the first time that we had some anxiety about the partnership and who was doing what and how this all was going to work.

And thankfully during that time, one of our partners, Jeff, was astute enough to say, “Guys, we clearly are not aligned and we’ve got to get realigned.” And we trusted a partner that we’d met over the years who works in counseling to sit with us. And we basically went through a two-day session to get realigned. And in that timeframe, that’s exactly where we landed, but it was not pretty. And there were certainly some moments where I think we all questioned how could something as good as our team be at risk of ceasing.

Michael Lee:

One thing I wanted to add that was funny that I think we have to draw a light too. So the guy who was the counselor was actually a marriage counselor that we went to see.

Mindy Diamond:

I love it. That makes sense.

Michael Lee:

And we sat down with him and he’s like, “All right, guys, this is a little bit out of my wheelhouse. I’ve never counseled four dudes.” And he said, “So just so you know, if this thing goes south, I don’t bear any responsibility at all for your business.” It was great.

Mindy Diamond:

I love that you just shared that because I want to normalize what you just said. It is exceedingly rare and it makes sense that it’s rare that four partners, two partners, but certainly four, who come from different backgrounds, different ages, different financial stability, different risk tolerance, different whatever it is, different entrepreneurial spirit, different everything, could possibly be at the same place at the same time. And the fact that it only took you a year to realign is unbelievably short.

I am working with teams… I think you guys know that we were lucky enough to facilitate the move of the largest breakaway in the industry, the guys in Atlanta, the OpenArc deal. That deal was 10 years in the making, and one of the senior members of the team got there first. He was all in as far as being an entrepreneur. He had the vision, he wanted it, but most of his other partners were either completely no way, no how, non-starter, or at varying degrees of no or lukewarm. It took 10 years to get to the same place. And that doesn’t mean 10 years of active exploration, but to be honest with you, 10 years is a long time. But that notion of it taking time for everybody to be at the same place makes a lot of sense. I want to normalize that and kudos to you for bringing in outside objective help to get there.

The second thing is not all partnerships weather the storm or should. Some are very clear like you, the most important true north is that the band stays together. But others say, I’m working with a team right now that says the senior partners says this process of even beginning to think about what we each want and highlighting the differences shows that now I’m thinking about the fact that I’m really the growth engine and I’m resentful of paying X, Y, and Z to partners that don’t grow as fast. So it highlights fractures and a lot of times the band doesn’t stay together nor should they. So kudos to you is my point for only having it taken a year.

But I want to ask you a question, which is, so at what point did… It sounds like you both had entrepreneurial DNA, you realized yours, Mike, you said in 2009 you were thinking about it when you left JP Morgan. Steve, you said you come from an entrepreneurial family and it was always there. So it sounds like wrestling with the desire for more freedom was always there or was there for a long time. But at what point for the two of you did being at UBS and being an employee cease to be enough and what drove that?

Michael Lee:

Yeah, so we’ve tried to be pretty… Where, and I think it was Jeff that really brought this to light, a number of years ago, we would constantly run into other financial services professionals and even other members in other industries that would say, “Hey, we’re having a lot of trouble attracting young talent. We just can’t find good people.” That’s not been our problem. We have had a ton of young people come through our doors, quality individuals, hardworking. We make a very good use of an intern program that we’re really trying to expose people to this industry and things like that. So for whatever reason, we started feeling called like we’re about building legacy. We’re about building something that’s going to outlive us and we’re about pouring into the next gen of advisors through a mentorship or apprenticeship type program. And that in addition to serving our clients the way that we do through our mission, vision and values, we also felt like this was a key thing that we were doing. So that works for a while inside of a W-2 world until it doesn’t, and that’s what we found.

Mindy Diamond:

UBS, and not just UBS, but any traditional firm is not really looking for you to build your own firm within the firm. They may tell you it’s okay to be entrepreneurial and you’re running your own business, but in the end they own you. And the notion of you actually building your own firm and then wanting the freedom to run it and compensate your staff the way you want to and name it the way you want to and all of that, that’s when you begin to run into friction.

Steve, what I’d love for you to answer about that is, so was the move or the desire to go or the goal of going independent, was it more about running away from what was frustrating you at UBS or limiting you at UBS or more about just we were entrepreneurs and there were a million things we wanted to do when we were running towards something?

Steve Armaly:

Wow, that’s a great question. I hate to answer it this way, but I would say it’s a little bit of both. Again, our DNA, each of us are a little bit different. I probably had the desires for entrepreneurship that were driving me from the beginning, feeling like that was the eventual landing spot was to get there. And we had a meeting, again, leaning on each other, just trying to get a deeper understanding of our motives. We know each other super well, but ultimately there was one conversation that I distinctly remember that I had defined success as eventually having our own firm and absent of that I would feel like we failed in a sense. So I think a lot of that existed, for instance, for me, probably for Mike also, but even in our difficulties of trying to make a decision of where we all stood and where we wanted to go, we got completely realigned.

And the one thing that we were very clear on is that this partnership to us was more than the business. It was really a partnership to do life together. And whether we were going to be at UBS or on our own, wherever, we were committed to being together because we all benefited from that as men. Our families benefited from it. We feel like our clients benefited from it. We just became better men by working together and to stay together was our number one priority. But I think over time, it clearly became evident that what we were building would not operate well in our previous environment. We were building something big well as we were doing, and as much as we got all the accolades, we still didn’t necessarily fit in some of the top tiers.

But more than anything, the thing that we saw clearly was the way that we wanted to use the resources that we were blessed with in terms of our revenue is that we could not adequately align it to a staffing model and it just continued to erode with time. The ability to have that margin or the excess to dedicate to resources so that we always could deliver what we call white glove service. It just continued to get chipped away year after year, and certainly some underlying frustrations about how things operated, whether it’s technology or back office or some of the ancillary parts of the business. It’s sort of like a dual mandate was occurring where we had this DNA in us pushing us that way, but there was also an environment there that was clearly showing us that our model didn’t fit well.

Mindy Diamond:

Well, because you were looking to build something… We call that an incongruence. You were looking to build something that was not really what UBS or any of the big firms designed the infrastructure to be. So you were swimming upstream. But I want to ask you a question, and it goes back to what you said, Mike, about I began to have an interest in independence in 2009, but the industry wasn’t really ready for you in 2009. That’s really the truth. There were outliers. There were people that were going independent because they were just so fiercely entrepreneurial or they had a unique business, but they were outliers. And when people went independent before probably 2018 or so, people thought that they were crazy. They must have lost their mind.

So I’m wondering what happened, what went on? What was the interest in 2009? What went into the decision to say, no, it’s not the right time and we’re going to go to UBS? And then at what point did it raise its head? And I’m asking you specifically, Mike, because you mentioned that you sort of began to feel that or sense it or see it so many years ago.

Michael Lee:

Yeah. So back in 2009, I was in a rare spot inside of JP Morgan. I was a producing manager, and so I never wanted to give up my book. So I would manage business units, but I also wanted to run the money. Was a portfolio manager from the very beginning, taught to think independently, and that was in my DNA. I was just coming up on age 40 at that point in time, and I had my, I’ll call it my Jerry Maguire moment where I was really evaluating what success looked like. And that looked like for me, I wanted to slow things down, I wanted to with my wife and daughter at that point in time in life, and also thought that the only way that I was going to be able to do that is to finally go out and get independent. But as you said, that was a pretty heavy lift when you’ve got obligations at age 40 and responsibilities and everything else like that.

So to literally walk out the door and say by myself, I’m going to go start a firm and relocate my family from… It was just a bridge too far for me at that point in time. And I had a conversation with the branch manager at UBS who hired me back then, a guy by the name of Marvin. And the Marvin said, “Well, Mike, it occurs to me you can come to the Carolinas with my money or you can come to the Carolinas with your money.” And that made a whole lot of sense at that moment in time. So I left and joined UBS with their money.

Mindy Diamond:

So you actually bring up a good point and you’re laughing, but it’s really true that we’re saying the industry wasn’t really ready. And what I mean by that is that right now to become a breakaway, to break away from a major firm, the industry, the ecosystem born to support people like you is vast and great and ready technologically, support-wise, legally, real estate, all of it. There’s a well-worn playbook. But in those days there weren’t. So the industry wasn’t ready. Financially, you weren’t ready, and that makes perfect sense. And the confluence of the two means that for, what, 16 years you put your head down, stayed at UBS. It sounds like it served you well until it didn’t, which is exactly the trajectory we see with most teams, it makes sense.

So let me ask you both a question. We talk about financially, and while in a perfect world, it sounds like both of you would’ve loved to be independent many years prior, usually it is the finances that often keep people from doing it sooner. But the reality of working for a big firm is that you’ve got a lot of unvested deferred comp, I’m sure. The reality is that you may owe money back, or at least some of the partners may. The reality is you may have been buying out somebody else’s retiring ALFA program, which is the retiring advisor program. The reality is that on the flip side, the opportunity cost of being paid a very significant deal on a billion dollar plus business at that point to go to a recruiting deal to go to another firm was huge. How did you justify that and to what extent did pursuing all that play into the decision?

Steve Armaly:

Great question, Mindy. And the one theme that we all agreed on right away if we were to consider making a move is that we had to center on the theme that the client comes first. If we were going to make a move, as much as we knew it could improve our lives, what we wanted it to do first was improve our clients’ lives, a better place to do business and deliver what we think is white glove service. And that was our mantra. Everything had to point to it being better for the client.

With that in mind, you hit the nail on the head. The industry has changed tremendously. If you were to consider going independent years ago, it looks totally different than what we experienced. And I think we’re pretty astute. We were head down advisors. We would get phone calls all the time about leaving. We never really entertained those calls because our focus was on the business and we knew if there was a time we would dedicate that, but we didn’t want to be distracted. But I think we had a good pulse on what was out there.

But I would say, and I would encourage anybody listening that’s considering the move, is you need to assess the industry because it is much different. It’s different from a financial standpoint. It’s different from an operational standpoint. The level of support that you get and the assistance is really, in a way, you’re waiting to be surprised to a negative, but we were surprised in terms of a positive. It is a much different environment.

Mindy Diamond:

What you mean is a much different environment than it would’ve been or was 10 years prior.

Steve Armaly:

Exactly.

Mindy Diamond:

Got it. So let me ask you a follow-up question to that and feel free either one of you to answer. When you say it took you guys, the four partners a year to get realigned, was everyone aligned from a financial perspective? Okay, I get it’s sort of easy for everyone to say, “We want to make it better for clients.” Everybody gets there. That’s not a hard one to agree on. But what’s really hard for every partner to find unanimous between the partners is the notion that we are all willing to give up a very significant transition deal upfront. We’re all willing to bet it on the long term. We all want to be independent from a financial perspective. Was that part of the issue?

Michael Lee:

The struggles that we were all having, obviously we were at different stages, but there were some real hurdles that had to be overcome, and Brian won’t mind me mentioning this, but he had some health and some insurance issues that came into play that he had to take … He’s got a special needs child. And so for him, the stakes were very high for him that went well beyond just current financial wellbeing, but what’s going to happen later? So there were some real issues that had to be worked through as we went through this. So I don’t think any of us had an eye toward maybe a big windfall at the end of the thing. It was more about getting set up and getting in an environment. We knew that if we could get to a point where we got to independence, it would work out. It would just work out. So that independence and staying together were the real drivers. And yes, there was a lot of soul searching that needed to take place in order to get there.

Mindy Diamond:

And you got to really want it. So I want to ask you a question. Today, there are two very valid ways to go independent. One is to do what you did, break away, pull together the resources that you need and build your own firm. And a subset of that is joining a supported independence platform where you can outsource the different aspects of being independent, but still be independent and own your own firm.

But the second very valid way is to join an established independent RIA. And because the industry, the independent, the RIA space has matured so much in the last decade, there are many private equity backed or very well capitalized mega RIAs that are very well positioned to not only recruit and acquire businesses that look like yours and fold them in, but also to compensate them well. And what that option does is eliminate the risk of leaving with no money upfront and it eliminates a lot of the startup factor, the house of the brain damage of starting something from scratch.

Had you guys ever considered that?

Michael Lee:

Yeah, and quite honestly, it was to you all… We keep talking about the industry so different from 2009 till now. But really and truly what your firm opened our eyes to was it’s different from what it was five years ago and it’s still changing. So as current and as up to speed as we thought we were, you really opened our eyes to the spectrum of opportunity sets that were out there. And absolutely we did consider the equity and the private equity route and the like. For us, we decided that the four partners was enough for us at this stage and we didn’t want a fifth or a sixth partner out there. It’s not to say that this thing doesn’t evolve down the road, but that’s not our intention.

But yeah, we looked at literally everything that you all put in front of us from an opportunity set that existed out there. And the conversations that we had with your firm over the course of the year in particularly were highly valuable to educating us in terms of what the opportunity set looked like. And through those conversations, we were able to really narrow it down to really about three or four, which was a very manageable subset to consider for where we are and what we were trying to accomplish. So it really became clear after those conversations.

Mindy Diamond:

I love it. And I’m appreciative of the kind words. I want to say that Deborah Aronson, I’ll give her a shout out, is recruiter on our team that had the privilege of working with you. And yes, she is spectacular and did spectacular work here, so I’m thrilled that it worked for you. I want to pivot to the transition itself.

So first of all, UBS is not part of the Broker Protocol, so it made the move trickier and riskier. Tell me what that was like and to what extent that additional risk factored into your decisions or lack of alignment for you.

Michael Lee:

Our lack of unity wasn’t around that piece. We got really good counsel. We followed the rules. It was a leap of faith to do that because you literally have to walk out with nothing. And we did. That’s scary in and of itself. But once we had decided that we were going and we had clarity around where we were going, that just became just another step in the process for us. Steve, I don’t know if you’d agree with that or not, but…

Steve Armaly:

Yeah, and Mindy, it’s a huge decision and on the surface it is scary. But again, what we found and were continuously impressed with was the support that we got. And especially in the legal area, it’s very well spelled out what you can and can’t do. And if you take their advice and follow it to the T, you’ll be in great shape. And that’s really what it comes down to is listen to counsel, they’re there to help you, and it will work if you follow the rules of the game.

Mindy Diamond:

Yeah. So the proof is in your pudding because you moved a billion dollars in assets or were at a billion dollars in assets in 225 days post move, which is extraordinary. So yes, you walked out of UBS with zero and 225 days later crossed the billion dollar mark, which is extraordinary. But were there moments in between that were, holy cow, what did we do? Or even moments beforehand is, oh my God, we can’t take client information. We’ve had this information for 16 years or 30 years and what are we going to do?

Steve Armaly:

Yeah. I think everybody will have a moment in the transition when they’re like, wow, we really did this and you’re going to hit some roadblocks. You’re going to be surprised to the good and maybe some to the bad. But ultimately, in your due diligence, you know your why. Why are we here? Why did we make this move? What is the truth in all of that? You’ve got to remind yourself occasionally about that and have faith and got to believe that this was more than just some decision that was made for self-interest. This was a decision that you pondered, you seek counsel, you had great consultants to help with, and you’ve done something like this in the past, you can do it again. And we all have to be reminded of that on the journey I feel like. Without a doubt, nothing good is easy and transitioning isn’t easy, but it is certainly worth it.

Mindy Diamond:

Yeah. So let me ask you a question. What did the pitch sound like? So day one, you leave UBS, you’ve got zero in AUM, and you call your first five clients. What did the pitch sound like and how did those clients react to that pitch?

Michael Lee:

Basically, we announced that we left and that’s it.

Mindy Diamond:

Remind us why, because the Protocol prohibited you from…

Michael Lee:

Yeah, we couldn’t do anything in advance and we couldn’t solicit or anything else like that. We were just literally allowed to announce that we had left and that’s it.

Mindy Diamond:

But I imagine clients had questions for you. So how and why did those assets begin to trickle in?

Steve Armaly:

And I meant to share this in the previous question too, is that if you’ve truly run your practice, as we all should, where you’re client focused, you’re doing all the things that you should do with your clients. You have comprehensive planning, you’re updating that planning on annual basis, you have regular reviews with your clients, you have

A Special Industry Update with Louis Diamond and Jason Diamond

Wirehouse advisor movement accelerated sharply in the first half of 2026. Louis and Jason Diamond unpack the numbers, the forces driving them, and what they reveal about an increasingly competitive advisor marketplace.

In Summary

Wirehouse advisor movement reached a notable pace in the first half of 2026. Across Merrill, Morgan Stanley, UBS, and Wells Fargo, 1,449 experienced advisors left while 932 joined—a net decline of 517 advisors in just six months. Yet those aggregate numbers obscure four very different firm-level stories and a much broader shift in the competitive landscape.

Louis and Jason Diamond unpack the findings from Diamond Consultants’ 2026 H1 Advisor Transition Report: Wirehouse-Focused Edition, looking beyond headcount to examine where advisors are going, why large teams are moving, what recruiting economics look like, and why wirehouses continue to win sophisticated advisors even as overall attrition rises.

The larger story may be one of expanding choice. More than 200 firms recruited at least one wirehouse advisor during the first half of the year, giving advisors more ways to match their business, economic, cultural, and client-service priorities with a model that fits.

Want to go deeper into the data?

Download Diamond Consultants’ 2026 H1 Advisor Transition Report: Wirehouse-Focused Edition for the complete findings, firm-by-firm analysis, advisor destination data, recruiting economics, and representative transitions.

Download the Full Report →

The Storyline

Wirehouses remain home to some of the largest and most sophisticated financial advisor businesses in the industry. But the market competing for those advisors has changed dramatically.

That makes the movement captured in the first half of 2026 particularly revealing.

At first glance, the headline is attrition: The four wirehouses lost 517 advisors on a net basis in six months. Dig deeper, however, and the picture becomes far more nuanced. Wells Fargo and Morgan Stanley were net winners, while Merrill and UBS experienced significant net losses. Nearly half of departing wirehouse advisors chose some form of independence, yet more than half remained within an employee model. And 41 teams managing more than $500mm left a wirehouse—including 20 managing $1B or more.

Louis and Jason examine what is behind those numbers. Their discussion looks at the push factors driving some advisors to reconsider their firms and the increasingly diverse pull factors drawing them elsewhere. Jason describes a marketplace in which the four wirehouses no longer compete primarily with one another, but with regional firms, boutiques, independent broker dealers, RIAs, platform providers, and other emerging models.

They also examine why the movement of the industry’s largest teams deserves particular attention. These advisors often have significant resources, strong economics, access to senior leadership, and well-served clients at their existing firms. Yet some are concluding that having more to lose can also mean having more to gain—whether through greater control, enterprise value, culture, branding, or another business priority.

The result isn’t a simple story of wirehouses losing and independence winning. It is a story about a marketplace with more credible choices – and more competition for successful advisors – than ever before.

Topics Covered

• H1 2026 wirehouse advisor movement and net attrition
• Merrill, Morgan Stanley, UBS, and Wells Fargo recruiting trends
• Wirehouse-to-wirehouse movement vs. advisor independence
• Large-team and $1B+ advisor transitions
• Push and pull factors driving advisor movement
• Wirehouse, regional, and boutique recruiting deals
• RIA valuations and private equity-backed acquisitions
• Enterprise value and advisor ownership
• Retire-in-place programs and compensation changes
• AI and technology as recruiting considerations
• The expanding universe of advisor affiliation models

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

What does the headline wirehouse attrition number really tell us? (04:28)
Jason explains why the 517-advisor net decline is significant, but also why headcount alone provides an incomplete picture of advisor movement.

Why is wirehouse advisor movement accelerating? (06:33)
The discussion turns to the push factors creating frustration inside firms and the pull factors created by a far broader and more competitive marketplace of alternatives.

Why are Wells Fargo and Morgan Stanley outperforming their wirehouse peers? (11:23)
Louis and Jason break down the four firms individually, including Morgan Stanley’s organic growth engine and Wells Fargo’s recruiting resurgence.

What’s behind the notable movement out of UBS? (16:25)
Jason looks beyond advisor count to the size and quality of the teams leaving UBS, while Louis considers the tension that can arise between corporate strategy and what individual advisors want from their firm.

Is the real story independence or the explosion of advisor choice? (20:46)
While 46% of departing wirehouse advisors chose independence, the conversation reveals an equally important trend: advisors are moving across a much broader range of W-2 and independent models.

Why does the movement of $500mm and $1B+ teams matter so much? (26:01)
Jason explains why these highly successful teams have both the greatest optionality and, potentially, the most to gain from reconsidering their model.

Why do wirehouses remain formidable recruiters? (30:42)
Brand, familiarity, investment capabilities, banking and lending, alternatives, and competitive recruiting deals continue to make the wirehouse model attractive to many sophisticated advisors.

What are firms paying to recruit top wirehouse teams? (36:02)
Louis and Jason compare current W-2 recruiting packages with independent transition economics and the increasingly significant valuations available through RIA and private equity-backed acquisitions.

What could shape advisor movement through 2027? (41:34)
Compensation changes, retire-in-place programs, RIA valuations and AI emerge as important forces to watch as advisors continue evaluating firms and models.

What should advisors ultimately take away from the data? (44:31)
The report isn’t intended as a case for changing firms. It’s a way to understand where the industry is heading, what advisors are looking for, and how the competitive landscape is evolving.

Key Takeaways

• Wirehouse movement is elevated on both sides of the ledger. Firms are losing more advisors, but they are also recruiting aggressively, so net headcount is only one measure of what is happening.
• The four wirehouses are experiencing very different recruiting environments. Wells Fargo and Morgan Stanley were net positive during H1, while UBS and Merrill posted substantial net losses.
• Independence is gaining share, but this isn’t simply an independence story. While 46% of departing wirehouse advisors chose an independent model, 54% did not. Regional firms, boutiques, and alternative W-2 models are also attracting meaningful advisor talent.
• The movement of large teams may be more meaningful than overall advisor count. Twenty $1B+ teams left wirehouses during the first half of 2026, despite generally having significant resources and leverage at their existing firms.
• More choice is changing the recruiting equation. More than 200 firms recruited a wirehouse advisor in H1, increasing the likelihood that advisors can find a model aligned with a highly specific set of priorities.
• Recruiting economics remain highly competitive. Traditional recruiting packages can exceed 400% of trailing production for select teams, while independent and acquisition models introduce very different ways to monetize and build enterprise value.
• AI is becoming part of firm evaluation. Advisors increasingly want to understand how prospective firms are approaching AI, whether through large-scale proprietary investment or the flexibility to select emerging third-party tools.

https://youtu.be/OZrhTf4nfCU

Quotable Moments

“The number of big teams in motion is probably the more important number than surely just the number of advisors in motion.” — Jason

“These teams that are this size…have the most to lose. What we’re seeing, though…is they flip that logic on its head.” — Jason

“More choice means more leverage for advisors.” — Louis

“Every firm is recruiting…Every firm is clearly losing advisors, some more than others. But the common through line is successful teams…have more credible destinations for their business than ever before.” — Louis

FAQs

How many wirehouse advisors moved in the first half of 2026?

Across Merrill, Morgan Stanley, UBS, and Wells Fargo, 1,449 experienced advisors left during the first six months of 2026, while 932 joined, resulting in net attrition of 517 advisors.

Are all four wirehouses losing advisors?

No. The aggregate numbers mask meaningful differences among the firms. Wells Fargo finished H1 with a net gain of 46 advisors, Morgan Stanley gained 23, UBS lost 182, and Merrill lost 404 on a net basis.

Where are departing wirehouse advisors going?

The destinations are increasingly diverse. In H1 2026, 46% chose an independent model, 24% moved to another wirehouse, and others selected regional, boutique, and alternative employee models. More than 200 firms recruited at least one wirehouse advisor during the period.

Are large wirehouse teams also moving?

Yes. Forty-one teams managing more than $500mm left a wirehouse in the first half of 2026, including 20 teams managing $1B or more. Twelve of the 41 teams chose another wirehouse, reinforcing that sophisticated teams are evaluating both employee and independent alternatives.

Why do advisors continue to choose wirehouses?

For many advisors, the appeal includes brand recognition, familiarity, banking and lending, investment capabilities, access to alternatives and SMAs, integrated infrastructure, and competitive recruiting economics. Louis and Jason also note that some perceived capability differences narrow considerably once advisors compare models more closely.

What recruiting deals are wirehouses offering financial advisors in 2026?

Jason describes typical wirehouse recruiting packages around 325–350% of trailing production, with packages exceeding 400% available for particularly desirable teams. Louis also notes that upfront components for larger practices can reach approximately 175–200% or more, depending on the team and deal structure.

Does the report suggest wirehouse advisors should change firms?

No. Jason explicitly describes the report as a source of industry and firm-level data rather than a sales pitch for movement. Its purpose is to help advisors understand where the marketplace is heading and the factors influencing advisor decisions.

What trends could affect wirehouse advisor movement next?

Compensation-plan changes, retire-in-place programs, RIA and private equity valuations, and AI capabilities are among the factors Louis and Jason identify as potentially shaping advisor movement through the remainder of 2026 and into 2027.

Across Merrill, Morgan Stanley, UBS, and Wells Fargo, 1,449 experienced advisors left during the first six months of 2026, while 932 joined, resulting in net attrition of 517 advisors.

No. The aggregate numbers mask meaningful differences among the firms. Wells Fargo finished H1 with a net gain of 46 advisors, Morgan Stanley gained 23, UBS lost 182, and Merrill lost 404 on a net basis.

The destinations are increasingly diverse. In H1 2026, 46% chose an independent model, 24% moved to another wirehouse, and others selected regional, boutique, and alternative employee models. More than 200 firms recruited at least one wirehouse advisor during the period.

Yes. Forty-one teams managing more than $500mm left a wirehouse in the first half of 2026, including 20 teams managing $1B or more. Twelve of the 41 teams chose another wirehouse, reinforcing that sophisticated teams are evaluating both employee and independent alternatives.

For many advisors, the appeal includes brand recognition, familiarity, banking and lending, investment capabilities, access to alternatives and SMAs, integrated infrastructure, and competitive recruiting economics. Louis and Jason also note that some perceived capability differences narrow considerably once advisors compare models more closely.

Jason describes typical wirehouse recruiting packages around 325–350% of trailing production, with packages exceeding 400% available for particularly desirable teams. Louis also notes that upfront components for larger practices can reach approximately 175–200% or more, depending on the team and deal structure.

No. Jason explicitly describes the report as a source of industry and firm-level data rather than a sales pitch for movement. Its purpose is to help advisors understand where the marketplace is heading and the factors influencing advisor decisions.

Compensation-plan changes, retire-in-place programs, RIA and private equity valuations, and AI capabilities are among the factors Louis and Jason identify as potentially shaping advisor movement through the remainder of 2026 and into 2027.

Explore the Data Behind the Conversation

The podcast adds context and commentary to the findings. The full report provides the underlying data, analysis, and representative advisor moves.

Download the Wirehouse Advisor Transition Report →

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

The Wirehouse Talent Battle: Winners, Losers and What’s Changing

A Special Industry Update with Louis Diamond and Jason Diamond.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is The Wirehouse Talent Battle: Winners, Losers, and What’s Changing. It’s a conversation with my partner, Jason Diamond. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our Annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Advisor movement is nothing new, but the pace and perhaps more importantly, the nature of the movement we saw across the wirehouses during the first half of 2026 is worth paying attention to. And there’s a reason we chose to focus this report specifically on wirehouse advisors. The four wirehouses still represent an enormously important part of the wealth management industry, serving some of its largest and most sophisticated advisors and clients. At the same time, those advisors have more legitimate alternatives competing for their business than ever before. That makes their movement particularly instructive. Where they go, what they leave behind, and what they’re looking for tells us a lot about how the broader industry is evolving.

In just six months, 1,449 experienced advisors left Merrill, Morgan Stanley, UBS, and Wells Fargo while 932 joined them. That represents net attrition of 517 advisors, more than the wirehouses lost on a net basis during all of 2025.

But those headline numbers don’t tell the whole story. Morgan Stanley and Wells Fargo actually posted positive net advisor growth. Nearly a quarter of departing wirehouse advisors simply chose another wirehouse. At the same time, 46% chose an independent model, and perhaps most notable, 41 teams managing more than $500 million left to wirehouse in the first half of the year, including 20 managing one billion or more. There’s a lot happening beneath the surface. Jason is essentially the architect of our new 2026 first half advisor transition report, wirehouse focused edition. So I’ve asked him to join me to go beyond the numbers, what’s driving the movement, why the four firms are experiencing very different results, where advisors are going, what firms are paying to recruit them, and what all of this may tell us about the evolving competitive landscape. There’s a lot to unpack. Let’s get into it.

Jason Diamond:

Thanks, Louis. I’m thrilled to be here. I’m excited to discuss.

Louis Diamond:

Amazing. Yeah, I know these data-driven reports have really become your brainchild. They’re incredibly helpful, I know to me and to a number of advisors and just people in the industry. This report is of extra interest and importance just because of the pace of movement we’re seeing specifically in the wirehouse segment. So I know you looked at the first six months of advisor movement, so January one to the end of June 2026, of course not a full year. We publish that report in 2027, but let’s start with the headline number you have here, which is 517 advisors the wirehouse has lost on a net basis in the first six months. Can you comment how significant that is?

Jason Diamond:

A couple things. First of all, I’m always excited to write this report because you and I, we spend our day talking to financial advisors, and we think we have a pretty good sense of where the puck is heading and the pace of advisor movement, but it’s hard to tell because we know we only represent a small microcosm of the industry. So I think we had this feeling like advisor movement was up across the board, and this report helped to put numbers to just how elevated movement is. And you alluded to this, recruiting is a two-sided game. It’s part attrition and it’s part inbound, and we saw elevated numbers on both sides of the ledger for the wires. And we’ll talk about, to say the wires is probably a little bit overly generalizing. It’s probably worth breaking down on a firm by firm level, but we’re talking about 1,449 advisors who left a wirehouse versus 932 advisors that joined a wirehouse.

So just at a very simple level, when you talk about where is the puck heading, it’s heading away from the wirehouse channel. Overall, the channel is losing advisor talent, but, and this is an important but, there are also plenty of folks in our industry who will be quick to tell you that the wirehouse space is dying and that W-2 models are a thing of the past, that everybody’s going independent, and 932 advisors that joined a wirehouse would tell you something far to the contrary.

Louis Diamond:

Yeah, numbers are numbers, but without context or grounding, it’s hard to square. Is that a lot? Is that a little? But I know from our 2025 report that if these numbers held that the net wirehouse attrition figures, it would already be far more than the wirehouse’s lost net in 2025. So can you talk a little bit about just the comparison to ’25 and what do you think this means for this year so far?

Jason Diamond:

You said it well. These would represent absolute records by not just a little, but by a long, long margin. And there is some seasonality to these numbers where it’s not necessarily fair just to double the first half numbers because as we know, very few advisors move in December, for example. But what it ultimately tells me is the things we’ve been talking about are starting to have an impact or continuing to have an impact on advisor mindset and advisor movement. And to rehash, that is to me a two-front story. It is a story of pushes and pulls. When we say pushes, we are talking about frustrations or limitations that people experience. And honestly, the wirehouses, all four of them are guiltier of frustrating or limiting their advisors than probably just about any other firm in the industry. That’s just a reality of life at the biggest firms on the street.

So we certainly hear plenty of push factors, but also excitingly from my seat, pull factors, meaning when advisors look out at the landscape today, I think we had a number in the report of 200 different firms recruited a wirehouse advisor in the first half. So you talk about diversity of choice, diversity of legitimate choice. That’s my biggest takeaway because I do think the headcount, while the numbers are eye-popping, what’s more telling to me, and you alluded to this a little bit in your introductory comments, the number of big teams in motion is probably the more important number than truly just the number of advisors in motion, in my opinion.

Louis Diamond:

Yeah, no doubt. We always caveat in our report since we started doing it that even though we’re guilty now of we’re talking about headcount, that’s a pretty misleading number because a firm can add someone with LOS 4 saying that that washes out a one advisor with a billion who leaves the firm. So it is an imperfect science. It’s impossible for us to really get into granular detail on AUM per move. The only way we can is if there’s an AdvisorHub or news story or the team happened to be on Barron’s or Forbes or some sort of industry list. So we’ll give that caveat that headcount is definitely not the whole story. We focus more on the quality and the size, and we’ll get later into this episode into the number of larger scale teams that were in transition and how that tracks versus other years.

I think what’s also interesting is the fact that this net attrition number is so much higher than it’s been because I think probably beginning of this year, maybe end of last year was the first time since 2016, 2017 that we’ve seen all four wirehouses be competitively back into the recruiting market.

So you would think that with four really competitive deals from four great firms that that would keep more people in the channel, but it seems to have had the reverse impact in many cases.

Jason Diamond:

Look, what I think that speaks to partly is the four wirehouses know they’re no longer operating in a world where they’re competing exclusively against each other. They’re equally competing against regional firms, boutique firms, RIAs, broker dealers, platform firms and the like, and that is a reality that just means there’s going to be more churn quote/unquote in the industry because of the fact that advisors are more likely to find their version of perfect. When you look out and say, “Well, I don’t want another wirehouse, but I need to monetize the book and I want to maintain equity and I want X, Y, Z,” you might just find that in what the landscape looks like today. So I think it’s cause and effect. The wires are paying those deals because it is so difficult to recruit. That’s the first thing I’ll say.

The other caveat I’d give is recruiting is a wonderful thing, but firms, I’ll call this the Morgan Stanley argument, and they’re right, are quick to point out that same store sales, organic growth matters probably just as much if not more. And Morgan Stanley advisors and wirehouse advisors as a whole tend to grow faster than other advisors in the industry. And so the argument is they may be slowing down quote/unquote on the recruiting side, but if they can feed their advisors faster and their advisors can grow faster, that may ultimately be a winning formula in the long term. What are your thoughts on that?

Louis Diamond:

I completely agree. It’s way, way cheaper to acquire a new customer through organic means than through inorganic means. It’s better for valuations in the RA world, certainly better for stock prices for publicly traded companies. It also buys loyalty, creates stickiness. So I would agree. Any firm that has a mousetrap to help advisors grow organically, there’s no downside. There’s probably five or six benefits. So you mentioned Morgan Stanley in particular. Let’s zoom into the four wires in particular because I think the attrition numbers, the growth numbers for each of them, they tell wildly different stories. So in the report you talk about how Wells Fargo was net positive. They actually have the highest gains plus 46, and Morgan Stanley was second with positive 23 advisors with UBS negative 182, Merrill negative 404. So massive differences between the net attrition figures for all of them.

Can you give some color behind each of them and why you think those numbers are what they are?

Jason Diamond:

Yeah, so the first thing I do when I look at these numbers is I want to normalize them relative to each other. And so here’s what I mean. Think about the base advisor population at these firms. UBS is by far the smallest of the wires, a half to even a third probably of the size of their peers, Morgan and Merrill in particular. So you see almost 200 net advisors leaving UBS. That’s really more than 400 if you think about it on a normalized basis in terms of Merrill or Morgan. That’s the first thing. The second thing I want to do is I want to say, are there any real outlier events that are causing the data to be misleading? Did a portion of the firm get bought or sold? Was there one team of advisors that had a hundred people on it that left?

Is there something that’s skewing the numbers? And Merrill certainly has that. Over a hundred of the Merrill departures left for JP Morgan, and that tells us I think that a lot of those departures are bank advisors in nature. The data is difficult to parse through sometimes of what is a “financial advisor” for the purposes of tracking. So that gives me some confidence that the Merrill attrition story isn’t quite that dire. And then when they look at Morgan Stanley and Wells, no question, that’s one where the numbers match our anecdotal experience. Morgan Stanley to me is like the little engine that could kind of steady eddy, keeps chugging right along as the clear winner over the last five years, certainly in the wirehouse space. We talked about their advisor’s ability to grow organically. The funnel story seems to be working, this idea that they’re feeding their advisors referral relationships from workplace, from E-Trade, and they also seem to have done the best job in terms of just general advisor sentiment of this peer set.

Wells I think is an interesting story here. Wells to me, not really a platform or a capability change, but obviously they were hindered dramatically in the past several years by the consumer banking scandal. Really what I would call it is, excuse the expression, but advisors and clients were allergic to the firm name, and we’re just seeing that a beat where now advisors are at least willing to entertain the conversation, more than willing to entertain the conversation. You pair that with a really, really good deal in both channels. And I will caveat this Wells number does include both their PCG and their FiNet channels. So it is probably skewed slightly higher given some of the FiNet channels are technically not really wirehouse moves, but still no question if you think about who is the number one success story of this year in advisor recruiting land, maybe not even just the wires, maybe industry as a whole, I would argue it’s Wells Fargo.

Louis Diamond:

I would agree. Actually, it’s great to see that Wells has rebounded. Reputations ebb and flow. Who’s hot, who’s not certainly changes. Wells was on the negative side of the ledger for much longer than we’ve seen any firm for a long time. So it’s great to see that they’ve rebounded. And this data too, I mean, I think it’s purest. This does not count the internal moves of W-2, private client group advisors moving independent with FiNet. To us, that’s just net retention. It doesn’t tell an overall story. So that’s great to hear. Let’s drill it a bit more into UBS. I mean, you mentioned it’s the second biggest loser on a net basis, but based upon the size, you make the case that they’ve lost the largest percentage of their population of advisors. So what’s actually happening within UBS?

Jason Diamond:

The single most concerning data point and probably the most telling data point to me in all of this is the asset numbers that have left UBS in the first half of the year, massive outflows. Said another way, it’s not the number of teams necessarily that have left UBS, it’s the size of those teams. These are not little small bank teams that are going to the local regional bank on the corner. These are franchise marquee corner office teams. We can count certainly double digits of those types of teams. So whenever we see that, it certainly gets our attention because the question is what’s going on under the hood? Are there issues with the firm? I think UBS is an interesting one. They made the compensation plan changes, now it’s a year and a half ago, have realized that that is a difficult genie to put back in the bottle.

And I think what it shed light on is advisors just felt like the value they were getting from the firm is no longer worth the 50% of revenue that the firm is taking. The number of headaches that they’re running into, whether it’s I can’t hire support staff, compliance is overly onerous, it’s difficult to grow, it takes me too long to get simple answers, all of that just makes it so that it’s no longer worth it to justify the juice isn’t worth the squeeze. And there’s no question, I feel there is a real momentum trade with financial advisor movement. So advisors see their colleague from a market away, a huge team leaving, and it gets their attention, and then they see three other teams leaving, and they go, “Hmm.” And then almost they feel like they have permission, I think, like, “Hey, I feel this way too, and look, all these other teams are leaving as well.” I think we saw that flywheel.

The question is what inning are we in? I don’t think it’s over. I think you’re still going to see some big UBS teams leave. And on top of that, they have been able to recruit inbound. We have seen some teams go inbound into UBS, but it’s taken a really, really lofty deal to be able to do that. When that deal normalizes more, what is their ability to recruit? So I’m curious what your thoughts are.

Louis Diamond:

I would agree. Yeah, it felt like in 2025, UBS didn’t really recruit anyone, but definitely seeing them pop up more as a winner. So it’s telling that they’re paying a big deal. They have been relatively successful in bringing new advisors into the firm, but they’re still losing and on a pace to lose even more than how they can restock the pond. So I think it’s super interesting. To me, the distinction with UBS right now is fairly simple. It’s what may work for the corporation or for shareholders or for the management team in Switzerland is not what individuals want from their firm. It’s that push and pull or that tug of war of corporate agendas are one thing, corporate strategy, what they’re trying to do is great. It’s their prerogative, but a lot of times those decisions have downstream impacts on advisors, and a lot of times it’s a light bulb moment for advisors of, as long as I’m here, I’m not fully in control and either their changes are good enough for me, I can make peace with them, I can reconcile them.

Or it’s a reminder, a wake-up call that unless you’re independent or unless you’re at a firm that has a track record or history of not making compensation plan changes, really making decisions that are framed as far as what’s best for the advisor rather than for the shareholders, this is always going to be a dynamic that’s in play. So I think to me, that’s the short version of what’s happening with UBS. Still a great firm, not going out of business, but I think in a bit of purgatory right now as far as what their strategic play is to stop the outflows, increase the inflows, and really continue to build on a leading wealth management franchise.

This whole report, this stat that you pulled is probably the most interesting because it’s so different from how we usually see this data. And maybe once the dust settles on all of 2026, it’ll normalize.

But the report says that 46% of departing wirehouse advisors chose independence. To me, that’s a big, big number. I think it’s usually like 25%, 20%. I might be wrong, but this is a massive number. So can you dig into this a little bit more?

Jason Diamond:

So again, I think there is definitely some skew here based on size of teams because generally speaking, when you think about just in terms of number of moves, count of number of moves, it’s generally smaller independent moves that are the most common, meaning moves towards the independent space. It’s not that there was this massive wave of mega independent breakaways, although we certainly did see those types of moves. When I think about 46% of departing advisors choosing independence, to me, there’s two ways to think through that number. One is the 54% did not, and that is also telling to me that there is still a massive subset of advisors that choose some version of knowing that their life is not going to get better in every way, they still choose a version of captivity for some reason or another. They want the brand, they want the big deal, they worry about what their clients will think about independent.

So more than half of advisors still are not going that direction. Now that said, when you see a number like 46%, the other thing it says to me is we never see advisors really going the other way, meaning advisors who are independent very seldom move back towards captive models. So over time, this is a concerning story. The story that the big traditional firms are losing headcount slowly over time, they will need to combat that in some other way. And one way we already spoke about will be organic growth just growing faster than the rate at which their advisors leave.

Louis Diamond:

No doubt. I think the other piece of it is, so you have 46% who are going independent, that means 54% are on the other side. They’re moving within W2 world, but double click into that 54%. I know for the first half of this year, 24% of all the advisors who transition went to another wirehouse, and that alone is much lower than it’s been. I think usually it’s 50, 52, 54, 55% or so of all wirehouse advisors transition within their channel, move to another wirehouse. So for the first half of this year, to me, the analysis shows more interest in independence, less movement from wirehouse to wirehouse, but still a lot of interest in alternative W2 models. Would you think that’s accurate? Does that tell the story?

Jason Diamond:

100%. And that’s really the story that I think if you asked a lot of advisors or even people in the wealth management media, what is the story in your mind? Forget the data. I think it’s that. It’s that certainly independent has its place, but there is a whole slate of, I don’t want to say tier two because it makes it sound like they’re less than, but a whole slate of alternative W2 firms that aren’t the big wirehouses, whether that’s the regional firms like Raymond James and RBC or the boutique firms like Rockefeller that advisors are certainly moving to, which says to us, again, the model is not broken. It’s not an indictment of the W2 model where everybody’s like, “Yeah, this is a no-brainer if you’re not a 1099 or a K-1, it’s bust.” That’s not the story we’re really seeing play out.

Louis Diamond:

I think it’s honestly kind of the opposite. We’re actually seeing a lot of independent firms start W2 channels. LPL’s had a bunch of success with their Linsco W2 model. Cetera and Osaic now have W2 channels. So it seems like that the pendulum just swings back and forth, but to me, again, highlights number of choices. You said it in your opening, of the advisors who moved in the first half of this year, 200 different destinations. That’s absolutely crazy, considering we have four major firms we’re talking about that picked up about a quarter of those advisors. The fact that the other 75% or so moved to 196 or more different firms, that to me is the hero of this report. It really, really shows the amount of choices. And if you pick through the list, it’s hard to say there’s 200 legitimate options because there’s a lot of one-offs, and this guy was fired, there’s some hair on this. It’s hard to pull that out.

But the fact that that many firms have won a wirehouse advisor is incredibly, incredibly telling, and I think the best possible news for an advisor. More choice means more leverage for advisors. It means deals are better. They get better and better and better. And like you said earlier, it means that no matter what your list of items are, your must-haves, your nice-to-haves, you’re probably more likely than ever to be able to match that up with what’s available in the industry, which is very, very cool. So let’s talk a little bit about the quality. Like we said earlier, headcount, a bit of a misleading proxy for success and where the best advisors are voting with their feet. Can you talk a little bit about, let’s say, the teams managing 500 million or more or a billion or more, however you cut it?

Jason Diamond:

Yeah, and there was a lot of these. You don’t need to track the data to know there was a lot of these just because we saw these are the ones that make the front page of AdvisorHub, and we saw at least one a week really leaving the wirehouses. Now, some of those agreed did direct back towards a wirehouse. UBS even won their share of wirehouse advisors, but we highlight that number for a couple reasons. Number one, those teams have infinite choice. So you talk about all these different spectrum of options. That’s not necessarily true for every team on the landscape. If you’re running a business that’s 800,000 in revenue, you may not have the scale or size to go out and start an RIA, for example. These teams that are this size, we blow their mind sometimes, I think, when we talk about the degree of optionality they have in today’s landscape. That’s the first thing.

The second thing is, when you think about their setup at their current firm, these should be the advisors that are the best taken care of, the best compensated, a phoned to the top, their clients are super well-served, they’re growing fast. On paper, these are the people that should not be moving because they have the keys to the kingdom and they have the most to lose, frankly, by something going wrong. They know a transition is risky. What we’re seeing though in these teams moving 20 teams over a billion in assets leaving a wirehouse in the first half of the year, we’re seeing they flip that logic on its head. They say, “Yes, we have the most to lose in some sense, but we also have the most to gain.” And what that looks like can mean something different for every team. It can mean, for some, economically it means let’s recapture as much of our enterprise value as possible.

We want to own the economics, so we might be able to sell this someday. For others, it means culture. We just missed the Bank of America or the Merrill of old. We want to get back to that feeling that we had elsewhere. For others, it’s the ability to market or brand yourself. I want to run a podcast. So there’s no definition of what that has to look like, but these teams all for one reason or another, and I guarantee you every single one of those teams, the money might have been a part of it in some capacity. It was not first on the list. I say that hand to God. I think there’s sometimes a perception of like, “Well, yeah, of course these teams are leading because they can get 400% to do so.” Oftentimes, we see teams like this, in fact, taking no money.

They’ll say, “I’m going to launch a business and take no money up front because I believe in what I’m building, and I know I’ll be able to sell this thing on the back end.”

Louis Diamond:

No doubt about it. The valuation multiples for a 500 million or above or a billion dollar and above practice, they scale exponentially versus the production multiples, the 350%, the 400% deal that a W2 model firm pays, it stays stagnant. Of course, the base of the revenue increases, so the valuation increases, but you’re not seeing for a $5 billion team a 600% deal from Morgan Stanley. So I think there’s some of that dynamic, it’s just the valuations are absolutely crazy in other segments of the industry. So we’re seeing either teams jump for that right away, looking to sell their business out of a captive firm to a big RIA or private equity firm, or taking the first step in their play, which is let’s go build something and then in the future we’ll monetize it. So of these big teams, do you know, and I might be putting you on the spot, how many of them move to another wirehouse?

So trying to highlight or drill into this trend. So 20 teams over a billion move, which is a big number. I think it’s on par with what we see for a typical year. Do you know how many or what percentage of these stayed within the wirehouse channel?

Jason Diamond:

Yeah, of the 41 teams over 500 million, 12. So right on par, I think with those, I’ll call it roughly a quarter staying within the wirehouse channel. And those are significant wins for the wirehouses, which again, the fact that we’re seeing 500 million plus teams choosing a wirehouse, these are not fools. These people do extensive due diligence on their life’s work. It shows again the degree to which a wirehouse is a legitimate home for a wealth management business in this day and age.

Louis Diamond:

Yeah, perfect. So the numbers here, like you said, headcount could be misleading. I think just showing the quality of advisors who are moving and also the quality of advisors staying within the channel is telling. So let’s flip the equation on its head. If advisors are leaving wirehouses at an elevated level like we talked about, why are we still seeing the wirehouse be formable recruiters? Why are they still showing up in virtually every conversation we have with the wirehouse team?

Jason Diamond:

I think the easy answer to this is a degree of inertia or the easy button, if you will, where advisors, the fact that there’s 200 firms that an advisor might go to is not necessarily a good thing. That also means overwhelm, and it’s sometimes just daunting to even consider all of that. And the wirehouse world is like the cocoon in which a lot of these advisors grew up. It’s like, “I know that world, it’s comfortable, and my clients know that world more importantly.” So I think that’s part of it. I think there is a capability story here to an extent, and some of this might be misconceptions. So to the extent you consider brand a capability, you have to concede that point to the wirehouses. They have the best brands on the street, and clients ultimately may care about brand. I think this gets overstated a little bit, but brand would certainly be one.

SMA and alternative platforms are two of the others that get commonly floated. So high net worth focused products that the wirehouses have just done the best job at from an access perspective and from a pricing perspective. And because of that, a lot of wirehouse advisors are pretty heavy users of these types of products. And so what happens is they find it difficult to move the book of business to a firm that’s less competent in that area. We’re seeing a lot of firms bridge that gap from a capability perspective. Banking and lending might be another one. I’m an advisor at Merrill. I have the kid in the candy store mentality. I have access to everything I need all within one house versus if I go independent, that’s a major mindset change to have to shop the street. All of that, plus these are some of the top deals on the street as far as W-2 deals go.

It’s easy to see why there are some advisors who just say, “This is the route I’m going to go.”

Louis Diamond:

Absolutely. Yeah, man, I think you’re right. Especially on the SMA side, we see UBS has these free SMA strategies, so that’s really hard to reconcile or to account for in a transition. I think too, and I’ll see if you agree, that access to SMAs, access to alternatives, access to banking and lending, that’s available everywhere. Is it more so that the wires just do a better job of positioning it or selling it? Or it’s more so just like it’s what these advisors are used to. They’re used to the way it works that I pick up the phone, I call my Bank of America banker, I need an alternative, I click here versus more of an unbundled approach in other segments of the industry. You think that’s part of it too, is it’s not that they access necessarily better at the wires, but it’s easier to digest and it’s just more familiar the way that it all comes together?

Jason Diamond:

I think it’s 90% what you’re describing. 90%, it’s just a matter of apples here and oranges here, and if you translate the language, you end up in the same spot. That 10% is a legitimate capability gap. It might be a pricing gap. Oh, they actually can access that manager, but Morgan Stanley has $80 trillion in assets with them, so they’re going to get leaner pricing than this independent firm. That 10% is purely a test of an advisor’s mindset. Do you have that growth mindset of, is that a deal breaker for you? Can you find a way, either that means having to have a conversation with clients about switching products, about eating the cost for a period of time, or some advisors will let things like that be a deal breaker? And in our opinion, that’s fine as long as you’re not letting the tail wag the dog, meaning don’t be held hostage because you’re using a lot of QGar at UBS.

Louis Diamond:

Well said. Do you think this report draws out the fact that wirehouses are in fact becoming more selective about the type of advisor that they actually want to target? If you just follow the pay grid changes, the comp plan changes that all these firms make on an annual basis or semi-annual basis, it seems like they keep pushing up the grid thresholds where there’s certain incentives for larger teams or for teaming. Do you think that some of the wirehouses not recruiting as many of advisors on a net basis is because they’re in fact actually becoming more selective? They’re saying no to someone with a hundred million, 50 million, et cetera, or is that just an oversimplification?

Jason Diamond:

I think that’s the narrative that they are perpetuating. What does saying no look like? I think it’s almost the equivalent of, we used to call this quiet quitting where they’re not telling these advisors, we don’t want you, but they’re making policies that say to these advisors, we don’t really want you. I think there’s definitely some of that. So meaning if you’re a small advisor, Morgan Stanley’s payout grid is among the worst on the street of their peer set. So you may be ruled out. That’s not Morgan Stanley saying to you, we don’t want you here. I think in a lot of cases, these firms know how competitive the recruiting environment is, and they will take advisors more often than not. So that’s why I’m always not so quick to be like, “Yeah, they’re super selective. They’re saying no to all these $1 and $2 million advisors because that’s just not the world we live in.”

Louis Diamond:

Yeah, I would tend to agree. Maybe there’s some truth to it. It explains some of it, but not all of it. Let’s talk a little bit about deals. I know it changes a lot of time, very much dependent upon size of the business, quality of the business, competitive dynamics, et cetera. But in general, if you’re a wirehouse advisor who’s considering another W2 model, what’s the typical range we’re seeing?

Jason Diamond:

So this may be where, to use your point, maybe where we see firms getting more selective is in deal structure where they’ll say, “Here’s our rack rate deal.” So in the case of wirehouse firms, I would put that number at 325 to 350%-ish, but, and it’s a big but, they have the ability, every single one of them in my mind has the ability to get north of 400% for the right team. Wells and UBS are north of 400% right out of the gates. The regional firms too, you think about RBC, Raymond James, even Stifel to a lesser extent, they’re right there when they want to be. But that’s the story to me is if I had to quote a deal, I’d probably quote something fairly conservative, like 325-ish percent, knowing that for the right teams that show well, have a lot of advisory or invested in growth, et cetera, we can do substantially better than that.

But firms are absolutely being more selective in that regard, and part of that just capital’s gotten more expensive.

Louis Diamond:

Yep, exactly. I think too, headline numbers are great to share with your friend at the golf course and, “Oh, Jimmy got this.” But really what matters more is the structure. So what we’ve seen over the last couple of years is the upfront portion of the deal has increased, probably not the same rate as the overall deals have, but we’re definitely seeing for a larger practice, 175% at a minimum upfront. In some cases 200% or more is fairly commonplace, and different options as far as weighting of the backends, easier to hit certain bonuses, carving out assets, the fact that backends are based on AUM now for the most part instead of production, they’re all things that in a competitive market have gotten better for the advisor, even if the overall headline deals and the upfronts I think have gone up, but they’re not going up or changing to keep pace with all the competitive dynamics in the industry.

Let’s talk briefly about if a wire team wants to go independent, do they get a deal? What does that look like?

Jason Diamond:

Maybe, probably they get something. It depends on the version of independence. So the way I think about this is there’s four different paths a wirehouse advisor might walk. One is they might just launch an RIA with one of the major custodians. We see Goldman in this space commonly for wirehouse teams. In that instance, not really. They might get some benefit or startup expense dollars, but they’re not really getting a transition deal. Another path though might be affiliating with an independent broker dealer. So this would be like an LPL, and those absolutely come with a recruiting deal, 100% in some cases of revenue, a hundred basis points on assets, maybe even just north of that. Another path might be these support players or platform firms. So this would be firms like Sanctuary who in many cases do indeed pay transition deals, and the pitch is fairly straightforward.

It’s basically, we can help you to look and feel like an RIA, but we take off a lot of the heavy lift from your plate. So things like compliance and cobbling together your tech stack, you don’t have to do. And then the last flavor I would mention briefly, it’s arguably not even independence, but you spoke about it for a second. We’re seeing advisors sell their businesses directly to independent firms, acquirers, private equity firms, roll-ups, et cetera. Those advisors are not independent on the other side. Typically, they get purchased and become W2 employees of the buyer, but those deal structures are eye-popping. You’re talking about multiples. Oftentimes it’s not a revenue multiple, but if I had to quote a revenue multiple, I’d probably say five to 6X top line, maybe 5X top line, so big numbers.

Louis Diamond:

Yeah, that’s the part that I’m always so interested in because the math for selling your business out of a wire to typically a large PE-backed RIA, the math is so, so, so compelling. Get equity as part of it, which if you run it out over 10 years is potentially even more valuable than the cash. It’s capital gains, either all of it or most of it. Yeah, five and a half, six, sometimes more. I know this report in this episode is about the first half of 2026, but a recent example in September of this year was Eddie Ventrice and Mike Bober down in Boca ran a $20 million plus UBS private wealth team. They sold their practice to Cresset, who’s been on this episode. So that’s a live, really tangible example. We’ve been saying this for years, hasn’t quite picked up yet, but I do think that’s the undiscovered terrain of this recruiting dynamic.

I think that has more potential leverage for deals to increase or stay the same than what Raymond James is paying relative to UBS or what Rockefeller is paying relative to Morgan Stanley. I think it’s this X factor of these very aggressive, very well capitalized buyers coming in and taking a dent out of wirehouse recruiting. So again, might be early. We started our breakaway bank with Dynasty to capture this trend, and I’d say it’s early in it, but we’re very bullish it’s going to happen.

Let’s talk a little bit forward-looking. What do you think are the biggest forces that will shape advisor movement through the rest of 2026 and even into 2027?

Jason Diamond:

Compensation plan changes always pop up in this bucket right around this time of year because they do seem to always spur just a little bit of movement, good, bad or indifferent. It’s oftentimes just I think an excuse for advisors to reevaluate. I’d be remiss if I didn’t mention retire in place deals. This is not a new dynamic, nothing to do with the end of the year, but to me, the single biggest determinant of when we run this report next year, what are these numbers going to look like? I would turn that question on its head and say how widespread does adaption of retire in place deals become? Or how much more widespread, I guess I should say. I think it’s a huge determinant about whether advisors can and will move because it represents the most compelling alternative. Compelling, I might put in quotes.

You mentioned this private equity valuation story. I’m keeping my eye on that because we have now seen a couple of teams. We were not wrong, we were early, shall we say, to this prediction here, but we’ve now seen a couple of teams where I think you could start to see this come true a little bit more. So meaning the Mariners and Mercers and Beacon Pointe of the world start to acquire more direct

With Susie Cranston, CEO, Cresset | Kelly Wagman, PhD, Director, Head of AI Strategy, Cresset

Cresset CEO Susie Cranston and Head of AI Strategy Kelly Wagman explore the modern family office, AI as a scale enabler, human-led advice, equity, culture, and what Cresset is building next.

In Summary

What does the modern multi-family office really look like—and how might AI change what it can deliver?

Cresset has grown from an idea less than a decade ago into a national wealth management and family office firm with more than $250B in assets under management and advisement and more than 700 professionals. Yet its next chapter isn’t simply about getting bigger. It’s about finding new ways to extend highly customized advice and family office capabilities while preserving the human relationships at the center of the model.

CEO Susie Cranston and Kelly Wagman, PhD, Director and Head of AI Strategy, share how Cresset is approaching that challenge. Susie draws on lessons from helping build First Republic’s wealth management business – including the importance of a client-first culture, empowered advisors, and balance-sheet strength – while Kelly explains how Cresset is using AI, integrated data, and firm-specific tools to give advisors greater leverage.

The result is a look at a modern family office where technology may expand what advisors can deliver rather than diminish their role—and where culture, ownership, talent, and human advice remain fundamental to the firm’s vision for growth.

The Storyline

The family office has traditionally been a difficult model to scale. Its value comes from knowing a family deeply and coordinating an increasingly complex set of needs that can stretch from investments and estate planning to family governance, tax strategy, bill pay, household management, and even security.

Cresset has invested heavily in that infrastructure from its earliest days. Today, approximately 150 professionals are dedicated to family office services, supporting a broader organization with more than $250B in assets under management and advisement.

For Susie, the model also reflects lessons learned during more than a decade at First Republic. She describes how a deeply client-centric culture and empowered client-facing professionals helped create extraordinary loyalty and growth. But the bank’s collapse also left her with an appreciation for the importance of a “fortress balance sheet” and a clearer understanding of the tradeoffs that can come when banking and wealth management coexist within the same organization.

Topics Covered

• What defines a true multi-family office—and why dedicated infrastructure matters
• How Cresset grew to more than $250B in assets under management and advisement
• Lessons Susie carried from First Republic to Cresset
• Why client-first cultures depend on empowering client-facing professionals
• The importance of balance-sheet strength and business-model structure
• How Cresset approaches family office wealth strategy and wealth administration
• Why AI may make sophisticated family office capabilities more scalable
• How integrated data can improve speed, personalization, and advisor productivity
• Cresset’s approach to building AI tools versus working with outside vendors
• Why security, compliance, and data ownership matter in an AI strategy
• How Cresset thinks about culture, equity, and advisor alignment
• Equity versus cash when advisors evaluate potential partnerships
• Independence versus joining a scaled wealth management platform
• Why AI may increase rather than reduce the value of human advice
• Cresset’s vision for talent, leadership, and the next decade of the firm

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Cresset Today: $250B+, 700+ Professionals and a National Footprint (06:28)
Susie describes Cresset today, including its wealth management, institutional consulting, and family office capabilities—and an ownership structure in which employees and clients own approximately 80% of the firm.

Lessons From First Republic’s Client-First Culture (08:30)
Susie explains why doing what is right for the client—even when it carries a short-term economic cost—can create long-term loyalty, referrals, and a stronger business. She also shares why empowering client-facing professionals was critical to First Republic’s culture.

The Hard Lesson: A “Fortress Balance Sheet” (12:19)
The collapse of First Republic changed how Susie thinks about financial strength, risk, and the tradeoffs involved when banking and wealth management are combined.

Why Cresset—and Why the Independent RIA Model? (14:57)
Susie explains what attracted her to Cresset: a client-centric culture, strong balance sheet, and an independent structure capable of serving the increasingly complex needs of ultra-high net worth families.

What Does a Real Family Office Look Like? (20:31)
With approximately 100 advisors and 150 professionals dedicated to family office services, Susie explains the infrastructure Cresset has built to extend well beyond traditional investment management.

AI as a Family Office Scale Enabler (23:53)
Susie explains how AI could help extend services such as bill pay and tax support to a broader range of clients and family members—using technology to scale expertise that historically has been difficult and expensive to deliver.

The AI Opportunity Starts With Integrated Data (25:22)
Kelly explains why Cresset views data as foundational to its AI strategy and how it could support faster answers, more personalization, and more advisor time devoted to clients.

Beyond Investments: What Family Office Clients Actually Need (28:15)
From estate and tax planning to family governance, household payroll, travel logistics, and security, Susie offers a practical look at the complexity behind comprehensive family office service.

Culture, Alignment and the Case for Cresset (33:17)
Susie explains why Cresset puts culture first when considering advisor teams or institutional partners—and why ownership and alignment are important parts of the firm’s proposition.

Equity as a Currency for Advisor Wealth Creation (36:24)
Susie discusses the potential advantages of equity, why Cresset does not require advisors to take it, and why the right answer depends on an advisor’s circumstances and objectives.

Joining a Firm vs. Building Your Own (39:14)
Susie offers a balanced perspective on independence, including the economics, infrastructure requirements, and a more personal question: How much does an advisor actually want to be their own boss?

Cresset’s AI “Sweet Spot” (42:06)
Kelly describes Cresset as large enough to invest meaningfully in AI but small enough to remain nimble, allowing it to build firm-specific tools and capabilities around its own data and workflows.

Key Takeaways

A real family office requires real infrastructure.
The term “family office” has become increasingly common across wealth management, but Cresset defines it through dedicated capabilities and people. Its offering extends beyond investments into tax and estate planning, family governance and education, bill pay, household administration, payroll, logistics, and other complex family needs.

AI could change the economics of high-touch family office service.
Many family office capabilities are expensive and difficult to scale because they rely on specialized professionals. Cresset sees AI as a way to leverage that expertise more broadly, potentially bringing sophisticated services to more members of a family and a wider range of clients.

The AI strategy is ultimately a data strategy.
Kelly explains that Cresset’s approach goes beyond adopting general-purpose AI tools. Integrated firm data, custom capabilities, build-versus-buy decisions, compliance, security, and thoughtful implementation are central to creating meaningful value for advisors and clients.

Human advice may become more valuable—not less.
AI can accelerate information retrieval, automate routine work, and increase personalization. But Kelly argues that trust becomes even more important when technology can generate many different answers. The combination of a trusted person working with AI may prove more powerful than either alone.

Culture and ownership remain central to Cresset’s growth model.
Susie sees culture as a prerequisite for any advisor or firm joining Cresset. Equity can then create another form of alignment by allowing advisors to participate in the enterprise value they help create.

Scale should create capability, not simply size.
Cresset’s thesis is that its position between very large institutions and smaller independent firms can offer an advantage: sufficient resources to invest in talent, technology, data, and family office infrastructure while remaining nimble enough to put those capabilities to work.

https://youtu.be/W9Q5gZ425fs

Quotable Moments

Susie:
“If you always do the right thing for the client, and you’re always delivering the very best you can for the end client, good things happen.”

“AI is going to be a tool that really enables that scale.”

“Clients are saying they want more human advice, not less, in the world of AI.”

“We always say we do culture first no matter what.”

Kelly:
“Cresset really is at that sweet spot of being big enough to be able to invest in the space, but small enough that we can still be nimble.”

“People are better when they’re working with a person who is then working with AI.”

FAQs

What is a multi-family office?

A multi-family office provides coordinated wealth management and other specialized services to multiple ultra-high net worth families. Susie explains that Cresset’s capabilities include investment management as well as estate and tax planning, family governance and education, bill pay, household administration, payroll, travel and logistics, and other services required by complex families.

How is Cresset using AI in its family office model?

Susie and Kelly describe AI as a way to scale the knowledge and capabilities of Cresset’s family office professionals, automate certain workflows, improve access to information, increase personalization, and give advisors more time to interact with clients. The firm is also developing Cresset-specific AI tools and capabilities around its data and internal knowledge.

Can AI make family office services available to more clients?

That is one of the opportunities Susie sees. Services that traditionally require significant amounts of specialized human labor may become more scalable through AI and automation, potentially allowing Cresset to extend certain family office capabilities to clients or family members at different wealth levels.

Does Cresset believe AI will replace financial advisors?

No. Kelly says she is not concerned about AI eliminating the advisor’s role, particularly in the ultra-high net worth market. Instead, she expects AI to raise expectations for speed and personalization while increasing the value of a trusted human advisor who knows how to use the technology effectively.

What did Susie learn from First Republic?

Susie points to First Republic’s client-first culture and the empowerment of client-facing professionals as important drivers of its success. Its collapse also reinforced for her the importance of maintaining a strong balance sheet and understanding the risks and tradeoffs created when different financial businesses are combined.

Why does Cresset emphasize equity for advisors?

Susie views equity as a way for advisors to participate in the enterprise value they help create. Cresset does not require teams to take equity, but she argues that ownership can provide alignment, distributions, potential appreciation, and participation in future liquidity events.

What should advisors consider when comparing independence with joining a firm like Cresset?

Susie suggests advisors examine both the economics and what they actually want from their careers. Building an independent RIA can provide control and ownership, but it also requires responsibility for compliance, custodians, infrastructure, operations, and other functions. For advisors who primarily want to serve clients and grow, joining a larger platform may offer a different tradeoff.

What is Cresset building for its next chapter?

Susie describes a continued focus on comprehensive wealth management and family office capabilities, investment in experienced talent, and AI-enabled tools that can improve service and scalability. Despite advances in technology, she expects people and human-led advice to remain central to the firm’s strategy.

A multi-family office provides coordinated wealth management and other specialized services to multiple ultra-high net worth families. Susie explains that Cresset’s capabilities include investment management as well as estate and tax planning, family governance and education, bill pay, household administration, payroll, travel and logistics, and other services required by complex families.

Susie and Kelly describe AI as a way to scale the knowledge and capabilities of Cresset’s family office professionals, automate certain workflows, improve access to information, increase personalization, and give advisors more time to interact with clients. The firm is also developing Cresset-specific AI tools and capabilities around its data and internal knowledge.

That is one of the opportunities Susie sees. Services that traditionally require significant amounts of specialized human labor may become more scalable through AI and automation, potentially allowing Cresset to extend certain family office capabilities to clients or family members at different wealth levels.

No. Kelly says she is not concerned about AI eliminating the advisor’s role, particularly in the ultra-high net worth market. Instead, she expects AI to raise expectations for speed and personalization while increasing the value of a trusted human advisor who knows how to use the technology effectively.

Susie points to First Republic’s client-first culture and the empowerment of client-facing professionals as important drivers of its success. Its collapse also reinforced for her the importance of maintaining a strong balance sheet and understanding the risks and tradeoffs created when different financial businesses are combined.

Susie views equity as a way for advisors to participate in the enterprise value they help create. Cresset does not require teams to take equity, but she argues that ownership can provide alignment, distributions, potential appreciation, and participation in future liquidity events.

Susie suggests advisors examine both the economics and what they actually want from their careers. Building an independent RIA can provide control and ownership, but it also requires responsibility for compliance, custodians, infrastructure, operations, and other functions. For advisors who primarily want to serve clients and grow, joining a larger platform may offer a different tradeoff.

Susie describes a continued focus on comprehensive wealth management and family office capabilities, investment in experienced talent, and AI-enabled tools that can improve service and scalability. Despite advances in technology, she expects people and human-led advice to remain central to the firm’s strategy.

Related Resources

Listen: Disrupting the Landscape: How a $12B+ Multi-Family Office is Making Waves Amongst Advisors and Their Clients (With Avy Stein, Founder and Co-Chairman of Cresset)

Listen: The Evolution of an Elite Advisor: From Breakaway to M&A to Increasing Annual Revenue by $10mm in Just 3 Years (With Justin Berman—Co-Chairman at Cresset and Founder of Berman Capital Advisors)

Listen: Next Gen Success: A Masterclass in Building Trust and Credibility in a $7B Multi-Family Office (With Wen Nottebohm—Managing Director, Wealth Advisor at Cresset)

Listen: Private Bankers Find Greater Independence: Former $2B J.P. Morgan Team on Their New Chapter with Cresset (with Kevin McGuire and Sarah Burney, Managing Directors and Wealth Advisors at Cresset)

Susie Cranston
CEO

Susie Cranston serves as CEO of Cresset, an award-winning multi-family office and private investment firm. In this role, she leads the development and execution of the firm’s strategic objectives and drives scalable growth. In close partnership with founders Eric Becker and Avy Stein, and alongside Cresset’s executive leadership team, she oversees day-to-day business functions and enterprise-wide initiatives. Her leadership is guided by Cresset’s core commitment to delivering exceptional service and keeping clients at the center of every strategic and operational decision.

Susie most recently served as the Chief Operating Officer at First Republic Bank, where she was responsible for the sales, client service, operations, strategic planning, and administrative management of the First Republic Investment Management business. After the firm’s acquisition by JP Morgan Chase, Susie served as the COO and Head of Integration.

Susie originally joined First Republic in 2013 as EVP of Private Wealth Management, moving on to build one of the most successful wealth management businesses in the industry. She started her career at McKinsey & Company, where she spent 12 years consulting in various roles of increasing seniority and focused on strategy, risk management, and transformational change for financial services companies.

Active in the San Francisco business community, Susie is a “Forever Influential” honoree and three-time recipient of the San Francisco Business Times “Most Influential Women in Business” designation and a member of C200. Susie is also a board member of the Commonwealth Club. She has authored several published articles and a book on women and leadership, How Remarkable Women Lead.

Susie earned a Bachelor of Science degree in engineering and an MBA in business from Stanford University.

Kelly Wagman
Director, Head of AI Strategy

Kelly Wagman serves as Director, Head of AI Strategy at Cresset, where she leads initiatives to help advisors and teams harness artificial intelligence to enhance client service and drive business outcomes. She brings deep expertise at the intersection of human-centered design, advanced AI systems, and enterprise technology.

Prior to joining Cresset, Kelly earned a doctorate in computer science from the University of Chicago, specializing in human-centered AI. She has also worked in venture capital, focusing on AI startups, and at Microsoft, where she developed enterprise software products. In addition to her PhD, she holds a master’s degree from MIT and a bachelor’s degree from Brown University.

Kelly is a frequent speaker and writer on the future of AI in the workplace. Outside of work, she enjoys hiking and skiing, travel and exploring Chicago’s food and arts scene.

Disclaimer: Cresset and its representatives may, from time to time, appear on third-party media outlets, including television programs, podcasts, or online publications. Such appearances are for informational and educational purposes only and should not be construed as an endorsement or recommendation by the media outlet of Cresset or its services.

Cresset did not provide any compensation to, and did not receive any compensation from, the media outlet in connection with these appearances.

References to Cresset by third-party media are independent of Cresset and are based solely on publicly available information or the outlet’s own editorial discretion.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

The Modern Family Office: Cresset’s CEO & Head of AI on Building for the Future

A conversation with Louis Diamond and Susie Cranston, CEO of Cresset, and Kelly Wagman, PhD, Director and Head of AI Strategy at Cresset.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is The Modern Family Office: Cresset’s CEO & Head of AI on Building for the Future. It’s a conversation with CEO Susie Cranston and director, head of AI strategy, Kelly Wagman. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned.

And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. To download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

For a long time, the family office model has been defined by something that’s inherently difficult to scale. Highly customized advice, deep knowledge of a family, an entire ecosystem of services that can extend well beyond investments into tax and estate planning, family governance, bill pay, household management, security, and just about anything else a complex family might need.

But AI has the potential to change that equation, not by replacing the people delivering that advice, but by helping firms bring more expertise, information, and personalization to more clients and potentially expand the kind of family office experience that historically has only been available to the wealthiest families. That’s one of the ideas behind what Cresset is building today.

My guests are Susie Cranston, CEO of Cresset and Kelly Wagman, a PhD, the firm’s director, and head of AI strategy. Cresset was founded by Eric Becker and Avy Stein in 2017. And here’s a quick tip. If you do a search for Cresset in our podcast archives, you’ll find an early episode with Avy along with several from top advisors who call the firm home.

Today, the firm has grown to more than 250 billion in assets under management and advisement with more than 700 professionals in a significant infrastructure dedicated specifically to family office services. After serving in leadership positions at First Republic Bank and JP Morgan Chase, Susie joined Cresset in 2024 as president and was recently appointed CEO in March of this year.

Susie offers a perspective on what she learned from her experience at client-centric First Republic, and how that’s helped her build on the already strong foundation at Cresset. And now she’s taking on the next big thing, how AI can serve as a force multiplier for their model, a charge led by Kelly. We talk about what a true multifamily office looks like today, where AI can create real leverage for advisors and clients, and why both Susie and Kelly believe the future of wealth management will require more human advice, not less, and how AI can help facilitate that.

We also get into Cresset’s culture, its use of equity as a currency for growth and alignment, and Susie’s vision for the firm’s next decade. Because the interesting question isn’t whether AI changes the family office, it’s what the family office can become because of it. Let’s get to it.

Susie and Kelly, thank you for joining us today.

Susie Cranston:

It is our pleasure. We are thrilled to be here. Thank you for having us.

Louis Diamond:

Awesome. Susie, I’ll direct the first question to you. Can you tell us about your professional journey? I know it was a little bit different than most and how you found your way to First Republic, which I believe was your first job within our amazing industry.

Susie Cranston:

So, the first decade of my career I was at McKinsey. While I didn’t work for a wealth management firm, I did consult in the financial services space. So I spent a little over a decade after studying engineering and as an undergraduate in the wealth space as a consultant, and really decided after I’d been in McKinsey for about 10 years that it would be great to work in a company, but I believe deeply that you’re going to work for a company, it’s got to be a client first company. It’s got to be a company that has a great culture.

And so as I was looking around within San Francisco where I’m from, First Republic seemed like a great stop. And so I spent a little over a decade there building primarily our wealth management business, which was about 25 billion in AUM when I joined and about 250 billion when we became part of JP Morgan 10 years later.

Louis Diamond:

Amazing. And we’ll get into aspects of the time at First Republic. Everyone’s interested to hear more. Kelly, similar question for you. So I know we’ll spend some real time digging into AI and what Cresset’s up to on the AI front a little bit later, but can you give our audience a little bit of perspective on your background and what your role is at Cresset?

Kelly Wagman:

Sure. I’m the head of AI strategy here at Cresset. I’ve been here for about a year. Previously I did a PhD in computer science focused on AI, and I also worked at Microsoft for a number of years doing enterprise software development. So I am relatively new to the wealth management industry, but very excited about the intersection of technology and business.

Louis Diamond:

Amazing. Very succinct answer. And if you ever get stumped on the industry, AI can help you understand it better. So Susie, for you. So for listeners who maybe aren’t as familiar with Cresset, and we can’t assume they caught earlier episodes we did with some of your partners like Avy Stein and Justin Berman and Wen, how would you describe the firm today? Who’s it for and what makes Cresset different?

Susie Cranston:

Thank you. Well, so today Cresset has a little over 250 billion in assets and management and advisement. We are a nationwide firm, so we have over 25 locations nationwide and over 700 professionals delivering services that range from wealth management to institutional consulting, to family office services.

And it’s been an incredible journey. Cresset isn’t even 10 years old yet, but it has been a really rewarding one. We are, I should also mention, 80% owned by employees and clients. So-

Kelly Wagman:

Yes.

Louis Diamond:

Wow.

Susie Cranston:

… it’s a very employee client-centric story that we have always had at Cresset.

Louis Diamond:

Very cool. I remember probably, if Cresset’s been around for 10 years, maybe it was 11 years ago, sitting down with Avy Stein and Eric Becker, your two co-founders, and it was legitimately, it was an idea. There was a premise that there were no clients, there were no advisors, there were no employees, and it’s amazing to see what’s been accomplished in a decade.

700 professionals, professionals, the amount of AUM. And I think pretty much every advisor or person in the industry has at least heard of Cresset. So it’s an amazing testament to you now as the steward of the company, but also to those who came before you.

Susie Cranston:

Absolutely. I think Eric and Avy famously founded Cresset so that it was founded by clients for clients. They were both retired and that’s probably when they met with you to get your advice and perspective and really decided when they couldn’t find what they wanted in the marketplace to build it themselves.

And the fact that so many clients have followed and joined, I think is just a testament to the vision that they had and what we’re trying to build here today.

Louis Diamond:

Amazing. Maybe I’m biased from the seat doing this podcast, but I think all the best firms that have started in the last 10, 15 years, they started around a similar premise. It was either a manager, an industry executive, even an industry outsider, or in Cresset’s case, clients of financial services firms looking around saying, “Hey, if this doesn’t exist, why don’t we create it?”

And that’s their big “aha” moment is trying to think through what are the pain points that I’m uniquely capable of solving for? So it’s a really cool journey. Susie, I know we’re talking about Cresset today, but I asked you about getting into First Republic, but I mean First Republic, everyone knows the end result. But I mean to me, while First Republic was in its heyday and really until the collapse, it had an amazing client-first culture.

Advisors were super happy there. I’m sure employees are really happy. I mean, to me, that’s not something that happens by accident. So is there something you could point to about what made First Republic special? I’m sure it was more than just something in the water.

Susie Cranston:

Well, it’s interesting. It’s a great question. And I think there’s really two pieces of what made First Republic so successful, and there’s probably more to the story, but from my perspective in any event, the first is around having a very client-centric culture. And I think what everybody intuitively knows is that if you always do the right thing for the client, and you’re always delivering the very best you can for the end client, good things happen.

However, sometimes that means you do things that are short-term unprofitable or short-term against the best interest of the firm in order to deliver the right thing for the client. And I think one of the things that First Republic always got right was the idea that benefiting the client even at the short-term cost of the firm is always the right decision. And so we always could tell clients with a very straight face and a very strong conviction, that we were doing our best for them. And I think that makes a huge difference in terms of the caliber of the client experience, but also in terms of who wants to work at your firm.

And that gets me to the second part that I think First Republic did right, which is we had a very empowered client-facing set of professionals. So, if you really want to be a client-centric firm, the idea that any one manager, the idea that any management team is going to sit in an ivory tower and figure out what needs to happen and be successful, I think is a fallacy. I think the best way to be a client-centric firm is that the people who are interacting with the clients are empowered and are informing the decision-making and the strategy setting that you’re doing as a firm.

And so at First Republic, the people that worked with clients always were advising us on what we should do. They were always empowered to do the right thing. And so I think those two ingredients I have seen when those exist in a firm, that’s where you get that magic outcome because what happens over time, and we proved this out at First Republic, when you have great clients that are really loyal and have a fantastic experience, they refer friends and family that are better or equivalent clients, and you get this really wonderful flywheel to go.

Louis Diamond:

Amazing. Yeah, I mean I saw it firsthand. I would agree with you that legitimately every advisor we have replaced at First Republic, that was one of the first things they said was like, “It’s fun to work here. They listen, we have a voice.” And I know people who are clients of First Republic and the bank, it was always raved reviews about service and about just the level of care that they received.

I mean, it’s almost like, I know Raymond James and has been a competitor to yours, but I feel like that’s the way that’s been part of Raymond James’ success has been looking at the advisor as the client, empowering advisors, et cetera. And it sounds easy to replicate, right? We want to be client first, we want to empower advisors, but it’s much harder in practice from a compliance standpoint or from a responding to shareholder standpoint.

So, I think it’s amazing and I’m sure that a lot of that is what you’ve carried into your role at Cresset. How about, let’s say, a hard lesson learned? Obviously you weren’t in charge of the balance sheet of First Republic or anything else that happened, but is there a lesson that you carry from the collapse of First Republic or is there anything that it makes you watch out for now that you wouldn’t have known before?

Susie Cranston:

This will probably make some people laugh, but I have newfound religion around the idea of a fortress balance sheet. Right? So as you said, on the wealth management side, we didn’t control the asset side of the balance sheet as much, but there can be no doubt that when Jamie Diamond talks about JP Morgan’s fortress balance sheet, he knows what he is talking about.

So one of the things that I have been myopically focused on at Cresset is making sure we have an incredibly strong Fortress balance sheet because when you’re operating from a position of strength and the balance sheet, you can weather all sorts of storms and you can take advantage of opportunities in the marketplace.

But the thing that I also took away from it and has been part of what led me to Cresset was this realization that when you combine banking and wealth management, you’re opening yourself up to risk and challenge in ways that sometimes don’t seem that big of a deal, but then sometimes can be a really big deal.

So, it was interesting. I did spend time, I went from First Republic to JP Morgan, and operating in the JP Morgan environment, it’s an incredibly well-run organization and it is highly regulated as all too-big-to-fail banks are. And that has to be when you are a too big to fail bank, a big priority because you don’t get to operate if you don’t follow the regulatory requirements.

But having all of those bank regulatory requirements on top of what you can do in wealth management at an RIA does change the offering set that you can provide to clients. Right? So the biggest takeaway from me from this whole last chapter of my career was to really understand and be thoughtful about what you’re getting and what you’re losing when you’re combining different parts of businesses, because sometimes it doesn’t seem like a big deal until it does.

Louis Diamond:

Yeah, absolutely. It’s almost like it gives you the ability to be skeptical or play devil’s advocate in a way that you probably had known about before, but you didn’t really appreciate it. It’s like things were going so well, amazing reputation, doing things right by clients, crushing earnings, et cetera. But then the unexpected happens and no one ever expects the unexpected to happen, but the ones that are best prepared can weather the storm. So, it makes a lot of sense.

So Susie, after First Republic and then a stint at JP Morgan during the integration phase, I’m sure you had quite a number of options. So, why Cresset? What was your why story behind joining Cresset as a professional executive, obviously not as a founder, but what was it that you saw in Cresset that led you to it over any other opportunity or staying with JP Morgan?

Susie Cranston:

Well, I will say going back to your first question about what made First Republic special, I think having a client-centric firm where you do the right thing for clients, even if it’s against the economic interests of the firm, I think that’s the winning recipe in the professional services space.

And I say that from my McKinsey tenure, from my First Republic, JP Morgan tenure, that recipe always works if you’re really running a good business, because even if you take a short-term hit from not doing something in the short-term that you could, the benefit you get from retention, from referrals, all of that does take care of that in the long run, and it’s a better long-term business.

I also knew that a big reason why First Republic had been successful was because of its culture. As you alluded to very kindly, it was an incredible place where frontline professionals had a seat at the table. They drove the strategy, they were interacting with us every day to give us their input. And so I felt like I knew that was an incredibly successful model in the wealth management space.

And I also learned, as I spent more time at JP Morgan, that if you were going to try to deliver a really client-centric experience in a too-big-to-fail bank, which to be clear, that was the only type of banking I was ever going to do after my First Republic experience. It was either going to be too big to fail or I wasn’t going to do banking.

And as I got to know what it would mean to run a business like this in a too-big-to-fail regulatory infrastructure, I started to realize that for the ultra high net worth family office space, there was going to be an opportunity for independent RIAs to really take, not even take market share from the big institutional players, but to take all the new market share that was emerging, right?

Because we are in a period of incredible wealth creation in this country right now. I mean, there are over a hundred thousand families in the US alone that have more than a hundred million dollars net worth. Even if you did an inflation adjusted look back 20, 50 years, the number of people that have this much wealth has never been seen before in the history of our country.

And so, what really brought me to Cresset was this platform that was incredibly client-centric because it was founded by clients for clients. It had been built in a really robust manner and had the balance sheet strength that I was looking for, and had the ability to deliver these services that this incredible emerging wealth was going to need.

Because what we’re really seeing right now in the market, which is so fascinating, is that as people have more and more wealth to manage and it’s more and more complicated, they need that integrated bill pay, tax advice, estate planning, and family governance and education. Right?

All the things need to be provided by an integrated provider or someone’s going to just build their own family office. And so those kind of market needs and those realizations were what made Cresset a top choice. And I admit that as I was looking in the space, there weren’t a ton of places that checked all those boxes. And so, I had a very famous conversation with my mom where I said, “Mom, I’m not sure what I’m going to do if Cresset doesn’t end up hiring me,” but fortunately it did end up working out.

Louis Diamond:

And knowing Avy and Eric, I’m glad you didn’t tell them that. It would’ve hurt your leverage and the negotiations.

Susie Cranston:

Our right to negotiate. No, they were great.

Louis Diamond:

Awesome. Kelly, I want to shift some of the attention to you. I noted in your… And I think it’s a new title, it’s Head of AI Strategy Director. What does that actually mean? So are you actually developing your own custom AI tools for Cresset and its advisors, or is it more about, let’s come up with a strategy for how the firm is going to deploy and leverage AI into the future? What does the title mean to you?

Kelly Wagman:

It’s a good question, and I think I can actually speak to the evolution because I think the role has evolved. So I think of the first step of any strategy being that enablement piece. So I came in really focused on enablement, which meant to me, empowering people to use these new tools.

And I think what we realized as we started doing that is that that’s great, but we also needed to be understanding what our use cases were, prioritizing them, starting to build out or look for vendors for particularly complicated things, thinking about our data strategy. And so, my role evolved into this more strategy focused role as we realized we needed to think a little bit bigger picture about AI at Cresset.

Louis Diamond:

Very cool. And at Cresset, and I always try to square this because I know every company’s different, but is it that the strategy is we’re using Claude and we’re using ChatGPT and whatever else, or are you actually building your own AI tools, or maybe it’s a combination of the two?

Kelly Wagman:

Yeah, we are definitely building things. We are not building foundation models. We’re not out to replicate ChatGPT or Claude. We are using those tools.

But then there are more complicated use cases. You can think about particular operations workflows, or people talk about things like meeting prep or these things that we do want to provide a standardized version to people. So we’re building those. And then we’re also, we use some vendor partners in places where that makes sense as well.

Louis Diamond:

It makes sense to me. Susie, question for you. I’ve heard the term, “We’re a family office,” or, “We offer family office services” everywhere. It’s almost like water in this industry. Everyone on some website has said it or mentions it, or if you ask them what they do, they say, “We offer family office-like services,” or, “We are a family office or a multifamily office.”

So, obviously I know with Cresset, it’s more than just a buzzword. I think last I read, there’s over 150 people just in the family office group alone out of over 700 professionals. So, what do you believe a real family office looks like? What are the services that are being provided, and how does what Cresset provides as a family office or multifamily office differ from a number of other firms that just really like their clients and maybe they work with some larger ones so they can throw the word around?

Susie Cranston:

So, what really differentiates Cresset is that we have been doing this and investing in this, and building this from day one. So, we have a deep infrastructure across all the elements of family office services that a client might need. And the way to differentiate it that I found when I was looking around at other options several years ago was just ask firms, “How many dedicated people do you have to family office services?” Right?

Because a lot of places talk about it, but when you ask how many dedicated professionals, the answer is like, “Well, we got a few here, a few there.” And we have a hundred advisors and 150 people doing family office services. So, when you’re talking to clients about the depth of coverage that we can provide and you’re trying to demonstrate credibly that you can take care of the family’s full range of needs, we have a very competent, compelling, detailed story to tell.

And the reason I think this is so important is that because there’s so much wealth being created, there is new populations of people who need support that never needed support in the past and there’s no existing infrastructure for them. At the same time, we’re seeing a decline in the supporting functions for family offices. So the number of people graduating from accounting to programs is down 50% over the last eight years.

So you’re seeing the population of supporting professionals is dwindling, getting harder to find, and the demand for this shrinking supply is growing. Right? And so having capability that you can really meaningfully deliver to support families is really important because even the biggest family offices in the country, the biggest names everybody would know if I said them, those family offices don’t do everything in-house themselves because of privacy reasons, because of business continuity reasons.

So, there is a really important relationship between being able to deliver family office services and being able to advise and support the wealth of those families. And that has been something that Eric and Avy understood from day one, and so we’ve always invested in that. And listen, it’s a tough choice to make, I think, when you’re starting a business because you have to build out the infrastructure before it’s fully profitable.

So, we had to make a very hard choice. Eric and Avy made a hard choice to take that cost on before it was fully profitable, but that has then translated into incredible success. And to tie it into Kelly, who I just have to say we are so fortunate to have, she is a complete star and she’s very modest, but she’s just done amazing work at Cresset.

And one of the things that we are also able to do with our knowledge of Family Office is when you have 150 practitioners at Family Office, you can start to say, how do we leverage AI to bring bill pay in an affordable way to clients that have a $20 million net worth? Or how do we do the taxes in an automated way leveraging AI for clients that have 20 million?

And you can really start to scale those services. And that’s actually really important when you’re working with families because the matriarch or the patriarch of the family may have hundreds of millions, billions of dollars, but maybe some of the children haven’t inherited it yet. So you’ve got to support the full family where they are at, and AI is going to be a tool that really enables that scale.

Louis Diamond:

It’s such an interesting use case for AI. And maybe Kelly, you can elaborate. The fact that Cresset has these, I would assume very expensive, very knowledgeable professionals that are working with the top tier of clients, but being able to use AI to take their intellectual capital and what they’re doing at the high end and scaling it to kids or to smaller clients, can you weigh in on that use case and how it’s shaping out at Cresset right now?

Kelly Wagman:

Yeah, I think a lot of the promise of AI is actually being able to build things on top of integrated data. Once you do that, there’s a lot of unlock that you have. So we spent a lot of time working on how do we get our data into a place where we can start to build some of these things.

But I think that also does unlock at the higher end where you can still have very customized bespoke white glove services, but people can get their questions answered more quickly, advisors can spend more time on those client interactions, you can have higher levels of personalization. So I think we spend a lot of time on getting this core platform so that we can then expand use cases in both directions.

Louis Diamond:

It’s so interesting. When you’re thinking on behalf of Cresset about do we build something ourselves or do we go buy some AI tool off the shelf, whether it’s like a Jump AI or a CogniCor, or some add-on from Addepar or the various tech vendors, how do you think about the trade-off between you and your team building it specifically for Cresset versus buying something off the shelf and maybe customizing elements of it?

Kelly Wagman:

I think there are two pieces of that. One, I think we need to continue to own our data. Again, I think the data part is very valuable, so I don’t want to have a product that’s going to somehow take that data and make it not accessible to us. And then two, a lot of it comes down to whether the thing is well offered and how customizable it is.

I think in this era, people are building software in ways that is more customizable and faster to iterate on. And so if a vendor is building something that is the thing that we want and they’re willing to customize it to us, I think that’s great. If there’s something that just doesn’t exist yet or that we really need to build ourselves, we can also look at that.

But in a regulated industry, I think we need very robust software. So, working with vendors, especially on some of these kind of critical areas, is important for that.

Louis Diamond:

Awesome.

Susie Cranston:

If I can just add one thing onto that, Louis, I think one of our theories of the case is that given how regulated our industry is, that the AI rollout has to be much more controlled and thoughtful in our industry than it would in something like software, because you can’t have an AI tool that’s overriding compliance features or that’s doing something accidentally that then puts the firm at risk. Right?

So that’s part of what I think all of our competitors and we are really being mindful about.

Louis Diamond:

No doubt about it. Susie, back to the family office question. I think another kind of knock on the term family office is people think it’s like, “Oh, we walk our client’s dogs,” or, “We pick up our client’s dry cleaning.” Maybe that’s part of your answer, but when you look at the services that Cresset provides in its family office, what are the top couple that are the most valuable, or maybe even take another direction, the most out there that clients have requested that you’re now offering?

Susie Cranston:

So we think about our family office services in two categories of offerings. There’s the wealth strategy piece, and that’s things like the estate and tax planning, the family governance and education. It’s really all the kind of thoughtful planning pieces that you want to put in place to effectively manage your resources. And then we have wealth administration, which is a day-to-day management and oversight of all the trappings that go with your assets, bill pay, tax, all the kind of travel planning and logistics.

Another big one is household payroll and household management. Oftentimes wealthy people start to accumulate quite a few different professionals that help them in different capacities, and managing that starts to become a lot of work. You have to manage all the tax pieces, you have to manage the payroll administration, you have to make sure you’re filing all the right documents and following all the right compliance rules in all the different states that you operate in or countries.

And then multiply that times you got the yacht going all over and the pilots for the plane going all over. So the complexity of these families multiplies quite quickly. And so I would say the top service that everybody seems to want and we get the most requests for is probably some combination of tax and estate planning, which is part of wealth management in general, but then double clicking to the next level.

But family governance and education is a huge focus for a lot of clients. How do they think about raising their children, their grandchildren in ways that don’t allow, that mitigate any potential issues coming from having so much wealth and letting them take advantage of the resources that the family has created? There’s a lot of complex family dynamics that emerge when you’re dealing with wealth.

The number one way that wealth is created, as many of us know in this industry, is through owning and operating companies. Ownership of companies is the wealth creator that drives everything in the United States. So, when you think about all of a sudden you’ve got cousins, aunts, uncles, all sorts of different people trying to manage a company together, trying to manage a family business together, having processes and systems and support for how to do that effectively while maintaining the family relationships is really important.

So that’s another big one that we get, as well as they’ll pay household administration. That’s just something that a lot of families want help with. But an out there example is security. Right? So we have helped clients exit Israel after the issues that happened there. We’ve helped clients get out of Ukraine when Russia initially invaded. So, there’s all sorts of things involved in being a family office.

But if you can’t deliver those services, then the families have no choice but to build their own family office and then the whole benefit of what you’re trying to provide for them is moot. So you do have to be able to accommodate a range of needs.

Louis Diamond:

It’s crazy. Yeah. I mean honestly, I wish one day I had that much money where those services are made available to me or maybe through Kelly’s work, they will be soon. But it is quite the investment that Avy and Eric made. And I was going to ask a question, but I think you already answered it about what did Avy and Eric get right in the beginning that’s overlooked. I’ll ask it, but I would have to answer first and say really investing, building out a massive organization in very expensive areas before a dollar of client assets came.

Would you agree or would you have a different answer?

Susie Cranston:

No, I’ve thought about this a lot. What is it in what Eric and Avy did that made it so differentiated? And I think you’re spot on, Louis. What Eric and Avy had going for them that I think is often overlooked is they were successful and retired when they started this. So they had all the experience and all the knowledge of decades of being successful, executives, entrepreneurs, founders, and they were okay already.

They were set. They could have just stayed retired. And so when they created this business, they didn’t have the pressure of this being the make or break thing for their families. And it allowed them, I think, to really be expansive, do what they thought was right, prioritize the long game as Eric would say, in ways that I think are harder to do if your family’s really all riding on this one thing.

Louis Diamond:

Yep. On the other hand, it’s if you’re retired and successful, why are you trying to create stress in your life?

Susie Cranston:

That’s the DNA of Eric and Avy. They are very hardworking.

Louis Diamond:

Love it. Susie, another question for you and then I’ll turn it back to Kelly. So from First Republic, just you have to live under a rock in this industry to not respect the fact that there’s so many different firms, types of firms, business models that a successful advisor, a team, an independent RIA, could opt to partner with.

You can go to sell to an aggregator, you can sell a minority stake in your business, you can launch your own RIA, you can affiliate with a supported independent platform, go to an IBD, go to a wirehouse, probably 50 different types of options. Forget about all the different firms underneath it. So when you’re recruiting or looking to win an M&A deal, what’s your honest case for why Cresset over any other option that so

David Bahnsen, Founder & Managing Partner, The Bahnsen Group

From $600mm to $10.5B, David Bahnsen built The Bahnsen Group almost entirely through organic growth. He shares the decisions behind that growth, the value of reinvesting in the business, and why selling to longtime partner Hightower became the right next step.

In Summary

David Bahnsen left Morgan Stanley in 2015 with eight people and $600mm in client assets, motivated less by dissatisfaction than by what he calls being “intoxicated by the idea of freedom.” Eleven years later, The Bahnsen Group has grown to $10.5B in assets, 106 employees, and 13 offices—with virtually all of that expansion driven organically.

But the more instructive story is how that growth happened. David explains how original content and thought leadership became a powerful source of new business, why attracting clients only matters if the firm can deliver an experience that keeps them, and how continual reinvestment in people, tax, planning, investment management, and family office services helped turn a founder-led practice into a national enterprise.

He also shares the thinking behind his decision to sell The Bahnsen Group to Hightower after more than a decade of working within its ecosystem. The transaction gives the firm greater resources for technology, HR, supervision, and future inorganic growth while allowing David to maintain control over the brand, P&L, strategy, and client experience.

The Storyline

When David Bahnsen first appeared on the Diamond Podcast in April 2020, The Bahnsen Group was five years removed from its Morgan Stanley breakaway and had grown from $600mm to roughly $2B.

Today, the firm manages $10.5B across 13 offices with more than 100 employees.

The numbers are notable, but David’s approach to building the business provides the real lessons.

Rather than pursue acquisitions, The Bahnsen Group built an organic growth engine around content, thought leadership, and a distinct investment philosophy. David’s Dividend Cafe now reaches roughly 35,000 subscribers organically, but he is clear that attracting prospective clients was only half of the equation. The firm continually invested in the people, capabilities, and services necessary to deliver on what the content promised.

That philosophy extended to how David structured the business. He chose to keep functions that created what Louis describes as “surplus value” inside the firm while relying on Hightower for areas such as supervision, regulatory support, and technology. At the same time, David resisted the temptation to maximize current margins, instead investing in advisor capacity, planning, tax, investment management, family office capabilities, and infrastructure.

The result was a business with significant organic growth and enterprise value.

Now the story enters its transact phase. After years of operating within Hightower’s ecosystem, David agreed to sell The Bahnsen Group to Hightower. Yet the transaction is less an endpoint than another evolution of the model: Hightower becomes owner while David retains substantial operating autonomy and gains resources to professionalize the firm further and supplement its organic growth with carefully selected acquisitions.

It’s the full Build, Grow & Transact arc—and an example of what can happen when independence is treated as the beginning of building a business rather than the destination.

Topics Covered

• How The Bahnsen Group grew from $600mm to $10.5B
• Building an organic growth engine through content and thought leadership
• Why attracting clients is only the beginning of sustainable growth
• Reinvesting profits to build long-term enterprise value
• Creating advisor capacity without sacrificing the client relationship
• Deciding what capabilities to own versus outsource
• Why maximizing margins can limit the business you ultimately build
• The evolution of David’s relationship with Hightower
• Why Hightower became the natural buyer of The Bahnsen Group
• Preserving autonomy and continuity after a transaction
• Balancing organic growth with future acquisitions
• Why independence can be a starting point rather than an end goal

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Why freedom – not dissatisfaction – drove the breakaway. [04:44]
David explains why he left Morgan Stanley despite being successful and well served there. The appeal was ownership: the ability to control how the business operated, how clients were served, and what the firm could ultimately become.

How authentic content became an organic growth engine. [09:34]
What began as written market updates during the 2008 financial crisis eventually evolved into Dividend Cafe, books, television, podcasts, and other thought leadership. David explains why the content works precisely because attracting clients was never its primary purpose.

Why attracting clients isn’t enough. [15:59]
A strong content engine can create interest, but the business still needs to deliver. David describes the continual investment in planners, tax capabilities, investment management, family office services, and client experience that allowed the firm to retain and serve the clients its content attracted.

Knowing what creates “surplus value.” [22:03]
David and Louis discuss the importance of identifying what a firm does exceptionally well and what is better handled by an outside partner. For The Bahnsen Group, that meant keeping investment management, business development, branding, and the client experience close while outsourcing functions such as supervision, regulatory support, and technology.

Why maximizing income and building enterprise value are different objectives. [25:08–35:26]
David explains why he has continually reinvested in the firm rather than optimizing margins, while Louis connects that philosophy to a recurring Build, Grow & Transact theme: owners willing to sacrifice some current income can create capacity, growth, and greater enterprise value over time.

How the advisor role changes in a scalable enterprise. [29:15]
With advisors limited to roughly 80 households, The Bahnsen Group surrounds them with planning, tax, estate, operations, marketing, content, and business development resources so they can concentrate on client relationships. David also explains why he believes the industry has more of an “opening business” problem than a closing problem.

Why Hightower became the buyer. [37:09]
David wasn’t looking to sell. He explains why maintaining control over the brand, P&L, hiring, strategy, and business was non-negotiable—and how Hightower structured a transaction that preserved that autonomy while adding resources the firm needs for its next phase.

Why inorganic growth is now entering the picture. [44:01]
At $10.5B, the law of large numbers changes what 30% growth requires. David explains why acquisitions will become a supplement to—not a replacement for—the firm’s organic growth engine, with cultural fit playing a critical role in the strategy.

Why independence was always the beginning. [50:51]
David never viewed breaking away as the achievement itself. Independence gave him the ability to build the business he envisioned, and he now sees the Hightower transaction as the beginning of another phase of that journey.

Key Takeaways

Organic growth is more than business development. The Bahnsen Group’s content creates awareness and opportunity, but its growth has been sustained by building the capabilities necessary to deliver an increasingly sophisticated client experience.

Enterprise value often requires sacrificing current income. Hiring ahead of need, expanding services, creating capacity, and investing in infrastructure may compress margins today while building a stronger and more valuable business over time.

Scale should support relationships, not replace them. David rejects the idea that client relationships themselves can be scaled indefinitely. Instead, the firm scales the resources surrounding its advisors so those advisors can remain focused on clients.

Outsourcing can be a strategic advantage. The goal is not necessarily to own every capability. David’s approach is to retain the functions where the firm has passion, expertise, or differentiation and leverage outside scale for others.

The right transaction can preserve what already works. David’s decision to sell was contingent on maintaining meaningful control over the brand, strategy, P&L, and operating model rather than changing the formula that created the firm’s growth.

Organic and inorganic growth don’t have to be competing strategies. The next phase will combine The Bahnsen Group’s existing organic engine with selective acquisitions designed to add scale without creating a collection of disconnected businesses.

Independence is a means, not necessarily an end. The larger lesson from David’s story is that independence created the freedom to build. What mattered afterward was how that freedom was used.

https://youtu.be/_s8MFJtrbS0

Quotable Moments

“I was very intoxicated by the idea of freedom.” — David Bahnsen [04:44]

“Relationships don’t scale.” — David Bahnsen [29:15]

“Twenty cents of something big is a lot more than 40% of something small.” — David Bahnsen [33:31]

“I did not want to go to independence as an ending point. It was a beginning.” — David Bahnsen [50:51]

FAQs

How did The Bahnsen Group grow from $600mm to $10.5B?

The firm’s growth was overwhelmingly organic. David attributes much of the business development engine to original content and thought leadership, supported by continual investment in advisors, planning, tax, investment management, family office capabilities, and the broader client experience.

How did content creation contribute to The Bahnsen Group’s growth?

David began writing regular market commentary during the 2008 financial crisis. After becoming independent, he developed that work into Dividend Cafe and expanded into books, television, video, and podcasts. Dividend Cafe now has approximately 35,000 subscribers, which David says were acquired organically.

Why does David Bahnsen believe in reinvesting in a wealth management business?

Rather than maximizing current profit margins, David has invested in people and capabilities when he believes they will improve the client experience or create a better environment for advisors. His philosophy favors building a larger, more durable enterprise over extracting the maximum amount of current income.

Why did David Bahnsen sell The Bahnsen Group to Hightower?

David says he was not actively looking to sell. The transaction became attractive once Hightower was willing to preserve the firm’s autonomy while providing additional resources in areas including HR, technology, AI, supervision, and future inorganic growth.

Will The Bahnsen Group continue to operate independently after the Hightower transaction?

According to David, the firm will operate as a wholly owned independent subsidiary. He expects to retain authority over the P&L, hiring and firing, strategy, branding, and other core aspects of the business while drawing more extensively on Hightower’s resources.

How will The Bahnsen Group grow after the Hightower transaction?

David expects organic growth to remain the foundation. However, as the firm becomes larger, he plans to supplement that growth with selective acquisitions and advisor additions that fit The Bahnsen Group’s system and culture rather than simply aggregating assets.

What can financial advisors learn from David Bahnsen’s independence journey?

His experience illustrates the importance of defining what independence is intended to accomplish. For David, leaving the wirehouse was not the destination; it provided the control necessary to invest, create, hire, build services, and develop an enterprise around the client experience.

The firm’s growth was overwhelmingly organic. David attributes much of the business development engine to original content and thought leadership, supported by continual investment in advisors, planning, tax, investment management, family office capabilities, and the broader client experience.

David began writing regular market commentary during the 2008 financial crisis. After becoming independent, he developed that work into Dividend Cafe and expanded into books, television, video, and podcasts. Dividend Cafe now has approximately 35,000 subscribers, which David says were acquired organically.

Rather than maximizing current profit margins, David has invested in people and capabilities when he believes they will improve the client experience or create a better environment for advisors. His philosophy favors building a larger, more durable enterprise over extracting the maximum amount of current income.

David says he was not actively looking to sell. The transaction became attractive once Hightower was willing to preserve the firm’s autonomy while providing additional resources in areas including HR, technology, AI, supervision, and future inorganic growth.

According to David, the firm will operate as a wholly owned independent subsidiary. He expects to retain authority over the P&L, hiring and firing, strategy, branding, and other core aspects of the business while drawing more extensively on Hightower’s resources.

David expects organic growth to remain the foundation. However, as the firm becomes larger, he plans to supplement that growth with selective acquisitions and advisor additions that fit The Bahnsen Group’s system and culture rather than simply aggregating assets.

His experience illustrates the importance of defining what independence is intended to accomplish. For David, leaving the wirehouse was not the destination; it provided the control necessary to invest, create, hire, build services, and develop an enterprise around the client experience.

Related Resources

The RIA Builder’s Blueprint

How the Freedom to Communicate During a Crisis and Beyond Translated to 4x Growth for this ex-Morgan Stanley Team

Mentioned in This Episode

Dividend Café
The Bahnsen Group
Hightower

David L. Bahnsen
Founder, Managing Partner, and Chief Investment Officer

David L. Bahnsen is the founder, Managing Partner, and Chief Investment Officer of The Bahnsen Group, a national private wealth management firm with offices in Newport Beach, New York City, Bend, Nashville, Minneapolis, Austin, Phoenix, West Palm Beach, Dallas, and Grand Rapids, managing over $10 billion in client assets.

Prior to launching The Bahnsen Group, he spent eight years as a Managing Director at Morgan Stanley and six years as a Vice President at UBS. He is consistently named one of the top financial advisors in America by Barron’s, Forbes, and the Financial Times.

He is a frequent guest on CNBC, Bloomberg, Fox News, and Fox Business, and is a regular contributor to National Review. He hosts the popular weekly podcast, Capital Record, dedicated to a defense of free enterprise and capital markets. He writes a weekly macro commentary at dividendcafe.com.

David is a founding Trustee for Pacifica Christian High School of Orange County and serves on the Board of Directors for the Acton Institute, National Review, and Hightower Advisors.

He is the author of several best-selling books including Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (2018), There’s No Free Lunch: 250 Economic Truths (2021), and Full-Time: Work and the Meaning of Life (2024). His newest book, Profit from the Profit: The Past, Present & Future of Dividend Growth Investing, was released in August 2026.

David’s true passions include anything related to USC football, the financial markets, and politics. His ultimate passions are his wife of 24 years, Joleen, their children, Mitchell, Sadie, and Graham, and the life they’ve created together on both coasts.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Build, Grow & Transact: David Bahnsen on Building a $10.5B Business Worth Selling

A conversation with Louis Diamond and David Bahnsen, Founder & Managing Partner of The Bahnsen Group.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: David Bahnsen on Building a $10.5B Business Worth Selling. It’s a conversation with the founder and managing partner of the Bahnsen Group. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

There’s a big difference between breaking away to create a better version of the business you already have and breaking away because you see an entirely different business you want to build. And I think that distinction becomes even more important as we look at what creates real enterprise value in the wealth management industry today.

My guest, David Bahnsen, is a pretty remarkable example. David first joined us in April of 2020, five years after leaving Morgan Stanley with eight people and 600 million in assets. At that time, the Bahnsen Group had grown to roughly two billion. Today, it’s a $10.5 billion business with more than 100 people and 13 offices across the country.

Perhaps the most interesting part of that growth story is that virtually all of it has been organic. David didn’t build the firm by buying AUM. He built it by creating an authentic voice, an incredibly effective content engine, investing heavily back into the business, adding services clients actually wanted, and being very deliberate about what his team should own versus what was better outsourced. There’s a lot in that playbook for any advisor who wants to build a business with real enterprise value.

But David’s story also gives us something we often don’t get to examine, the full build, grow, and transact arc. For more than a decade, Hightower went from employer to service provider while David maintained ownership and control of the business. Now, the Bahnsen Group is being sold to Hightower, giving David additional resources to pursue the next stage of growth while preserving much of what made the firm successful in the first place.

So we get into the decisions behind that extraordinary organic growth, why maximizing current income can work against building long-term enterprise value, how David thinks about content, clients, and scale, and ultimately why someone who was once intoxicated by the idea of freedom decided the next right move was to transact. It’s a great case study in what can happen when independence becomes a starting point rather than the destination. So let’s get to it.

David, thank you for coming on our show again.

David Bahnsen:

Well, it’s wonderful to be back with you. I love listening to the show every week.

Louis Diamond:

Oh, there you go. Just flattering us now. So for anyone who probably, myself included, doesn’t remember the last time you were on our show, it was April of 2020, a time warp into a crazy time. It was the five-year anniversary of your breakaway in the very, very beginning of the pandemic. Then you still had an amazing business, two billion in assets. But for listeners who may have missed it, and even just to catch us up, can you give us the quick version of your origin story of leaving Morgan Stanley in 2015 with 600 million and eight people and why you did it, just the speed round of compressing a stressful and very important time in your business arc?

David Bahnsen:

So I was one of those people that in an almost cliche, typical way, the types of folks that your business deals with all the time, left because I wanted independence. I wasn’t unhappy at Morgan Stanley. I wasn’t in need of any particular change, but I was very intoxicated by the idea of freedom and became very committed to the idea that if I were going to run my own business, I needed to run my own business.

It started in 2014. We made our official exit in early 2015. And as you said, there were eight people, all of which were folks on my team at Morgan Stanley and 600 million of client assets, and we basically moved 100% of that.

When I was on the podcast, April 2020, it’s funny when you were saying that, I can visualize myself at my home office at that point in time in Southern California recording this. And we would’ve been our five-year anniversary, couple billion, so we had a little bit over tripled. We probably had, if I remember correctly at that time, 25, 30 employees. And it’s interesting the linear arc of it, because you fast-forward now, we’re at 10.5 billion and 106 employees. And so it’s just proportionate, the AUM and the headcount and the time gone by, it’s been a very nice, steady arc.

But I really loved the idea of being independent. I turned 40 years old in 2014 when I began the extensive due diligence that led to me leaving Morgan Stanley. And it really was that moment that I said, “If I’m going to stay as a corner office guy at a wirehouse, I will stay at Morgan Stanley forever.” I had no issues there. My manager at the time is still, to this day, my best friend in the world. We’re like brothers. I just dedicated my new book to him. I wasn’t unhappy with Morgan. I just liked the idea of having my own business and haven’t looked back since.

Louis Diamond:

Amazing. Seems like it was probably a pretty good move based upon what you shared, but I think it’s an interesting perspective because I feel like I’m starting to see that more and more is the profile of the advisor who doesn’t have these intense pain points and is relatively well served, is going to be successful, knows how to operate at their firm, but they just want something more. There’s an intangible that staying isn’t going to solve for them. For many, it’s being a business owner, like the path you took. For others it’s, hey, I just want to be recharged. I don’t want to be static. I want something different. I want to monetize. I want to work in a bit of a different way.

I think you’re early on that trend, to be honest with you. You were probably right in the middle, even probably even the beginning innings of the independent movement, and I am very excited to dig into how you got from 600 million in 2015 to over 10.5 billion, 11-ish years later. So let’s jump to today, and we’ll spend some time going through dissecting that growth. But today, like you said, 10 and a half billion under management, 100 plus people, 13 offices, including Santa Barbara where you just opened, but Newport Beach, New York City, Nashville, Tennessee, Palm Beach. It’s a real national firm. And I read that you’ve grown over 30% organically over the last decade. So when you look at the firm now versus 2015, what stands out the most? Let’s really dive into that.

David Bahnsen:

Well, a lot of this is where we’re going to end up going later in the conversation with where I see the next iteration of the company. But when you talk about the last 10 years, it has been the textbook definition of organic growth. There are 13 offices open and zero of them came by acquisition or merger or purchase. We’ve hired two or three advisors out of our 26 advisors that had a little bit of a book, but I mean under 100 million. We never paid for it. I’m talking about hiring people.

But you’re looking at an organic story, and I am proud of that, but I also recognize that it wasn’t intentional. And what I mean by that is I didn’t have this strategy in 2014, ’15 where I said, if I can just go independent, I have this evil genius behind me that is going to drive a mousetrap that will get me up to 10.5 Billion.

I’ve been as surprised, as many outside observers, but I have a lot of gratitude for it. I understand now why it has worked, and I think that there are people inside of our business that are a little more qualified to understand how the business works than people who are outside of it. Your consultants and professional investors are very smart at what they do, but they don’t necessarily always understand that advisor-client dynamic. And I get why we’ve been successful with it. But I also don’t want to take credit for it as if it were this master strategy. We just tried things and those things that worked, we kept doing more of, and this is where we are.

A lot of it, and I spoke to Mindy about this six years ago, it’s been content creation, thought leadership, and the voice that, much to my surprise, has attracted people and never doing it for the purpose of attracting people. This very natural and sincere delivery of a belief system about markets, about the economy, about the world around us, I share things sometimes about my faith, politics in a public square. I’m on television, this podcast.

And then the major driver is the written word, which some people might be shocked to hear as we’re talking about a podcast still even exists. But my weekly Dividend Cafe, which is my weekly market commentary, is up to 35,000 subscribers, 100% organic. We’ve never done anything to get any subscribers. And our video and our podcast and everything, the books I write, the television hits, they all have their audience. But most of it goes through that written word. That’s where I get to connect with people that if they like me, they may end up becoming a client. And if they don’t, they won’t, but that’s really been our story though.

Louis Diamond:

That’s absolutely amazing. There’s so much to unpack there. That amount of growth without anything inorganic, especially the way this industry is going, I don’t think I’ve ever heard that before. That’s amazing in and of itself. But just the way you can track back your meteoric rise to content creation, I think for many listening, it’s either, “Oh my God, that seems so daunting and so crazy.” Others would be like, “Well, I can’t do that, but that sounds great. Of course, he’s been able to grow because he can have an original voice.”

As a firm that puts out a lot of original content, podcasts written, Mindy wrote a book, white papers, et cetera, I know the amount of work and dedication and commitment it takes to stick with that for so long. So if you don’t mind, can we double-click into that written word story? How did you get started with it and what’s been the arc or the growth journey? Someone who’s listening who would love to do that, where did you get started? You didn’t just all of a sudden have a book and show up on TV. How did you get started?

David Bahnsen:

In the truest sense of the word, I grew up loving writing. My father died in his 40s and I was only 20, but he was an intellectual, a brilliant writer, had several books, and I was a nerd in high school. Luckily, I had basketball so that I could still meet a girl here and there and have friends on the team. But I mean, if it were up to me, I would’ve been home reading books and writing papers, and I would turn in extra credit papers more than I would study for a test because I loved writing. So the written thing was there. I don’t know if I was ever good at it or not, but I know I loved doing it, and I would credit my late father with the early seeds of that.

When the financial crisis happened in September, the actual week of Lehman’s bankruptcy, September of ’08, about three, four days later, Morgan Stanley’s credit default swaps were blowing out, and now it was not just the market was crashing every day. And of course at that point, Merrill had gone down, AIG had gone down. We were in this cascade, and everybody who lived through it remembers it all well. I remember every detail of it like it were yesterday.

But all that happened was once I got my 80th call about what the hell was going on with Morgan, I decided to write up a piece, not send it to compliance for approval and send it out to everyone. And if the firm was at risk of not making it for another day, I wasn’t especially worried about compliance getting mad at me at the time. And I did that, and then a couple days later did it again, just broad update on everything going on, and I never stopped doing it. That’s what it was, just every Friday since September 2008.

And then when we left Morgan, at some point along the way I started getting compliance approval and getting a bit more of an audience. We had hundreds of clients that were reading it, and we’d have a few guests that would ask to be signed up as clients were forwarding it around, but that was it. It didn’t have a website, it didn’t have a subscribe feature, it wasn’t a real blog or anything like that.

So then in going independent, I was able to incubate it, and we branded it as Dividend Cafe. We’re Dividend Growth investors at my firm. So we put a brand around it. We had a website, and I think we started a podcast and video that was becoming a very large medium around the mid-tens as well, and so we added that shortly later, but it was just because I had the freedom to do it.

And then I did do some hit on CNBC like Asia or CNBC World or something. It wasn’t anything with a big audience, but then we sent the clip to someone at Fox and they really liked it, and then they had me, and then I started getting invited more regularly. So now the TV thing was happening, and I always say that TV can be a really good thing for a very small number of people. Obviously, Josh Brown has been incredibly successful with it. He’s very good at it, and it’s done okay. It’s done well for me, but it’s different than people think.

You do not go on TV and then get done and all of a sudden the phone rang and someone said, “I saw you. You’re so handsome. I want you to be my advisor.” What it does is it might drive them to other content. It might drive them to the internet where they’re going to find other things about you. And if my name was David Johnson instead of David Bahnsen, I think I would’ve got lost in the SEO and nothing would’ve come of it. I really believe that. But it enabled some people that liked what they heard on TV to start following me in other more substantive and perpetual mediums.

And then in 2017, I wrote a book that I wouldn’t have been able to write at Morgan Stanley. I had very strong opinions about the origins of the financial crisis. And I did not believe the left-wing narrative that it was caused by unfettered markets, and I didn’t really believe the right-wing narrative entirely either that it was exclusively caused by government intervention. I believed that all of those things were true but were missing this cultural and moral component about Main Street. I wrote a book on it and I thought there might be 200 clients of my firm that would read it, and it ended up being a bestseller, and that created more television invitations and just to a slightly larger audience. And at this point now, I realized that all of these things were dovetailed together, content, the mediums, coming to Dividend Cafe, coming to an authentic point of view about markets.

And then, and this is the thing that is so important because of what you do and do so well in your business and within the kind of practitioners that listen, it wasn’t enough to have a mousetrap that drew people to us. We had to keep them. We had to deliver an advisory experience, and so we were just relentlessly reinvesting back in the business, adding planners, adding tax, adding more investment sophistication, family office, just improving our business, and that’s why we’ve added so much to headcount because we have just constantly wanted to really be what we were attracting people to.

Louis Diamond:

It’s amazing. The key themes I heard there, there’s a lot, but is it’s not one thing that works. It’s a coordinated strategy. I can attest to that for the content work that we do. There isn’t one single point of growth that comes from content creation. It’s everything working together. You don’t know, especially in this day and age, how people consume information or how a message gets across to them, whether they’re a reader, whether they find you in AI, whether they watch video, whether they saw CNBC in their barbershop. So I think that’s absolutely amazing, and congratulations.

Let’s talk a little bit about your breakaway setup, if you will. So when you broke in 2015, you signed on with Hightower, but in a bit of a different way, certainly different than today. You paid Hightower an override on your revenue, or basis points and assets, to be on their platform. But you owned 100% of your business, ran your own P&L, and they provided certain services to you. Thinking back to 2015, and then even up until your recent decision to sell to Hightower, why did you structure it that way rather than under their brand or as an employee or even just having your own RIA, especially given your size and scale?

David Bahnsen:

There’s actually one piece missing there. You may not have known, but I think is important to the story. When we came in 2015, we were employees and they had a 50/50 net model, and we joined in that capacity. And then when they recapped in 2017, brought a new investor on, eventually changed CEO about a year later, at that point, we were growing. I felt very comfortable with the independent space. I now knew what I didn’t know. I knew what I thought they did well, and I knew what I thought we could do well, and I took advantage of that moment to say, “Guys, I need to be on my own. We need to run our own firm, our own finances, our own payroll, our own brand.” And what the investors wanted at that time was some sort of affiliation that they could count on and not be vulnerable, but I didn’t want to sell and I wanted full control.

So I got control, much better control than I had had in my first couple years, and they got a extension of agreement of these services that they could feel good I was going to be a part of their ecosystem. And the cash flows were pretty meaningful as we grew from, at that point, a billion to over 10 billion, and we became obviously a very meaningful contributor to their earnings and revenues.

And the CEO who came in was the second CEO in the history of the company. And they now have a third, but that individual, Bob Oros, I knew well because he had been at Fidelity when I chose Fidelity as our primary custodian. Bob and I got along very well. And so over the years, there’d be things that we had impediments that we had to work through, and we worked through them just like adults, like businessmen and women and got stuff done. So it was a good relationship.

But we were really quite independent. Very few of my people that worked at Bahnsen Group even knew who Hightower was because we had our own brand, we had our own investment process, the HR, the payroll. And unlike a lot of the other platform teams, they didn’t have too many platform teams, but ours, the accounts payable were massive. I mean, we had to have a whole finance department just because of our growth. So it became a difficult thing for them at this stage to have such a meaningful company within their ecosystem not aligned and not harmonized within the economic model of the rest of the firm. But I would say that decision for 2017 until this year, I don’t regret it at all. Hightower doesn’t regret it at all. They benefited immensely from this growth we’ve gone through, and I very much desired that freedom.

Look, if I’m being very candid, Louis, you brought up why didn’t go on my own ADV? At the time in ’14 and ’15, I didn’t know enough. I didn’t understand. And I met with Focus, I met with Dynasty, I met with some others, and you just meet with different people, hear the stories, and the one I went with was Hightower, and there’s pros and cons to all the models. It’s one of the things I wasn’t joking at the beginning. I listen to your guys’ show every week. I’m a sucker for everything happening in our industry. I hear the stories of different successful advisors, and every one of them resonate with me in one way. There might be nine ways it doesn’t resonate, but one way that does because there’s always something that each person’s looking for that some of us can connect with.

And at the time, I didn’t know what I didn’t know, but I felt good about the Hightower story, went in that path, and I would argue that we got the best of all worlds in that 2017 to 2026 story because we really got to function independently. We were under their corporate RIA, but other than that, felt very independent. And that’s a testimony to Hightower that they honored that autonomy, but I think it gave me the entrepreneurial thing I needed, and I’m grateful for it.

Louis Diamond:

Fantastic. So let’s say from the 2017 to 2026 timeframe when you decided to finally sell to Hightower, how did you weigh the leverage that outsourcing certain things provided your business versus paying a fee, obviously, more than what it cost Hightower and not having complete and utter control over your business? How do you track that to your growth, if at all?

David Bahnsen:

The criteria was always anything we like doing or are good at doing, we’re going to do it, whether Hightower offers it or not. So for example, I’m sitting here in a beautiful office. We have the 31st floor of a building on 54th Street and 6th Avenue, and Hightower has a whole facilities department. We’ve done 13 office leases with no involvement from their facilities department because my wife loves designing the offices. She’s an interior designer. My team loved picking our own locations. I didn’t find negotiating with a broker all that hard. So we were able to do it, we liked it, so we did it.

But then the supervision side, the regulatory side, and candidly, a lot of the technology side, which is where some of our talk is about to go in terms of the new transaction, those things I felt more comfortable outsourcing to Hightower who had entire departments and resources geared towards it. And we would do them if we had to, but we weren’t passionate about it. I didn’t want to go understand all the nooks and crannies of the regulatory apparatus. So that was part of their ecosystem, and we were happy to utilize their services there. Investing money, financial facilities, the business development mousetrap we built, those things we were good at, and so we held onto that, and that’s how we viewed the division of labor.

Every firm, RIA, IBD, a wire, W, it doesn’t matter. Everyone who optimizes this challenge of doing what you like and not doing what you don’t like is going to grow. It’s hard to do. It’s easier said than done, but that’s the challenge right there.

Louis Diamond:

I absolutely love that. I think it’s so true, knowing what’s actually going to add surplus value relative to the amount of time you’re doing versus what’s commoditized or back of house or isn’t something that lights you up. Because there’s plenty of RIAs that I’ve interviewed or that I know where they enjoy building technology, they like designing their own compliance organization, and to them, that’s their superpower. That’s what makes them different.

For you, it sounds like it was very clear. You knew exactly what you wanted to do. As long as you’re able to still do it, you’re very comfortable with outsourcing certain things that would’ve been a distraction or something that you and your team weren’t world-class at.

I want to talk a little bit about some of the deliberate choices you made to take the business from, I would assume it was you as the rainmaker, and now you said you have over 25 advisors. So just thinking about hiring, structuring the business, investing in the business and platform, because I’m sure you’ve had the temptation, maybe not because you’re a business builder, but I think a lot of people love, “Hey, I can make a ton of money if I don’t make that second, third, 125th hire, and instead I just take cash flow. I don’t necessarily need this person. I can make more money or distribute more to my partners.” So I’d love to hear a little bit about some of the deliberate choices you made on hiring and investing in your business.

David Bahnsen:

There’s two things that I am very hesitant to take credit for, even though they’re true. You had mentioned before when we left in 2014 that we were early innings of wirehouse defections to the independent movement. I was early, but I wasn’t a first inning guy. The real trailblazers were going in 2006, 2007, 2009. 2014 is a lot earlier than those that have gone in the last two or three years, but I was like a third or fourth inning guy, and I don’t deserve credit to be a first inning guy.

The other issue is that I reinvest in the business constantly and have not been greedy about maximizing all the margin, but that is easy to say once you’ve already scaled the business, right? You’re already in a place where things are going very well, and then from there, deciding you just really want to run the business the way you want to run it. It’s not as selfless a decision as people may think. It was a luxury.

And at the same time, I cannot tell you how bizarre I think it is when people are focusing on maximizing margin versus running the business that they want to have. It’s a high-margin business. There is not a lot of operating leverage in it. More or less, not completely, but more or less expenses go up in proportion to revenue. Particularly for us opening new offices and hiring a lot of new people, our biggest overhead far and away is people. And we started an ETF a couple years ago and I got a chance to learn the polar opposite where my business has tons of pricing power and very little operating leverage and asset management has unbelievable operating leverage. I basically have zero dollars of expenses on my next dollar of revenue, but no pricing power.

Louis Diamond:

So interesting.

David Bahnsen:

Yeah. I mean, it really is just two different business models. When we have hired more people, we’ve always done it based on are we going to serve our clients better and enjoy running our business better with these people? We don’t want wasteful positions, but we want the maximum optimization for how to service clients and how to give advisors an ecosystem to function in. So a one-to-one operations to advisor, having planners that are not the client-facing advisor themselves, but are devoted to the behind the scenes planning process. Having a full tax department that does not provide tax services to non-wealth clients, that is only there, a robust tax consulting, tax preparation, tax advisory arm to drive a better client experience for us. These things all erode at margin, and I wouldn’t do it any other way. And the biggest thing, by the way, is the investment management, because then you’re not just talking about profit margin. We’re talking about time.

I am a 3:45 AM guy every day because we’re inside markets. We have analysts, traders, investment folks. I think it’s something like 10 or 11 people on the org chart. It costs me millions of dollars a year for us to manage money in-house. There’s no justification for that other than it’s what we want to do, what we believe in. And those that have a outsourced Vanguard DFA-type model, I have no criticism of it in the world, but it just wasn’t us, and so we had to do what we liked doing.

Louis Diamond:

Yep. And once again, the authenticity shines through.

Can we talk a little bit about the financial advice part of the business? I would assume when you’re at Morgan Stanley, you were probably the driver of growth, you were serving personally probably every client or just about all of them. Today, with 10 and a half billion, 25 advisors, just the immense scale of the organization, how do advisors advise? Are you still providing financial advice to clients directly? Are you more of just the CEO, the rainmaker, the strategist? I mean, how do you think about, I guess, allocating clients to your advisors? How have you grown your capacity for financial advice?

David Bahnsen:

So our leverage is entirely limited by my ability to find like-minded advisors who can go deliver our client experience and be in relationship to clients. It’s why I’m not a big believer in this notion of scalability. I think technology helps scale. I think there’s all kinds of processes you can do more efficiently, but it’s a relationship business and relationships don’t scale.

And we have an internal policy philosophy preference, if you will, that no advisor will cover more than 80 households. And so for us to continue growing at the number of households, number of AUM, and therefore number of revenues, all those numbers, of course, have some proportionate relationship with one another, we have to have the advisors to do it.

And so as we find advisors that can not drool on themselves and be professionals and deliver an experience to clients, we want them to be generalists. We want them to be very good at what they do, but we don’t want them entering trades. We don’t want them doing their own operations work. We don’t want them having to pick stocks. We’re providing this ecosystem of the tax, the planning, the estate, the operations, the content, the marketing, and the biz dev. They don’t have to go try to rainmake at their kid’s soccer game or join the chamber of commerce or things like that. That we believe we have enough internal biz dev opportunity that what they need to do is cultivate the relationships with the prospective clients we give them.

They do have to close that business, but our industry, for all of the talk about this, people diagnose it wrong. We do not have a problem with closing business in our industry. We have a problem with opening business. And so the sourcing is the issue. And for whatever reason, it’s a mystery to me, it’s been a mystery for 27 years, I’ve been pretty good at sourcing business. And so we can share that with our advisors and then expect them to, their job when they wake up and go to bed and everything in between is to be in relationship with clients.

Louis Diamond:

If I think about, just think of 20 highly successful RIAs and think of some of the biggest and best names in the space, I think a critical connection point or commonality for all those firms is they’ve somehow figured out lead flow or some mechanism or capacity to bring in clients for their advisors. To me, that’s the truly only scalable way to keep adding advisors and growing a business is if there’s enough inbound lead flow that’s cultivated or created by the firm to really feed all the different advisors, and it’s not snap our fingers and it happens.

But if you compare that to many other models, the wirehouse model where it’s all on the advisors to go out and find clients, that’s great. And if you find some amazing rainmakers, amazing, and it’s additive, et cetera, but you eventually hit a ceiling because it’s hard to find advisors who have that knack. You’re not bringing in the ideal client every time, and it’s an unpredictable way to grow.

So I think I wouldn’t gloss over the fact that you’ve been able to create enough inbound traffic or lead flow through all of your content and thought leadership that you’re able to sustain that type of model. Because it is the best way to grow a business is keep your advisors focused on just being advisors, solve for organic growth, solve for the other things they have to do. And then when you open up a new market or hire an advisor, boom, you got capacity, you got someone trained up, and it’s predictable, your close rate and your ability to scale it from there.

So I’ll get off my soapbox, but I think that’s such an important element of the biggest and best and most valuable firms in our industry today.

David Bahnsen:

I agree with you a thousand percent. And even if you put numbers around it, somebody who has to go make their own rain and service the client, they will expect, if you use wirehouse-like grids around it, this is just round numbers, I know you could turn a knob a little bit, but I view the business as more or less it costs something in the range of 40 cents of a dollar revenue to run the business. There’s 20 cents available to the owner, 20 cents to the person who makes rain and 20 cents to the person servicing the client. It’s back of napkin math.

If you are a wirehouse advisor, you’re making the rain and servicing the client, you’re getting two of the 20 cents, you’re getting 40 cents, let’s say. And if you’re the person who owns the business and makes the rain and is the advisor, you can make 60 cents on the dollar. That’s a wonderful margin, and you cap out at a certain level where you just cannot grow any further. I would rather make 20 cents on where we are now. My advisors would rather make 20 cents on where they are because 20 cents of something big is a lot more than 40% of something small. And again, and my numbers are, I’m rounding, but you get the idea. That’s really the kind of business model we’ve done here.

Louis Diamond:

I think it’s brilliant. And some would argue about the percentages and would say, oh, it costs 40 cents to 30 cents to run a business and we have a small team, but I think philosophically that’s exactly right.

And I think something you said too, which is there’s been a common thread in our “Build, Grow, Transact” series. You think about Jason Fertitta of Americana Partners or Matt Kilgroe from Cyndeo and many others that we’ve had or will have, it’s really playing the long game. No one we’ve had on the show is optimizing for how much money can I make this year, next year or the year after. It’s the intentional decisions to invest in capacity, invest in growth, and by choice take less as the owner of the business, but doing it because what you’re building is enterprise value that will sell at a dramatic multiple of that growth and have room to run.

So I think that’s the big thing is, again, it sounds easy, it sounds great, but it’s not an easy decision to say, “Hey, I’m going to make less money today and over the next few years because I want to hire the next person or invest in an organic growth funnel.” That’s discipline, for sure. But I think it’s a great takeaway for anyone listening is play the long game, invest where it makes sense, and the riches will follow you later. They don’t have to follow you today or tomorrow.

David Bahnsen:

And it’s a whole business of playing the long game, not only in the value creation and enterprise value of being independent. But even for wirehouse advisors, I remember back as I was entering the business, that debate about fee-based business versus transactional, and all it was, are you going to play the long game or get more money quickly? There’s temptations in both ways. There’s goals, there’s overhead, reality. Anyone who played the long game in that story from 30 years ago benefited immensely. And now you see it, of course, in what we’re talking about here, playing the long game in the way you run your business has just been the smartest thing anybody could do.

Louis Diamond:

Absolutely. Especially in this industry where each new client that’s brought on, there’s a lifetime value of a client. That success compounds with market appreciation, with them adding new monies, and then ultimately they’re going to give you referrals hopefully. And then over time, that’s where the real money is. It’s the compounding nature of doing the next right thing rather than, we’ll say, taking a shortcut or not making that investment in the business.

I have a ton more questions for you on this topic, but I want to spend enough time on your important decision to sell the business, sell the Bahnsen Group to Hightower in April of 2026. So after more than a decade of being an employee of Hightower, being affiliated with them but really owning your own business, you decided to not just sell the business, but to sell it to the very platform that you’re operating on. So can you just talk about that decision? Why was 2026 the right time? Why did you decide to stay with Hightower rather than any of the other 100 acquirers or a random private equity firm that would love to buy a business that’s growing 30% per year?

David Bahnsen:

It’s interesting to think about as our deal gets ready to close here at the end of September, if I had gone out and run a process, if I was looking to sell, would I have been interested in conversations with others? And I don’t know the answer to that because I wasn’t looking to sell. There was nothing broken, in my mind, in what we were doing. But when Hightower and her investors came to me, the entire conversation centered not around what we needed and wanted to be a seller, but on what we didn’t want or couldn’t have.

And I’ll share the story because I haven’t shared it publicly with anyone. As we were having conversations about a variety of things in the relationship between Hightower and the Bahnsen Group and Hightower’s investor and so forth, there were a couple of different meetings and things and we ended up having a pretty significant meeting in person in their conference rooms here in Midtown. And I’ve had seven eye surgeries, and I have challenges with my eyes and there are all these numbers up on a screen in the conference room. I couldn’t see any of them.

And it occurred to me that there was an offer on the screen they wanted to buy the business. We had not discussed that. And I turned to the folks and said, “I don’t really know exactly what it says, but I just want to make something very clear to save time and drive our conversation constructively. There’s no amount of money that I would sell for if I can’t be fully in charge of what we’re doing. Our brand, our business, our autonomy is what I care most about. If there’s a way to have that, protect it, enhance it and do a commercial transaction, I’m open to it.” And I didn’t really think that would be possible, but I will say to their credit, they did not want to interfere with that autonomy and what they believe to be a successful formula inside our company at all.

And so while they’re doing a lot right now to build their Hightower Signature Wealth brand, both internally and externally, and

Michael Kim — CEO & President, AssetMark

AssetMark CEO Michael Kim explains why advisor growth increasingly depends on creating capacity—and using outsourcing, technology, and AI to spend more time where advisors add the greatest value.

In Summary

Growth is a priority for nearly every advisory firm. But as client expectations expand and the business of wealth management becomes more complex, growth increasingly depends on an advisor’s ability to create capacity.

Jason Diamond speaks with Michael Kim, CEO and President of AssetMark, about why the strongest firms are intentional about where advisors spend their time—and equally intentional about what they delegate, outsource, or automate.

Drawing on AssetMark’s work with more than 12,000 independent financial advisors, Michael shares his perspective on organic growth, outsourcing investment management, AI, client experience, scale, and the evolving role of the advisor. His central message is straightforward: Advisors can do almost anything, but they can’t do everything. Sustainable growth requires deciding where they create the greatest value and building the business around it.

The Storyline

Michael Kim calls himself a “growth guy.” But his definition of growth goes well beyond adding assets, buying another practice, or simply getting bigger.

After working with thousands of independent advisors throughout his career at Fidelity and AssetMark, Michael sees organic growth as one of the clearest measures of the health and durability of an advisory business. And the firms that consistently achieve it tend to have something in common: They treat growth as an intentional business priority rather than something they hope will happen.

That creates a more fundamental question: Where should advisors actually spend their time?

Michael argues that clients increasingly value the advisor—not simply the portfolio. They want guidance around taxes, wealth transfer, estate planning, business decisions, and the broader issues surrounding their wealth. Yet delivering that level of advice requires capacity. AssetMark’s Annual Impact of Outsourcing Survey, he says, finds that advisors who outsource gain more than nine hours per week—essentially another working day.

AI potentially adds another layer of leverage. Michael sees its opportunity in two areas: productivity and experience. AssetMark’s developing Talk Tracks capability, for example, uses AI to prepare potential talking points and planning opportunities before client meetings. But Michael also cautions against allowing technology to depersonalize the relationship. As clients themselves become more informed through AI, the advisor’s ability to deliver deeply personal, trusted guidance may become even more important.

That brings the discussion back to growth. Advisors are increasingly both trusted counselors and business owners. Building a scalable enterprise means making deliberate decisions about technology, outsourcing, talent, client experience, and where their own time produces the greatest return.

Topics Covered

• Organic growth in wealth management
• Advisor capacity and productivity
• Outsourcing investment management
• AI in wealth management
• AssetMark Talk Tracks
• Advisor client experience
• The advisor as “wealth counselor”
• Scaling an advisory firm
• Fee compression and operating leverage
• RIA growth and independence
• M&A and access to capital

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

What separates advisory firms that consistently grow from those that plateau? (12:36)
Michael says the most successful growth-oriented firms are intentional about growth. They develop a plan, experiment with new approaches, and—most importantly—execute consistently.

Why does Michael consider organic growth such an important measure of an advisory business? (15:27)
Organic growth is not simply about adding clients. Michael describes it as a predictor of the health and durability of the business—something that also matters to potential investors and buyers.

Should investment management still be a core part of an advisor’s value proposition? (18:42)
Michael argues that clients increasingly want something broader: a trusted “wealth counselor” who can help them navigate taxes, wealth transfer, estate planning, and other complex financial decisions.

How much capacity can outsourcing actually create for advisors? (23:05)
According to AssetMark’s Annual Impact of Outsourcing Survey, advisors who outsource report gaining more than nine hours per week. Michael argues that time can be redirected toward clients and higher-impact business activities.

Where does Michael see the greatest opportunity for AI in wealth management? (25:34)
He identifies two areas: productivity and experience. AssetMark is embedding AI into advisor workflows, including its Talk Tracks capability designed to surface insights and potential planning conversations before client meetings.

Could AI make the advisor-client relationship less personal? (30:12)
Michael acknowledges the risk but sees a larger opportunity. As clients arrive better informed through AI, advisors can differentiate through more personal, emotionally connected guidance around the issues that matter most.

How should advisors think about scale as fee pressure continues? (41:12)
For Michael, scale does not simply mean cutting costs. It means using technology, people, outsourcing, and other resources to deliver a better client experience more efficiently.

Where would Michael invest first if he were running an independent RIA? (43:11)
Existing clients come first. Before M&A or other growth investments, he would invest in making the client experience stronger and the firm easier to do business with.

Key Takeaways

• Growth requires intention. The firms Michael sees growing most successfully do not treat growth as a side project; they plan for it, invest in it, and consistently execute against it.
• Organic growth is a measure of business health. Beyond adding assets, it can signal the durability and potential enterprise value of an advisory firm.
• Capacity has become a strategic advantage. Advisors need to determine which activities require their direct involvement and which can be delegated, outsourced, or automated.
• The advisor’s value proposition is expanding. Portfolio management increasingly sits alongside tax planning, wealth transfer, estate planning, and other advice that clients expect from a trusted “wealth counselor.”
• AI should create better conversations, not simply greater efficiency. Michael sees the bigger opportunity in using AI to improve both productivity and the client experience.
• Scale is not synonymous with cost-cutting. Strategic investments in technology, talent, and outside expertise can allow firms to serve clients better while managing economic pressure.
• Client experience remains the foundation. Even when presented with opportunities to pursue M&A or other investments, Michael would prioritize strengthening relationships with existing clients first.

https://youtu.be/vqlWGWAD08o

Quotable Moments

“Growth isn’t something that the advisors do as a hobby. It is arguably the number one priority.” — Michael Kim, 13:18

“Organic growth is the number one predictor of the health of the business.” — Michael Kim, 15:27

“The most important thing that the clients want from that advisor is the advisor, not the portfolio or which ETF that they selected.” — Michael Kim, 19:23

“The advisors can do anything, but they can’t do everything.” — Michael Kim, 23:05

FAQs

Why is capacity so important for financial advisor growth?

Advisors face expanding client expectations while still having a finite amount of time. Michael Kim argues that creating capacity through outsourcing, technology, AI, and delegation allows advisors to spend more time on client relationships and the activities that have the greatest impact on growth.

What does Michael Kim believe drives organic growth for advisory firms?

He emphasizes intentionality, planning, creativity, and consistent execution. Rather than treating growth as something that happens naturally through referrals, successful firms make it an ongoing business priority.

How can outsourcing investment management help financial advisors?

Outsourcing can shift research, portfolio management, trading, reporting, technology, and other functions to providers with greater scale. Michael says AssetMark’s Annual Impact of Outsourcing Survey found that advisors who outsource gain more than nine hours per week.

How is AssetMark using AI for financial advisors?

AssetMark is embedding AI into advisor workflows with the goal of improving productivity and client experience. Michael discusses Talk Tracks, a capability designed to surface relevant client insights and potential planning conversations before meetings.

Will AI replace financial advisors?

Michael does not believe it will. Instead, he expects clients to use AI themselves and arrive at advisor meetings better informed. That could make an advisor’s ability to provide trusted, personal, emotionally connected guidance even more valuable.

How can advisory firms scale without sacrificing client experience?

Michael describes scale as more than lowering costs. Firms can invest in technology, specialized personnel, outsourcing, and other resources that allow them to operate more efficiently while improving the quality and breadth of the client experience.

Advisors face expanding client expectations while still having a finite amount of time. Michael Kim argues that creating capacity through outsourcing, technology, AI, and delegation allows advisors to spend more time on client relationships and the activities that have the greatest impact on growth.

He emphasizes intentionality, planning, creativity, and consistent execution. Rather than treating growth as something that happens naturally through referrals, successful firms make it an ongoing business priority.

Outsourcing can shift research, portfolio management, trading, reporting, technology, and other functions to providers with greater scale. Michael says AssetMark’s Annual Impact of Outsourcing Survey found that advisors who outsource gain more than nine hours per week.

AssetMark is embedding AI into advisor workflows with the goal of improving productivity and client experience. Michael discusses Talk Tracks, a capability designed to surface relevant client insights and potential planning conversations before meetings.

Michael does not believe it will. Instead, he expects clients to use AI themselves and arrive at advisor meetings better informed. That could make an advisor’s ability to provide trusted, personal, emotionally connected guidance even more valuable.

Michael describes scale as more than lowering costs. Firms can invest in technology, specialized personnel, outsourcing, and other resources that allow them to operate more efficiently while improving the quality and breadth of the client experience.

Related Resources

When Growth Starts Working Against Your Business

The RIA Builder’s Blueprint: Four Pillars of a Strong Independent Firm

Michael Kim
Chief Executive Officer and President of AssetMark

With more than 30 years of industry experience, he has set the strategic vision for the firm, which encompasses AssetMark’s platform of curated investments, technology solutions, business consulting, operations support, and M&A that serve the best interests of financial advisors and their investors.

Michael joined AssetMark in 2010 and has held a number of leadership positions, including Head of National Sales and Consulting, Chief Client Officer, and President / CEO (2021–Present). Michael was instrumental during AssetMark’s leveraged buyout transition to Genstar in 2013, its sale to Huatai Securities in 2016, its IPO in 2019, and its sale to GTCR in 2024.

Before joining AssetMark, Michael was an executive at Fidelity’s Institutional Wealth Services, serving over 3,000 advisory firms. He began his career in public accounting at Coopers & Lybrand, LLC.

Michael received his Bachelor of Arts in Economics from the University of California, Los Angeles.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Unleashing Potential: Why Capacity is an Advisor’s Biggest Competitive Advantage

A conversation with Jason Diamond and Michael Kim, CEO & President of AssetMark.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Unleashing Potential: Why Capacity Is an Advisor’s Biggest Competitive Advantage. It’s a conversation with Michael Kim, the CEO and president of AssetMark. I’m Jason Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002. Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

One of the biggest challenges facing advisory firms today isn’t finding more opportunities, it’s creating enough capacity to pursue them. For years, advisors have tried to solve that problem by working harder, adding staff, or becoming more efficient. Today, technology, outsourcing, and AI are creating an entirely different playbook. The question isn’t simply how to do more, it’s how to spend more time doing things that actually matter. That’s why I’m excited to welcome Michael Kim to the podcast. Michael is CEO and president of AssetMark. Founded in 1996, it provides some 12,000 independent advisors and registered investment advisors, RIAs, with outsourced investment strategies, AI tools, and digital workflows, custodial integration, and practice management consulting. Over the last 16 years, he’s had a front row seat to the evolution of independent wealth management and has developed a reputation as what many know him as the growth guy.

And Michael’s perspective is a practical one. He doesn’t think about growth as simply gathering more assets or acquiring more firms, he sees it as building an intentional business, one where advisors spend more time where they add the greatest value while leveraging technology, outsourcing and AI to expand their capacity without losing sight of what matters most, delivering an exceptional client experience. Our conversation covers where advisors should and shouldn’t be spending their time, why organic growth remains the best measure of a healthy business, how AI can strengthen rather than replace client relationships, and why the advisors who thrive over the next decade may look much more like CEOs than portfolio managers. I think you’ll come away with a different way of approaching growth, and perhaps more importantly what it actually takes to achieve it. So, let’s dive in. Michael, thanks again for joining us. Before we dive into the business, let’s talk about the personal.

Tell us about your background, what brought you to the world of wealth management.

Michael Kim:

Yeah, first of all, Jason, thrilled to be here. Thank you for having me, I’m looking forward to our conversation. My goodness, what brought me to this industry? There’s several reasons. First and foremost, I love working with other people and specifically in a position where we can help others. How fortunate are we, Jason, where we get to work with, in my opinion, the best financial advisors where their core mission is to help others, and specifically helping their clients’ goals and dreams come true, and we get to be part of that? And just for me to be and our teams to be part of that, that is just humbling and exciting. That’s one of the big reasons. Let’s see, I love working with the business owners and entrepreneurs. I have a little bit of entrepreneurial gene, both of my parents are entrepreneurs as well. So Jason, I know you could appreciate that.

Working with entrepreneurs, and for me it is all about relationships. Really being able to build deep, personal, professional relationships where we can learn off of each other, help each other, and really do good for clients, the community, and the industry. My goodness, what a perfect industry to be in. I mean, those are just some of the reasons that brought me to this great place. I’ve been with AssetMark for, gosh, now 16 years. Just still feels like day number one here, Jason, but I know we’ll get into a lot more details, but so many different things that have brought me here to this industry.

Jason Diamond:

Wow, 16 years. I definitely want to double click into that. I’m sure you’ve seen the firm evolve a lot. By the way, I feel like you feel, what a blessing and what an amazing industry. Of all the industries in the world and of all the kind of verticals and niches, I just think it’s such an incredible, not only industry, but an incredible time in our industry. Part of that is the proliferation of choice for advisors, and how many different ways there are for an advisor to run a sophisticated, successful, entrepreneurial business. No matter what that could mean within a wirehouse, by the way. I don’t mean that to mean independent. So, I want to talk about all of that. I think your perspective is unique. Whole career at AssetMark or did you start elsewhere? That’s the last question we’ll ask on background.

Michael Kim:

Yeah, so like I said, 16 years here at AssetMark, and I’ve had pretty much all the different leadership responsibilities here. I became president and CEO a few years ago. The other interesting part of my journey here at AssetMark is over that 16-year period, Jason, five different owners. My goodness, five different sort of capital providers and owners and investors coming into the business. We’ve had the fortune of working with large strategic firms to great private equity firms. We even took the company public, so we did the whole New York Stock Exchange, ringing the bell and the whole nine yards. And in 2024, we took the company private again, and we’re just super excited. Our current owner is GTCR, just incredible private equity investors, partners, friends. And we’ve actually known those guys for a number of years before the deal. And through series of different conversations, it was just the right fit.

And we’ve been with them for over two years now, and I just feel like we’re just barely scratch the surface, Jason, in terms of all the different things that we can do with them. And let’s see, prior to AssetMark, I was with Fidelity, we were talking a little earlier, and that’s where I cut my teeth. And I had a chance to work with RIA firms, I was managing all the RIA wealth management relationships at Fidelity for a number of years, spent a big portion of my Fidelity tenure in Boston, as all roads go through Boston for Fidelity.

Jason Diamond:

We’re going Boston, baby.

Michael Kim:

Exactly. And Jason, you know what’s really interesting is I started with Fidelity back in the late ’90s, and back then, my goodness, people really didn’t know the RIA industry. We’d have to remind them it’s RIA, not IRA, that whole nine yards. And it’s just really special to see the RIA and the independent industry just grow to what it is today and just really making that impact to the clients. I know we’ll dig into a lot more of those details. And then actually prior to Fidelity, I’m a CPA by training. So, I’m a recovering CPA, as I like to say, and no accounting jokes, Jason, today here. All right?

Jason Diamond:

I didn’t prepare any. No promises though. A couple things I want to ask you about. First of all, position the positives of the various owners you’ve had. That sounds also though potentially disruptive, 5 different owners in 15 years. Thoughts on that? And then, the other thing is not a question, more of a compliment. I always think people of Fidelity Schwab in the ’90s, early 2000s, part of me feels like you must want to say a little bit like, “I told you so. We were right about this call and this movement.” So, if you want to use this platform to do so, you’re welcome to.

Michael Kim:

Well, it’s funny, I’ll take the second part of the question first. It is interesting just reflecting back on the earlier days of the RIA industry. Back in the ’90s, I mean, it was such a cottage industry. Most of our time was really spent on educating not just advisors but other players in the industry about what it means to be an independent, trusted, fiduciary advisor to the clients. And again, in this day and age, Jason, I mean that is just part of our everyday vernacular.

Jason Diamond:

You take that for granted.

Michael Kim:

Exactly. But back then, educating the advisor that, yes, they get to control their own destiny and they get to own the economics. And most importantly, they get to really control the client experience and helping that client really fulfill their goals and dreams and the outcomes that they’ve been working together on. And so, really having that type of both a advisory discussion but also a business discussion, it’s just been super fulfilling. And I too have learned quite a bit just in terms of what it means to be both a business owner and an advisor. But that’s one of the big things that we’ve all experienced, especially in the earlier days and as this industry continues to mature. Even back then, Jason, I saw the potential and it was interesting.

I remember thinking to myself, “My goodness,” not just the wires and the banks and other brokerage firms, but really again, going back to the benefit to the end client, that investor to have that trusted advisor where there was no conflict, that advisor was sitting on the same side of the table as himself and really doing what was clearly in the best interest of the client. Again, today it’s part of our DNA, part of what we talk about, but back then it was a newer concept. And so, we just feel very humble to have been part of that in the early days. I think your first question was about the different series of owners and investors that we’ve had. And again, as I reflect back on this, Jason, five different firms. We had a life insurance company, we had private equity, actually two different PE firms come together for joint ownership.

We actually had a foreign brokerage firm that owned us for a number of years, and then also the being publicly traded and now being private again. My view, Jason, is that every type of capital structure, there’s pros and cons, but two things that I want to just maybe share with you and your audience is that first and foremost, regardless of the capital structure, it really is incumbent on the management team to do what’s in the best interest of the client. Again, it’s a no-brainer, but really reminding your teams that do always do what’s in the best interest of the client, and then you execute to the T and the rest should usually take care of itself, number one. And then number two, what we’ve learned is never forget about the culture of your firm.

Regardless of, again, the capital structure and the type of priorities that different owners, investors ask you to focus on, absolutely those are important business priorities, but none of that would be possible, Jason, without the right culture, and really all the different employees and colleagues and teammates growing in the same direction, Jason. And again, we’ll get into a lot more because there’s actually a great level of parallel in terms of the lessons that we learn to what we’re seeing in the advisor community as they’re operating their own businesses. So, I know we’ll unpack a lot of that, but those are just some of the themes that I recall as I think about our journey here.

Jason Diamond:

That’s a really thoughtful answer, thank you. I want to ask you a question on clarifying. You used the term clients. When you think about your clients, you are talking about financial advisors who in turn are serving their end clients. Is that correct?

Michael Kim:

That’s right.

Jason Diamond:

Let’s talk about this. You’ve worked with, whether it’s Fidelity or now the last 16 years I would imagine thousands of advisors, probably mostly independent advisors. And growth, at least today is the number one thing in our conversations that comes up of advisors that want to grow. What do you think separates advisors who are able to grow from those who are not, or are less effective at it?

Michael Kim:

Yeah, great question. So just by the way, context, today at AssetMark we work with over 12,000 individual financial advisors, and at Fidelity, thousands of independent RIA firms. And so, we’ve been very fortunate to have seen, Jason, a lot of different models and best practices. And to your point about growth-

Jason Diamond:

And worst practices.

Michael Kim:

Well, we’ll keep it best practices here, and lots of incredible lessons learned as well. Jason, what’s interesting is I think one of the common threads that we see in the most successfully growth-oriented firms has been the advisors and their teams are intentional about growth. And what I mean by that is growth isn’t something that the advisors do as a hobby. It is arguably the number one priority. In fact, we have a saying here at AssetMark that growth is life. And if you’re not growing, you’re dead. So, a big part of the focus is, okay, how do we put the right plan together? A simple thing like a marketing plan. I mean, Jason, it is amazing the opportunity that we have to help advisors really craft their own marketing narrative and the unique capabilities that they bring. So, let’s talk about it and let’s figure out ways to leverage that secret sauce to drive referrals and other new opportunities.

And so, really having that intentional focus starting with a marketing plan. And to me, I always suggest to our advisors that let’s get creative. Let’s not try to do the same old things and keep banging our head against the wall. Let’s try new things, let’s learn from it, let’s fine-tune it. I mean, things like digital leads and really leveraging the social media aspect. Most advisors still are not, I would say comfortable or confident in leveraging the digital platforms or different channels. To me, this is a huge opportunity for advisors, for other enterprises to leverage the digital platforms to get their word out and really leverage that in a way to drive new opportunities. And then the third is execution. My goodness, you can get creative, you can have all kinds of great marketing strategies, but if you’re not executing and doing the things that you say you’re going to do, and do it right and do it again the next day, it’s all for show.

And so, we always talk about how do we help our advisors come up with the best marketing strategy, get creative in some of those ideas, and then let’s go roll up our sleeves and let’s go execute, let’s really bring those great ideas to reality, and let’s figure out a way to fine-tune it, sharpen it, do it better, and the next day do it all over again. And just being intentional, Jason, to sum it all up, I think is a huge part of what growth is all about. And I guess last thing I’ll mention here is, Jason, you know this, but I just can’t stress this enough. Organic growth is the number one predictor of the health of the business. I’m speaking from experience. I mean, the five different owners and the capital provider changes that we’ve experienced, one of the key things that they’ve always asked for and we’ve demonstrated in the early parts of our conversations is our ability to grow the business. That organic growth, again, it is a huge part of that strategic business consideration.

Jason Diamond:

Well, I totally agree with that. There’s an element of organic growth is probably the number one predictor of a healthy, vibrant business. And also to your point, because some advisors say, “Okay, great. Who cares? My business is good enough for me.” But to your point, a buyer cares about it so it impacts valuation as well. You gave a really thoughtful answer as to the question of growth and intentionality around growth, I maybe should have started here. Your answer was broader than I maybe expected, so give us the elevator pitch for AssetMark. What does your company do?

Michael Kim:

Yeah, so at AssetMark we are in the business of serving independent financial advisors as the premier wealth platform. We focus on delivering the best investment experience with the most integrated digital technology and the most personalized service and experience. The last thing that we always talk about is really the community of like-minded advisors that we support. As I mentioned, we are fortunate to serve over 12,000 plus individual financial advisors in the independent space. And we talk a lot about community. And the reason for that, Jason, is in many cases the advisors are out there on the island to themselves and they are wondering about things like growth. And so, what we try to bring in is really a lot of the peer-to-peer type of learning, opportunity for different advisors to connect with one another, learn from each other, and really sharpen their value proposition or their narrative.

And so that community aspect, it is something special. And we actually have many advisors, Jason, where it’s the third generation advisor that have been working with AssetMark that have been connecting with one another. When you go to some of our conferences and events, I always like to say it is the industry’s largest study group out there. And so, we get to be part of that and we get to host that. And so anyway, that’s a little bit about the AssetMark store, we are in business of serving independent financial advisors.

Jason Diamond:

I think there’s a lot of different elements of that value prop that we can talk about, but the one that I think is probably most closely associated in the market is investment management. Let’s talk about investment management, or more specifically the idea of outsourcing investment management to somebody else. Because especially for wirehouse advisors, I think there’s this perception, real or not, that’s a core part of what an advisor does. And I’ve seen the statistics, I know that most advisors are not particularly good at investment management, but they’ve sold their clients on this is a part of what we do for you, financial planning, investment management, and the like. So, what say you? What are your thoughts on the idea that investment management has to be a part of the core financial advisor experience?

Michael Kim:

Yeah. No, totally get it. And I mean, we have thousands and thousands of conversations about this very issue. And Jason, you’re right. I mean, so many advisors believe that their value to their clients is about building the best 60/40 balance portfolio. And with all that in mind, in this day and age with technology and really accessibility to the different investment products and strategies, what advisors have to realize is that the most important thing that the clients want from that advisor is the advisor, not the portfolio or which ETF that they selected. The number one thing, and this is based on the most recent spectrum survey, the number one thing that particularly the higher net worth investors, what they ask and what they expect from their advisors isn’t a investment product or a portfolio design, it’s actually advice on taxes and wealth transfer. Think about that.

They want to know how that advisor is going to help them optimize their taxes, they want to know how the wealth that they worked so hard their entire life, how that’s going to be passed on in the most tax-efficient and the most consistent way, consistent with their goals and objectives to their adult children, et cetera. And so, part of I think the new age perspective has to be that the advisor really positioning themselves as that trusted, holistic advisor. A wealth counselor is really the term that I like to use. As a wealth counselor, yes, investment management is an important part, but it’s one of number of different components that the clients are expecting. And Jason, when I think about the more successful advisors in our ecosystem, they’re leading with taxes, they’re leading with creating trust for their grandchildren, they’re leading with creating family LLCs and how all of that fits into the broader picture.

Because in this day and age of creating a good 60/40 portfolio, I think those are table stakes at this point. And so, a big part of this is how do we help the advisors really broaden their expertise so that they feel confident in talking about these other array of services? Frankly, these services that their clients are expecting and demanding that their advisors deliver. And last thing I’ll mention is here’s the cold harsh reality. If that advisor isn’t delivering those types of services, especially to that next gen client, guess what? That next gen client who’s about to inherit a lot of the wealth from their parents and so forth, they’re probably looking and in conversations with other advisors as well. And so, we just want to ensure that there’s a longevity of the client relationships by helping that advisor deliver a full array of the wealth planning capabilities.

You could tell I’m pretty passionate about this, Jason, I can go on, but yeah, this is a very important part of one of the key developments that we’re seeing in the industry.

Jason Diamond:

I could tell I’m not the first person to ask you, I wouldn’t have expected that I’d be the first person to ask you this. It was a very thoughtful answer. I think part of what you’re saying is because advisors need to deliver so much, probably more than ever, because a lot of what you’re describing is table stakes, outsourcing investment management is the only way to get there. It’s a zero-sum game, you have finite amount of time, and what your clients are saying is they want more of you. So, by giving up some of what’s table stakes into a more systematic kind of process, you’re able to do more. Is that a fair summary?

Michael Kim:

Absolutely, and you hit the nail on the head. I mean, it is all about time management and capacity. Yes, the advisors can do anything, but they can’t do everything. And so, what they have to really make a strategic decision on is what are the activities that will generate the highest level of impact to the clients, and frankly to their business? And so, delegate and outsource the other activities, whether it be research, portfolio management, trading, reporting, technology, et cetera, to a provider that has the scale and really delivering those types of capabilities so that advisor can spend the extra time with a client. And just one last unique stat or insight to share. We do a survey every year, Jason, and I would be happy to make this study available to your audience. It’s called Annual Impact of Outsourcing Survey, and it measures the amount of extra time created by those advisors who’ve made a conscious decision to outsource.

This year it’s over nine hours per week. So, think about that. Nine extra hours per week today. And so, that’s like having an extra day in a week plus. And so, that’s just an example of the type of capacity that outsourcing creates. The other important benefit to this is not just freeing up time and creating capacity, but now you get to deliver other experts and other resources to your clients, and you get to be, you meaning the advisor, becomes really the quarterback for all those different experts that are serving that client relationships. And so again, it’s something that we believe is fundamental. We absolutely believe that’s going to be a key part that will fuel the advisor’s growth going forward as well.

Jason Diamond:

So it’s a perfect segue, because I agree. The capacity conversation, it comes up over and over again. In fact, one of the ways it manifests itself is obviously as a recruiter, we hear about movement and it becomes a catalyst for movement. Like, “Hey, I’m spending all my time doing the wrong things and I need to spend more time doing XYZ.” The other thing that comes to mind when we think about capacity, yes, I hear you, outsourcing. There’s clearly elements like compliance. Yeah, you don’t need to be doing that yourself, you can outsource that. But what about AI would be the other obvious way to me that advisors can force multiply themselves? Give me your thoughts on A, what are you guys doing in this space? And then B, what are your thoughts just on the impact on the wealth management industry at large?

Michael Kim:

Yeah, great question. You can’t have a podcast or any conversation this day and age without AI, right?

Jason Diamond:

No. You knew it was coming, sorry.

Michael Kim:

No, this is great. And look, I mean, personally I believe that AI is going to change everything. Now, what does that really mean? Two areas that we think a lot about both internally at AssetMark, but also what we believe we can expect to see in the industry. Number one, it’s all about productivity. And then number two, it’s about experience. So, how do we think about positioning AI, leveraging AI to improve productivity, and more importantly, delivering even a better experience? And so, internally at AssetMark, we’re doing all the different things in terms of all of our Zoom meetings, the virtual meetings, the note-taking and so forth. To me, again, those are table stakes now.

And advisors themselves as well, as they’re having these types of meetings, using all the usual products in the industry that we’re all very familiar with, making sure that is a core part of, I guess the workflow to really streamline and expedite the follow-up process, the notes and summaries of the conversations. A specific example, one of the things that we launched is really around Slack, our enterprise level for ChatGPT and so forth. Again, it is just something that is accelerating the pace of business internally at AssetMark. From an experience point of view, Jason, oh my goodness, we can go on and on on this. At AssetMark, a big part of what we think about is how do we embed AI into the workflow so that it’s just regular part of how we do things as opposed to going somewhere, maybe figuring out how to work with an agent and this and that?

We are in the process of launching a new capability called Talk Tracks. And so, this is actually for advisors. So, an advisor who taps into our website right before a client meeting, we will literally create talk tracks for that advisor on what are some of the insights that they should share with their client on their portfolio? Maybe they should be taking a required minimum distribution. Maybe they should be thinking about opening up a 529 because they have grandchildren, or maybe they should be doing some other planning activities. The point is it uses AI to gather the different data points, not just from the client but really just scouring the entire industry and other clients with similar profiles, and bringing in different suggestions literally as bullet point talk points for the advisor.

And just based on early feedback, man, Jason, this is like our advisors love it. I mean, our advisors are saying that program alone, Talk Tracks, has really saved about two hours per day, because normally they would have to figure out the talking points for the upcoming meeting, and we will be doing all of that for that advisor. And so again, we believe that productivity will be super enhanced. And then the experience is, to me, that is where the gold mine is in terms of opportunities for AI to contribute.

And last thing I’ll mention here, you and I, we often get the question of, “Okay, what does this mean for advisors? Will AI replace advisors and so forth?” No, because investors, at the end of the day they want that emotional security of knowing that they’re going to be okay. Now having said that, I do believe that advisors need to change how they engage with their clients, because that client is going to be coming into that meeting with the advisor having done their research, having asked their best friend ChatGPT about what to expect in that upcoming meeting. It’s very analogous to, I don’t know about you, but if I go see my doctor, I go to WebMD and I’m asking WebMD, “Okay, what should I be thinking about? These are my symptoms,” et cetera, so that I can actually have a much more intelligent, impactful conversation with my physician.

I don’t see anything different in that the clients, the end clients will come in with some level of preliminary research, virtual conversation with their friend Chat, and then that allows that engagement with their trusted advisor to be that much It’s more meaningful. And so, I absolutely believe that it will really enhance the client experience provided that the advisors are prepared for this type of a change in the industry.

Jason Diamond:

And that’s an interesting spin, the idea that clients themselves will use the tool to get better educated, to basically become better clients for advisors. One thing that comes to mind with some of your talk points, I think it’s a brilliant idea. I think it’s clearly another obvious example of capacity saver. Do you think there’s a risk with that and with just AI tools in general of depersonalizing the relationship and just almost making things a little bit cookie cutter? I’ll tell you what comes to mind for me is I can tell in some cases when I get an AI email, and it makes me cringe. I’m not even talking about a spam email, I’m talking about an email that somebody tried to write to me but they used AI as a way to basically write me three paragraphs. So, give me your thoughts on is there a risk here that this just becomes this really depersonalized experience?

Michael Kim:

Absolutely, I do think that there’s that risk there. I do believe that it’s actually happening already. If you think about just the basics of portfolio construction and just different investment vehicles, whether it’s an ETF fund, security, what have you, chances are that advisor will come into that meeting having done some research and they may know or be more familiar with the underlying vehicles than the past generation. So, the advisors who’s hanging their hat on portfolio construction, that 60/40 balance portfolio that I alluded to earlier as really the reason why that client should be working with them, that is going to be a very non-personal or less personal relationship. Now, imagine even with AI though, that the advisor has cracked a code on how to humanize that engagement and really deliver much more of an emotionally connected experience. That’s where I think the advisors will have an opportunity to really elevate.

So as I said earlier, think about those advisors that have not only built really a durable portfolio to help that client achieve their portfolio goals, but wrapping that with tax planning, wrapping that with family planning or estate planning, and really being that first call that the clients make in the event of something, something happens, that’s where the real emotions come in. And part of it is this evolution that the advisors are on where Jason, you know this better than I do, in the past they were brokers and now recently they were more the investment portfolio managers. And then really going forward it’s about how do they deliver that real deeply personal and that trusted engagement about wealth transfer, about tax management, about business exit planning if they’re business owners. And really those are the moments where the advisors will not only earn their keep, but elevate themselves from rest of the pack.

I absolutely believe that this evolution and the opportunity that frankly AI and other developments are catalyzing, if positioned properly the advisors can benefit from this type of a change in an incredible way.

Jason Diamond:

I think there’s tremendous opportunity for advisors that harness this the right way. It brings me to an interesting question. I don’t think everybody who listens to our show is contemplating change or making a change of firms, but certainly there’s a subset of advisors who are at least curious. And technology is one area. It always comes up. I wonder, advisors don’t know what they don’t know in this realm. So, I think about a wirehouse advisor who’s been conditioned to think that the sandbox is the sandbox and it works well enough, and it probably does. They can service clients within that sandbox. So, how is that wirehouse advisor supposed to think about this new world that you’re talking about where he doesn’t even know the right questions to ask because it’s so completely foreign?

Michael Kim:

It’s such a great question, and it’s an important question that all advisors, particularly ones that are in a wirehouse or captive type of environment should be asking. And I think if you double click that question, it’s about how do they become even a better trusted advisor to their clients? Number one. And then number two, could they also build their own business as well? Meaning could they become a business owner or entrepreneur and control their own destiny? And to me, as we were talking earlier about the growth of the independent space, the independent, the industry is, I mean, this is where these two themes are hitting the road. One of the biggest opportunities that I see is for advisors to not only fulfill the goals and dreams of their end clients, but actually for themselves and for their office mates and for their colleagues as well.

Why not? Why not create their own entity that they can control, and really control their own destiny in terms of the desired business outcomes? Now to your point, most advisors don’t know how to really plug in a CRM with a financial planning, with a portfolio management system and how all those things work. And compliance, you mentioned that earlier is such an important part. So, the big thing is how does that advisor continue to focus first and foremost on their clients, but bringing in outsource partners that can help them deliver to this fully integrated tech stack, this workflow that will actually create a better experience for their team, but also for their clients as well? And then growth. How do they really think about growth within the firm, but also leveraging outside experts like AssetMark and others to really get that next high net worth client?

And so, the point is the advisor shouldn’t feel like they have to do all of this work on their own. Really leverage the different experts that are out there. And Jason, I mean, you know exactly all the different things that wirehouse advisors should do as they’re contemplating different affiliation models. Similarly, if the advisor is looking for that easy button on investments, or technology, or growth or what have you, leverage the different industry experts out there that are in the business of helping advisors achieve those goals. So, it’s one of those things where it may feel daunting initially, but really the opportunity that we have is to educate those advisors and share with them on how we can really help their business goals come true as well.

Jason Diamond:

Yeah, it’s a good answer. To me, there’s two ways to think about the Kitces map, if you will, of the massive ecosystem. On the one hand, it’s overwhelming and daunting. But on the other hand, you mentioned the term cottage industry. Think about how far from a FinTech perspective and an investment tech perspective, and just a wealth management tech perspective the industry has come where it’s a blessing that all of these different solutions exist. And also, part and parcel to all these solutions is there’s a lot of different education solutions out there also. So, I think that’s the number one takeaway is advisors not feeling like they need to do this alone because there are so many different options. I think your lens into this is unique given the number of advisors, that you need literally thousands of advisors.

So, we spoke about AI, we spoke about this outsourcing. What is another maybe trend or something you’re keeping your eye on, or something you’re hearing from your advisors that our audience might not be aware of? Give us a preview.

Michael Kim:

Yeah. So for me, I’m a growth guy, Jason, and I always come back to growth. And the number one, I think about the organic growth aspect. And we can spend hours on this, but probably two things that I just want to share with your audience. Organic growth, not only is it the best measure on the health and really the durability of the business, but it also is really like the north star. It should be the north star of any business. I mean, new clients is a lifeblood of any business out there. And so, part of being a business owner means thinking strategically about how do I continue to lead this new teammates and the new firm to ensure that there’s continuous pipeline of new clients coming in for all the different reasons that we talked about. Number two, have a plan. I know it sounds simple, but have a plan.

And there are people like yourselves and our firm and others that can help. When I think about what does that plan should entail, just start with existing clients. How do I help retain and grow my existing clients? And then number two, how do I get a few more new clients? And that could be referrals, that could be other lead generation programs, but just really put those thoughts on paper. Anyway, so organic growth. And then, on the inorganic growth side, this is, Jason, where there’s just so much activity and here’s the best part. I still feel like, Jason, we are in the bottom of first inning of this massive pace of not just consolidation, but really the growth of this independent segment. Experts like yourselves and others that are helping the wire or others, advisors in other ecosystems come in to this independent space. Succession, we haven’t talked about that today, but succession I think is going to be a massive tailwind behind many of these consolidations.

And then the third thing that I’ll mention is the access to capital. I heard someone say the other day that capital is commodity. Before, that was the key thing that was either a catalyst or maybe a headwind for this type of inorganic growth. Today, capital is somewhat of a commodity. And so, there’s so many different PE investors or institutional firms that are coming into this space. And so, part of it is to really thinking about what your right target audience is and how your structure and your strategy is going to be different than the guy next door and making sure that you execute. And the capital will be there. Believe me, the capital will be there. And I just think, Jason, that the inorganic growth opportunity is going to continue to accelerate in this space here.

Jason Diamond:

There’s PE money coming into the space? I hadn’t heard that before.

Michael Kim:

Yeah, it’s maybe one or two.

Jason Diamond:

Let me ask you a few follow-ups there. I think that the tie-in there, the thing that people might be worried about then would be decompression, whether it’s because firms need to just spend more because advisor needs, whatever the case may be. Do you think that it’s the same playbook for advisors to avoid that? Lean into AI tools, lean into things like outsourcing, lean into M&A inorganic, things like that? Or is there more to it? Or is this just something that you don’t worry about at all?

Michael Kim:

No, I mean, we worry, we study, we keep a very close eye on the fee trends out there. And there is always pressure on the fees, and I think it’s healthy that there’s pressure on the fees. I think a big part of when we talk about fees, the other word that is synonymous with the fee compression is scale. Are we able to scale? Are the advisors able to scale in terms of their delivery mechanisms and their operations? And so, what scale means is being … Doesn’t necessarily mean cutting expenses and doing it with lower costs. To me, it is thinking more strategically about are there areas in terms of different technology that we can invest in so that over time we can deliver even a better experience in a more scaled way? Are there personnel that we can bring in to the firm that can bring a certain level of expertise that will help us take the business and the client experience to the next level?

And so, there’s many different ways to scale it, but decompression is synonymous with scale. And so, as a business owner, which now advisors are both trusted advisors but also business owners, they should be thinking a lot more about how they can scale their operation. We at AssetMark, we have over 1,100 employees and we’re expecting to grow at least 20% year over year. And our view is how do we leverage AI? How do we leverage technology? How do we leverage some of the offshore contractors and other scale levers to make sure that we’re doing it without creating additional fee pressure, economic pressure to ourselves and to our clients? And so, it’s always a fun exercise to go through. We’re actually starting a planning process already, but scale aspect, Jason, is an important part of this conversation.

Jason Diamond:

Good answer, yep. All right, two more. I’m going to give you a fun one here. I’m giving you a lateral, I don’t know if this is a demotion, but let’s say you’re hypothetically you’re now CEO of a small to medium-sized independent firm, an RIA. You’ve got capital. To your point, capital is somewhat easy to come by. Here are your choices. A, you explore M&A, go buy a business right now. B, trip to Hawaii for all the founders. Or C, is there some business reinvestment that excites you that you think businesses should be doing?

Michael Kim:

That trip to Hawaii is very enticing, but when I think about the opportunity as a leader of the firm, call me a little bit of old-fashioned here but I go back to our existing clients as the number one place of investments. For me, we can do all kinds of really fun, sexy things, but if we don’t take care of our current base of clients, everything falls apart. And so, first and foremost, how do we take care of our clients? And for me, what that really means is how do we deliver the best service experience? At AssetMark, one of the key things that we are maniacal about is how do we continue to be known as the easiest place to do business for advisors? Similarly, for an advisory firm and the leaders of that advisory firm, I would submit that they should be thinking about how do they serve their clients so that the clients view that firm as the firm that all clients should be working with.

And generally we think a lot about that day-to-day experience, delighting that client, that unexpected delight. I mean, my God, things like that. It doesn’t cost a lot, but it goes so far in terms of just really strengthening that experience. So that is, to me, the foundation. And after that, I also want to invest in additional organic growth capabilities. I think things like retirement is an incredibly underserved market. It is one of the largest segments of our wealth space, but arguably one of the more underserved markets.

Jason Diamond:

It’s not the sexiest space.

Michael Kim:

It’s not the sexiest, but it is an important … I mean, retirement is important, Jason. So we at AssetMark, we recently launched our self-directed brokerage program, and this is really opportunity for advisors to tap into the 401k accounts. It’s almost like a pre-rollover type of strategy, but that’s an example where we believe that there’s tons of opportunities even for advisors to serve their clients. And then, with whatever’s left in the che

With Louis Diamond and Mindy Diamond

Louis and Mindy Diamond explore why successful financial advisors can feel stuck despite thriving businesses—and how agency, enterprise value, risk, legacy, and a clear true north can help them evaluate what comes next.

In Summary

Successful advisors by definition have thriving businesses, loyal clients, and enviable careers—yet still wonder whether comfort has replaced energy. Louis and Mindy Diamond examine why success itself can make change harder, how the desire for agency competes with the disruption of a transition, and why record practice valuations, longer careers, and expanded optionality are prompting more advisors to question the status quo. They also offer practical questions to help advisors clarify their true north, risk tolerance, time horizon, and legacy before deciding whether to stay or explore something new.

The Storyline

By every external measure, top advisors today are doing exceptionally well. They have strong production, loyal clients, growing teams, and successful businesses. Yet some privately wonder why the work no longer feels as satisfying as they expected.

Louis and Mindy explain that the tension is not a sign of failure. For many advisors, it appears after they have succeeded and can see another 15 or 20 years of more of the same ahead. The question becomes whether their business still gives them the agency, control, and professional energy they want.

That distinction between comfort and energy can be difficult to recognize. An advisor may enjoy an excellent quality of life and a business that runs smoothly while still feeling comfortably uncomfortable. The catalyst is often not a breaking point, but a renewed desire to build, grow, create enterprise value, or leave a different legacy.

Success also creates powerful reasons to stay. A healthy pipeline, loyal clients, unvested compensation, retire-in-place programs, and the short-term disruption of a transition can make change difficult to justify. At the same time, record valuations, longer careers, multigenerational teams, and a broader range of firm and affiliation models have made the opportunity cost of staying more visible.

The discussion does not assume that every advisor should move. Instead, Louis and Mindy focus on how to make an intentional decision: define your true north, identify what you are trying to solve for, assess your tolerance for risk and disruption, and learn what is possible before committing to a change.

Topics Covered

• Why successful advisors can feel stuck
• Agency, control, and professional satisfaction
• Comfort versus energy in a thriving business
• Defining an advisor’s true north
• When more of the same becomes a constraint
• Fear of change versus fear of standing still
• Recruiting deals, practice valuations, and enterprise value
• Longer careers and multigenerational teams
• Risk tolerance, disruption, and client portability
• Creating clarity without committing to a move

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

What feels different for successful advisors today? (02:09)
Mindy explains why top advisors are increasingly willing to examine the status quo as their choices expand and the value of their businesses rises.

Why can objectively successful advisors still feel unsettled? (04:51)
Mindy identifies agency as a central need for top advisors and explains why a loss of control can create deep frustration even when the business is performing well.

What does a fire in the belly reveal? (08:22)
Mindy shares the example of a highly successful wirehouse team whose interest in change comes from a desire for renewed energy and legacy, not from a final breaking point.

How is being comfortable different from being energized? (11:53)
Louis and Mindy explore the difference between a business that provides an excellent life and one that still feels professionally satisfying, including the feeling of being comfortably uncomfortable.

When does more of the same become a constraint? (17:49)
They discuss how repeating a successful formula can continue to produce results while limiting growth, ownership, or the entrepreneurial spark an advisor wants to pursue.

How do advisors reconcile fear of change with fear of standing still? (27:16)
Mindy and Louis explain why those competing concerns can persist for years and how a firm decision, a compelling opportunity, or a moment of personal clarity can shift the balance.

Why is this question surfacing more often now? (29:48)
Record valuations, elevated recruiting deals, expanded optionality, peer movement, longer careers, and next-generation needs are changing how advisors assess the cost of staying.

Which questions should advisors ask before considering a move? (36:35)
Mindy and Louis outline questions about true north, frustration, risk appetite, disruption, legacy, time horizon, and the regret of never testing what might be possible.

Key Takeaways

Success and professional fulfillment are not the same thing. An advisor can have strong growth, loyal clients, and an excellent quality of life while still feeling that comfort has replaced energy.

Agency is a core need for many top advisors. Firm policies, compensation changes, technology limits, or other decisions can feel especially disruptive when they reduce control over the business or client experience.

Good enough can become a constraint. A proven business model may continue to work financially while limiting growth, ownership, enterprise value, or the professional satisfaction an advisor wants next.

Success creates powerful inertia. A strong pipeline, unvested compensation, retire-in-place programs, client relationships, and the disruption of a transition can all make the status quo difficult to challenge.

The opportunity cost of staying has become more visible. Record valuations, elevated recruiting deals, broader affiliation choices, longer careers, and peer movement give advisors more reasons to understand what else may be possible.

True north should come before due diligence. Advisors need to define what they want to solve for and how they weigh control, risk, enterprise value, legacy, and time horizon before evaluating firms or models.

Education does not require a move. Self-awareness and a clear view of the available options can help an advisor make an intentional decision, including the decision to stay.

https://youtu.be/nrmtRBlJJVs

Quotable Moments

“I’m comfortably uncomfortable.” — Mindy Diamond

“You’ve always got to be really clear on what your true north is.” — Mindy Diamond

“Which regret is bigger to you, trying something and failing or never testing what’s possible?” — Louis Diamond

“It’s okay to want more. There’s nothing wrong with you for wanting more. At the same time, there’s nothing wrong about being comfortable.” — Louis Diamond

FAQs

Why do successful financial advisors feel stuck even when their businesses are thriving?

External success does not always create professional energy or fulfillment. Some advisors have excellent businesses but feel they have lost agency, stopped growing in ways that matter to them, or settled into a version of success that no longer fits their goals.

What does agency mean for a financial advisor?

Agency is control over an advisor’s professional life and business. It can include how the advisor serves clients, uses technology, builds a team, makes decisions, and plans for growth or succession.

Is being comfortable in a business the same as being energized by it?

Not always. Comfort can reflect a strong business, good income, loyal clients, and a healthy quality of life. Energy comes from feeling engaged by what the advisor is building and where the business is headed.

Why can success make it harder for an advisor to change firms?

Successful advisors often have more to disrupt, including client relationships, team dynamics, a growing pipeline, unvested compensation, and valuable retire-in-place benefits. The immediate costs and risks of a transition can outweigh a benefit that may be larger over the long term.

Why are more successful advisors questioning the status quo now?

Practice valuations and recruiting deals are high, the range of affiliation models has expanded, and advisors see respected peers make changes. Longer careers and the needs of next-generation partners also give many teams more time and reason to reconsider their future.

What is an advisor’s true north?

True north is the set of priorities that should guide an advisor’s decision. It defines what the advisor wants to build, what needs to change, and how factors such as control, ownership, legacy, risk, and time horizon should be weighted.

What should an advisor ask before considering a move?

Key questions include what is causing frustration, how significant it is, what outcome the advisor wants, how much disruption and client risk the team can tolerate, and whether staying in the same place for another 10 or 15 years would still feel satisfying.

How can an advisor create clarity without committing to change?

Start with self-awareness, then learn what options exist through informed conversations and competitive analysis. Understanding the landscape can strengthen a decision to stay or reveal a better fit without obligating the advisor to move.

External success does not always create professional energy or fulfillment. Some advisors have excellent businesses but feel they have lost agency, stopped growing in ways that matter to them, or settled into a version of success that no longer fits their goals.

Agency is control over an advisor’s professional life and business. It can include how the advisor serves clients, uses technology, builds a team, makes decisions, and plans for growth or succession.

Not always. Comfort can reflect a strong business, good income, loyal clients, and a healthy quality of life. Energy comes from feeling engaged by what the advisor is building and where the business is headed.

Successful advisors often have more to disrupt, including client relationships, team dynamics, a growing pipeline, unvested compensation, and valuable retire-in-place benefits. The immediate costs and risks of a transition can outweigh a benefit that may be larger over the long term.

Practice valuations and recruiting deals are high, the range of affiliation models has expanded, and advisors see respected peers make changes. Longer careers and the needs of next-generation partners also give many teams more time and reason to reconsider their future.

True north is the set of priorities that should guide an advisor’s decision. It defines what the advisor wants to build, what needs to change, and how factors such as control, ownership, legacy, risk, and time horizon should be weighted.

Key questions include what is causing frustration, how significant it is, what outcome the advisor wants, how much disruption and client risk the team can tolerate, and whether staying in the same place for another 10 or 15 years would still feel satisfying.

Start with self-awareness, then learn what options exist through informed conversations and competitive analysis. Understanding the landscape can strengthen a decision to stay or reveal a better fit without obligating the advisor to move.

Related Resources

How to Free Yourself from the “If Only” Mindset
Here are the 5 most common self-limiting statements that advisors share—and ways to reframe your thinking.

Limitless Growth: Building the Business You Want and the Life to Match
Stephanie Bogan, founder of Limitless Advisor, offers a glimpse into the advice and perspective she shares with advisors and business leaders in the wealth management world, focusing on mindset and methods, and their relationship to achieving one’s best business life.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Best of Replay: Why So Many Successful Advisors Feel Stuck

An Industry Update with Louis Diamond and Mindy Diamond.

Louis Diamond:

Welcome to a replay of one of the most popular episodes from our podcast series for financial advisors. Why So Many Successful Advisors Feel Stuck. It’s a Special Industry Update with Mindy Diamond. I’m Louis Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven, and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

We spend a lot of time talking with advisors who, by every external measure, are doing exceptionally well. They’ve built real businesses with strong production, loyal clients and teams that continue to grow, and yet behind closed doors, many of these same advisors are quietly asking a different set of questions. Not how do I fix what’s broken, but why doesn’t this feel as good as I expected? That tension is showing up more frequently than it did five or 10 years ago, and it’s not because advisors are failing. In many cases, it’s because they’ve won and now find themselves staring at another 15 to 20 years of more the same, unsure whether comfort has slowly replaced energy.

This industry update is about that very moment. I asked Mindy to join me to unpack what we’re hearing from successful advisors across the industry, why success itself can become a constraint, how fear of change competes with fear of standing still, and why record valuations, longer careers and the maturity of the independent space are changing the psychology of decision-making. We also talk about the right questions to ask before considering a move, questions about control, enterprise value, legacy and time horizon, and how advisors can create clarity without forcing a decision. There’s lot to explore here, so let’s get into it. Mindy, thanks for joining us.

Mindy Diamond:

Oh, I’m so happy to be here. Always.

Louis Diamond:

This is a fun topic. So today we’re just going to dive right in. I’m curious, from your vantage point and talking and working with many of the best advisors in the industry at a high level, what are you hearing from successful advisors today that feels different from five or 10 years ago?

Mindy Diamond:

First of all, for the most part, I think that top advisors are loathe to move. And they may have a bunch of frustrations or things that they wish were different, but generally speaking, they’ve always been well taken care of. They have the bat phone to the top, it’s good enough and nobody wants to mess with success. But two things are true today more than ever before, that the competitive landscape, there are more options than ever before, that their businesses are worth more than before. I guess it’s more than two things. That they’re thinking about their business as a business and saying, “Yeah, it’s a hassle to move, but if I can maximize the value of my business more elsewhere and at the same time solve for what I want to, maybe I really do need to consider it. And so I think that it’s a time of more consideration, that top advisors, in particular, are just not willing to settle for the status quo.

Louis Diamond:

Yeah, no doubt. The only thing I would add, but I completely agree, is that today the retire in place or succession opportunities for a wirehouse advisor to transition or sell their business to their next generation or to another team or even an independent advisor, to sell their business to their broker dealer or to someone within their firm, those opportunities, the internal options, I think are more compelling than ever. So we hear a lot from really successful advisors who, that actually doesn’t matter if they’re successful or let’s say they’re mid-tier in the industry, where it’s much easier to stay. And the firms are smart. They’ve made these internal deals better for the retiring advisor at the expense of the inheriting advisor, but they definitely try to create the easy button for someone who’s successful and might be fairly close to the end zone of their career.

Mindy Diamond:

And yeah, unequivocally. And so I think what happens is that, as these senior advisors are weighing the notion of will I eventually take my firm’s retire in place program, hit that easy button, if you will, take the path of lease resistance? Before they do, most of them will, and absolutely should, at least get educated about what else is out there. Not with an eye toward moving necessarily, but with an eye toward knowing what their value is before they sign on for the next seven to 10 years.

Louis Diamond:

No doubt about it. So I think for the most part, we’re talking about mostly top two, advisors who are objectively winning. They have amazing businesses, they’re growing, they have loyal clients. Work-life balance is probably pretty good. So why do so many of these advisors still feel unsettled at the end of the day?

Mindy Diamond:

Because I think that without question, the number one thing that every advisor, but definitely the most successful advisors want, is agency. Agency over their professional life and anything, any day, any event that smacks of loss of agency or less agency than they would like, less control than they would like, makes them feel unsettled is a good word. Unsettled is probably a euphemism for exceedingly frustrated, really angry, ready to go. So look, our job in talking to these folks is, first of all, to say to them, there is no perfection anywhere. So the first thing is you may be annoyed that your firm did X, Y and Z, or you don’t have control over A, B, and C, or you may want more of A, B and C, but at the end of the day, you need to be sure that you’re aware of the hassle factor, you’re willing to trade one set of problems for potentially another. I guess what I’m saying is you got to really be sure that you want it. That’s the bottom line.

Louis Diamond:

No doubt. I would also add a bit of a different spin that a lot of advisors, these folks that I think by any objective measure, they’re killing it. You look at any of their friends outside the industry, their friends probably look at them and say, “Wow, this advisor has an amazing life.” And I think we’d probably say the same, but I think we see it where there’s a difference between being professionally motivated and energized versus just being comfortable. And I think with a lot of folks, especially if it’s a fee-based business, their clients are mostly friends. They grinded in the early years. They still work hard, but now things are on autopilot. So I think some people around unsettled because they have 10, 15, 20, 25 years left to work and they look and say, “This is great. I make a good living. Life’s not that hard,” but they’re missing that spark that they used to have.

Mindy Diamond:

I couldn’t agree more. I actually love that spin, and if I can, I’ll share an example of a conversation I had literally just last week. So talking with one of three senior partners on a very successful wirehouse team, without a doubt, one of the top teams in the industry, and this is a team that absolutely has a bat phone to the top. This is a team that gets referrals from their firm. So if another advisor leaves, they’re the go-to. If someone has an investment banking deal and needs to bring in a wealth advisor, they would go to this team. This is the team or one of a few teams. And I talked to them probably every six months for the last 10 years, and I’m not kidding, and we just have a nice relationship. They trust me. No, I would never sell them. And so they just want to understand the pulse on things.

And for years, that’s essentially what they’ve said is, “We’re killing it, we’re crushing it. We are the go-to team and everything is hitting on all cylinders. And we know that we’ve got our firm’s retire in place programs when two of our senior partners are ready to cash out.” But just last week, not even the senior most member, probably the second to senior most member called and said, “It’s all working well, but I have this fire in my belly.” That’s a good way to say it, right? I have the sense that I’m missing something. And so some of the time, it’s about just getting to that place, say, when the straw that breaks the camel’s back. Something happens, you can’t take it any more, time to go. But with those top advisors, more often than not, it’s not about straw that breaks the camel’s back. It’s much more about fire in my belly. I realize that will I feel good if, at the end of the day, five minutes, five years or 20 years from now, will I feel good if I leave it all behind? We’re right here.

Louis Diamond:

Yep, exactly. Yeah, I think part of it is legacy, but the other part is just fast forwarding the tape. If you say 20 years from now, and you look back in the last 20 years, is you plus 20 years going to feel satisfied and encouraged and excited about what you were accomplishing? Or was it more of a, yeah, it was good, it was easy. I bought three houses and I have a boat. Or was it more about the personal joy of growing and building something and being part of something?

Mindy Diamond:

That’s actually a very good way to say it. Where can the top advisor find that joy? So let’s say I’m hitting on all cylinders, top of the food chain at fill in the blank firm, a traditional firm. What are typically the things that advisor, the options that advisor might consider that could ignite that joy?

Louis Diamond:

Yeah, I mean, honestly, probably a bad nonspecific answer, but it really could be anything. I mean, we see plenty of teams that are with one major wirehouse, they move to another one and just the act of transitioning is re-energizing. They have backend bonuses to hit. This new firm has a bit of a different culture, they feel more important again, and that’s their spark. Others, it would be we’re building something, we’re creating our own firm. Others might be I’m now an equity partner in something that I have a hand in, I have a voice. They actually listen to me. So I think it can be all of the above. It’s more about what is it that an advisor is most interested in? And then at this point in the industry, it’s choose your own adventure. If you have some sort of feeling or urge, whether it’s I want to do something different, I want to grow faster, I’m frustrated by X, Y, Z, it’s more about filling in the blanks of what your next journey looks like. And my guess is just thinking about that is going to provide that natural spark or ignition.

Mindy Diamond:

Yeah. And if I can, the piece of advice that I gave to this team, and I think is worth mentioning here, you’re absolutely right. Choose your own adventure. To us, I think we would both say that most exciting thing about being in our position and being the counselor or the guide or the Sherpa to advisors as they consider what comes next is the amount of choice that they have and how exciting the next chapter can be. But what I said to this team or the one advisor on this team is, “You’ve always got to be really clear on what your true north is.” So yes, there’s a lot of options. An advisor can find joy or reignite the spark at any number of choices, more than ever before. But being really clear before you begin to take meetings or think about it on what you’re looking to solve for, what’s most important to you really matters or else you wind up just spinning your wheels for a lot of time.

Louis Diamond:

Clearly agree. How do you distinguish between being comfortable in your business and being energized by a business? Do you think there’s a difference?

Mindy Diamond:

Yeah, look, I think in some cases, they could be one and the same. I think somebody can be comfortable because they feel energized. They’re hitting on all cylinders. They’ve got a lot of agency and professional control over their business. They’re where they want to be. They’re living their true north. But I think in many cases, and many of the advisors we’ve counseled, they aren’t one of the same.

I’m comfortable because, as you said, I have a great quality of life, I’m making great money, I have a lot of freedom to coach my kids’ basketball team. I can work from home, I can travel when I want to, I have great clients. I may not technically own my business, but I feel as though I do. I’m comfortable enough. But what this advisor last week said to me, and what we hear a lot, is I’m comfortably uncomfortable. That I am comfortable enough. If I retired from here, I will have made a ton of money, I will have done good work and it all would be good enough. But whether or not good enough is really good enough in terms of professionally satisfying and everything you want it to be is a very different question.

Louis Diamond:

Exactly. I’ll give an example of that. I have an advisor I speak to who’s independent. So he’s been independent for his entire career at a broker dealer. He’s an absolute stone-cold killer. I told him that. He’s probably top three advisors at his BD, so it’s great for the ego. He’s on the conference circuit and sharing his best practices, but he’s in his 40s and said to me, “I can continue to rinse, repeat, I can continue to get the accolades and be on the main stage, but I feel like I’m missing something. I just know how to run the same place and I don’t really see how that’s going to change.” So he has a pretty hard decision because it’s nice to feel important, it’s nice to grow without a lot of extra effort, but for this individual, it’s becoming clear that spark or feeling energized again is his true north.

Mindy Diamond:

And so what would he look at? In other words, if you are already top of the food chain at your broker dealer, and by the way, we see that a lot, that advisors in the independent space that work under broker dealer that are number one, they are the one at the conference that everybody goes up to and said, “Oh my God, I hear such great things about you. I want to learn from you.” So what is it he’s missing?

Louis Diamond:

For this individual, what he thinks he’s missing is the chance to really build his own platform. So if this gentleman decides to make a change, it’s definitively going to be to build his own RIA, where he can pick and choose all the technology. He’s really bullish about his personal network and being able to recruit like-minded folks in to do acquisitions. And his North Star is going to be, how do I build the most valuable enterprise that I can sell for a whole boatload of money 15 years from now?

It’s a great example because this person has everything that most people would want, but he’s still wanting more. And what he’s looking to accomplish is probably similar to a lot of people, but the means that he’s going to get there and the weighting that he’s putting on his criteria are different. And that’s what, I think, the best part of being an advisor is you have so much choice. There’s no one telling you, “You have to grow, you have to do this, you have to care about money, you have to onboard X number of clients.” It’s much more about how do you listen to your heart and then make intentional choices to make it happen, essentially.

Mindy Diamond:

Yeah, and I think that’s the calculus. His calculus is it’s more than enough here. The question is, am I willing to upset what’s more than good enough, upset that apple cart in order to get something that is marginally better? And his answer, or our advice to somebody like that, is it really depends upon how much you want it. If it will feel soulful to you, if, at the end of the day, you will feel better about the professional legacy you left behind, having built something bigger and better with less limitations, then you’ll do it. You have to decide how much you want it. It’s interesting, if I can go back to this example, this team’s true north is a little different and it’s worth contrasting. So while, for sure, they would love nothing more than to maximize enterprise value, and they recognize that if they and any of their partners retire through their firm’s retire in place program, it’s a way of monetizing, but they look at their firm as a monopolistic buyer. That was the term that they used.

My comment to them is, “So what? Monopolistic or not, if, at the end of the day, it allows you to do what you need to do when you get paid a fair value, who cares if they’re monopolistic?” That really is the truth. But their true north is they would love to build something. They don’t need to build their own platform. In fact, they would want nothing more than to plug into an already existing platform. And they recognize that by doing so, they’re giving up some enterprise value. And the way to maximize enterprise value the fullest is to go out and build your own. But in this particular instance, they don’t want to do that. They’ve got partners that some are in their 60s and that’s not going to be appealing to them. So their true north might be something a little bit different. I think the point here is being really clear on what you’re true north is really important because it guides the set of choices.

Louis Diamond:

No doubt. At what point do you think more of the same stops being a growth strategy and starts becoming a constraint?

Mindy Diamond:

Oh, well, just that. Your example was the perfect example, right? That I am doing incredibly well. I could keep on doing this, but in some way, it’s not only constraining my growth, but in some way it’s constraining my professional satisfaction. And I think more often than not, it’s about that. Because the audience I think we’re talking to in this podcast are really successful folks. There’s no question that there’s nothing we can tell them that would suggest that they’re not successful as they are. So if they decide to upset the apple cart or they decide to look for more, it’s because there is that fire in your belly, that something, that entrepreneurial spark or that something that’s not being satisfied.

Louis Diamond:

I agree. Yeah. I think sometimes it’s a matter of time says to me, if someone finds something that works, it’s a pretty sound business strategy to rinse, repeat, and keep doing it, focus on what’s essential, cut out the rest. You read any business book, it’s going to tell you double down on what’s working, cut out the rest. The 80/20, et cetera. But I think eventually you keep doing the same thing over and over again, and it might still yield results, but is it yielding the growth? Is it yielding exponential results? And at some point, does just doing the same thing, is it still driving you in the same way?

Mindy Diamond:

Yeah, and I think a lot of times people don’t really know what they’re missing. In other words, the growth strategy is working. I’m growing X amount per year. I’m living a good life. I’m consistently in the top five advisors in my firm. It’s working and nobody could argue that it isn’t. I think it’s just more about a lot of times as advisors, one of two things, either one of their friends move, a professional colleague that they respect and they say, “Holy cow, he was here or she was here for 30 years, like me, killing it. She would’ve been the last person I would’ve thought would move.” And then suddenly she does, and it makes them say, “What am I missing? What did she see that I am not aware of?”

Or a lot of times these folks will, another example I’ll give you. An advisor that I’ve worked with for many years, probably 25 years, who is top of the food chain, doing incredibly well, never really thought about moving, talked over the years, “Boy, it would be nice to build something of my own, but the truth of the matter is that success and the thought of having to go back to zero and build something from scratch, no way.” But you and I came across an opportunity that was unbelievably compelling, and without going into too much detail about the opportunity, suddenly when we talked about that opportunity with this advisor, what he said was, “You can’t be what you can’t see.” All of a sudden we painted the picture of something that’s really compelling I didn’t even know I wanted, but holy cow, now I know I really want it.

Louis Diamond:

Yeah, because something, this dream was made tangible. It put a face on something that this advisor didn’t realize they were missing. I mean, I see this every day, this next question, I’d love to get your opinion. I feel like most advisors, they may sense something is off or something’s changing or shifting under their feet, but they say anyway, why do you think success is often the very thing that keeps advisors stuck?

Mindy Diamond:

Yeah, I think it’s more than good enough. And for most of us, most of the time, I might have that little voice in me or that little inkling that says, gee, maybe it could be better. Or gee, I wonder if or something of the sort, but I have a zillion competing priorities. I’m a dad or I’m a mom or I want to travel, or I’m 60 years old, or I’m filling any blank at any time. And I think that it’s really hard to give up on that. And I think that the example we just gave, of this advisor that saw an opportunity, a unique opportunity that solved for a lot of the things that he didn’t even know he was missing, that happens more often than not.

Louis Diamond:

Yep, I agree. I think too, what happens is a lot of advisors think about moving as strictly a financial trade. My grid rate is this and my fees are that I can get 3.5X here, but only 2X up front have Y in deferred comp. And I think when advisors are thinking about that, which is a reasonable lens to look through, end of the day, they’re business people. If the business is growing and they have to place Y or they know how to get things done, it’s much harder to justify that change.

It’s like people who sell their house top of the market, it’s like, hey, it’s this thing and keep growing, and do you feel like you’re missing out because you’re leaving at this point in time? Typically, too, when things are good, clients are happy, the reviews are easier. We see it a lot with the market being up. In 2025, the market was up almost 20%, much harder for some folks to justify moving because they feel like, whether it’s artificial or it’s real, that their business is really cranking. So I think that’s a big part of it as well.

Mindy Diamond:

Yeah. And maybe another little spin on it is a lot of times to move is really, from a financial perspective, may only be marginally better in the short-term, whether it be because after taxes, the amount of tabs you get upfront is not that much greater than the deal you could get by retiring through your firm’s sunset program. Or if you move, you’re going to be leaving some clients behind. So if you factor in the breakage from losing clients and the short-term upside, the delta may not be that great. We see a lot of times when an advisor is already independent and they’re at a net 60 or 65% payout and they’re looking at something that gives them a 70% net payout and they say, “Yeah, okay, so those extra basis points are nice, but is it nice enough? Is it worth the hassle?” The answer to that is it is entirely an inside job.

For some that delta, even if that delta was only 2 cents, would be more than enough to justify the change. And for others, if the delta was 2000000%, it wouldn’t be enough. So what’s this positive? What’s this positive or determinant is how badly they want it. How badly, beyond the financial piece, they want what another opportunity would give them. Either that I really have this fire in my belly, and I love that term, and I just can’t solve for it. I can’t extinguish that fire here. I can’t feed that fire here. Or opportunistically, I want to be something I just can’t here, and I want it so badly that even if, financially, it’s only marginally better in the short-term, I’m willing to go through the hassle to get it.

Louis Diamond:

No doubt. And one last point to put a bow on this segment is I think there’s also an element that advisors who are growing or they have a big pipeline, and to me, the best advisors always have a big pipeline. They always have the next big prospect. There’s definitely some, I think, real fear that I’m going from growing 10% per year to reflexively choosing to make my life really hard for a couple of months to slow down growth, perhaps lose some of the pipeline, lose some of the big clients I just onboarded. And that’s really hard to justify because the trade-off is that much more apparent to them.

Mindy Diamond:

Yeah. Which you really want it.

Louis Diamond:

But that’s always going to be the case. That’s the point. The good advisors, for the most part, are always growing and always doing these things. So it’s like running on a treadmill. The same thing with unvested deferred compensation. I have 2 million of unvested deferred, it’s so hard to walk away from. The counterpoint is you’re always going to have that. If anything, it’s just going to grow. So again, it’s taking a step back to take multiple steps forward. Some people want that and are excited by it. Some people aren’t, but that’s okay.

Mindy Diamond:

Yeah, and I think that’s the whole point. While we get paid to move people, our position and the relationships we’ve had for years with top advisors, with every advisor, is they trust us because we’re never looking to just sell them on a hot opportunity. We’ll bring opportunities to them and say, “Here’s what’s available, here’s what the upside could be,” but we know and respect better than anyone that you got to really want it. It is a hassle. It’s hard work to move, and you’ve got to have a real confidence in your clients, your current clients, that they’re going to follow you. You’ve got to have real confidence that your pipeline will follow you, that what’s not certain. You’ve got to have confidence that you can tolerate the risk, and you’ve got to have confidence that your team’s going to follow you and that you’ve got the support you need. And not everyone has the appetite for it, nor should they.

Louis Diamond:

Exactly. I mean, I would say there’s two competing, I guess, thoughts that oftentimes go through an advisor’s mind, and they’re both extremely reasonable. The first one is the fear of change, but at the same time it’s the fear of staying exactly where they are for another 10, 15, 20 years. How do you think advisors can reconcile the tensions, like the angel on one shoulder, the devil on the other? One’s super comfortable and safe. The other one is an unknown. One’s exciting, one, et cetera. So how would you reconcile that?

Mindy Diamond:

Well, first of all, the short answer is it takes years. The two examples I just raised, and I’ll ask you the same question, are advisors that I’ve been talking to for 10 years plus. In one case, it could be 15 or 20. So for 10 or 15 years, there was always a certain amount of angst, a certain amount of curiosity, but not at all a willingness to do anything about it until in one case, something happened. Something happened that made them realize that they’re paying an awful lot of money to their firm for value they’re not getting anymore, feeling limited. And so they decided to pick up their head and look elsewhere.

In the other case, it was opportunistic. Really was perfectly happy doing their thing and heard or saw an opportunity that sounded compelling and began exploring. Now, I don’t know whether either one of these teams will ultimately move, so let’s say that, but these conversations are many years in the making. So I think the point I’m making is that devil on one side, an angel on the other are those two competing voices. They exist for a long time until either, in some cases, they never get reconciled and the advisor just retires and it is what it is. In other cases, they get reconciled, but sometimes five, 10 years after the voices begin to surface and they don’t happen, they don’t get reconciled until something happens to force it.

Louis Diamond:

Yeah. I also look at this concept as we’ll call it a midlife career crisis. So I’m 40 years old. Instead of buying three motorcycles and a Porsche and going skydiving, I’m thinking about my business. And sometimes, I think people just wake up and say, “Wow, I don’t really know what my identity is and I need to do something different. I need that additional spark.” So I think sometimes too, it’s just either an age thing or a certain birthday comes up or it’s just that a moment of clarity that pops into the mind.

Mindy Diamond:

Totally agree.

Louis Diamond:

Why do you think this feeling is showing up now more than ever? Is it because of recruiting deals? Is it because of the movement toward independence? Is it something else or somethings else?

Mindy Diamond:

Yes, I think it’s all of the above, and I think that’s the cool thing. Valuations are at an all-time high. So even if an advisor has zero interest in going independent, you have to be living under a rock not to know that your business has real value. That business, outside of the constraints of a major firm, is worth much more than it is on the inside. Now, that doesn’t mean that everybody should go independent, or will, but the fact that those multiples are hanging out there and that recruiting deals are at an all-time high, and they are, the fact that there’s more optionality, which means an advisor, if they go out and explore, is more likely to find their personal version of Utopia or something closest to it.

The fact that movement begets movement. That’s something we haven’t talked about, but it’s worth mentioning that all you have to do is read AdvisorHub or just be sitting in your office and every day, watch somebody you respect make a move. And so the more you see top advisors move, the more you say maybe there really is something else out there for me as well. And then you and I always say that the big firms are one policy change, one comp change, one mandate, one something away from frustrating the heck out of a large constituency because the bottom line is, as long as you’re an employee, you’re vulnerable or captive to whatever choices the firm makes.

Louis Diamond:

Yeah. I think you’re talking about, in a very nice way, what happened with UBS at the end of 2024, but we even see it outside of the wirehouses. There’s independent firms that layer in new fees or they don’t allow their advisors to text. There’s always that risk that something big coming down the pike that motivates someone. I’ll give you two other reasons why they think this is happening with more frequency. The first one is advisors’ careers are oftentimes longer, either because they’re bringing their kids into the business or the business is so lucrative, and if the business is mostly fee-based and it’s on autopilot, it’s like, why should I hang up the old boots when I can just work for another handful of years? So I think with longer advisor careers and the pot of gold at the end of the rainbow, which is either a big exit or a retire in place deal, I think advisors just grapple with more and they grapple with it for longer.

Mindy Diamond:

Yeah, you brought up a point. I’m so happy you brought it up. I’m sitting here next to my son, my next generation. I have said oftentimes that, without my sons coming into the business, I don’t know that I would’ve had the same relationship to the business as I aged. As I got older, and I’ll be transparent, I’m 63-year-old now, if 10 years ago, my sons had not decided to join me, I think that I might have said, “I’ll work as long as it feels soulful and good, and if something better comes along, great.” But it wasn’t until they came along that I really began to think about everything through their lens. It was less about me because by the time I was 50, from a financial perspective, I could have left if I wanted to. But as long as my kids weren’t in the business, there’s no way I was going to do that.

There was no way I wouldn’t want what was the absolute best for the business. And I guess that’s a long-winded way of saying in an industry where there’s so many multigenerational businesses, father-son, mother-daughter, whatever it is, senior advisors that really care, even if they’re not family, about their next generation, when they begin to look at their business through the lens of their next generation, the technology may be good enough for me, but it’s sure not cutting edge enough. Or they say things like, “The bureaucracy is killing me, but I work three hours a day,” or, “I have such a good life, I don’t want to upset the apple cart.”

But then all of a sudden, one day we get a call either from that senior advisor, for whom it was more than good enough for years, or from the next generation that says, “This is not what I want. It may have been good enough for my dad and my mom, but it’s not good enough for me.” So it’s a long-winded way of saying I think that the next generation really forces the senior advisors, the elder states, G1 to grapple with whether or not this is good enough.

Louis Diamond:

Yep. I’ll answer my own question first and then get your opinion, because I feel pretty strongly about my answer. In thinking about our four to five point list here of why this is a bigger deal now, I tap in with more frequency. The question for both of us is which one do you think has the biggest psychological impact on advisors right now? I’m going to go first because I’m excited about my answer. I think by far, it’s practice valuations by far.

Because what’s happening is advisors are reading news articles, hearing from their friend, getting cold-called from corporate development folks at firms, and they hear what used to be just ludicrous multiples. These were multiples that were reserved 100, $200 million revenue business are now getting paid to a three to $5 million practice. And any advisor, even ones who aren’t super financially motivated, I think just hearing about this, knowing what’s possible has a major psychological impact. It’s making it that much harder for folks to say, “You know what? It’s comfortable. It’s easy. I can retire here because the opportunity cost of staying put has accelerated that much.” What do you think?

Mindy Diamond:

So unequivocally, and I am money motivated for sure, so I agree with you. But at my stage and age, if I were an advisor, I absolutely wouldn’t be able to ignore the impact that maximizing enterprise value might have and how awesome it would be to be building a business that could be worth more. But I would equally, if not more so, be really concerned about, A, how it would feel. Like am I going to be able to live the professional life, do what’s soulful for me? Am I going to be able to build the business I want to? Is this going to be the business, the legacy I’m going to feel good about? Is this going to be the business that I want my sons to take over? And that, to me, would be equally important. And I’m making it about me, but I think that’s what a lot of senior advisors would say.

Louis Diamond:

No doubt. So for folks that are questioning their situation, what do you think is a question or three or four or five of the right questions they should start asking themselves before even thinking about making a move?

Mindy Diamond:

Yeah. Well, one is, listen, what’s your true north? And even before, I mean question two, and I think what I just said, assessing your true north, figuring out where your true north is, one, because question two is what is it that’s bothering you? What is it that you’re frustrated by? And simultaneously, to what extent does it frustrate you? Like how, okay, so I feel mildly annoyed that I have to do X, but is it enough to make me want to move? So being clear on that is important. But I think even before you begin to delineate how frustrated you are, you have to be really clear on what you want to be when you grow up. What is it that would feel soulful? What are you trying to solve for? What are the parameters or realities that you need to take into account? You’d love to do X, but you have a senior partner that you know is never going to want that, whatever it is. So what is the true north? What are you frustrated by? Then it’s what risk appetite do I have?

Louis Diamond:

To take risks, yeah.

Mindy Diamond:

What risk appetite and what appetite in general do I have for disruption to my life? How tolerant will I be if one of my clients doesn’t follow with me, because that is really possible? How tolerant will I be if I spend a few months and I’m working harder than I’ve ever worked in my life, whatever it may be. And then I think it’s that question, what I want to be when I grow up is really what’s just positive. Do I want to be a business owner or am I a big corporate person and that’s just who I am and I’m comfortable with leveraging the name that’s on the door?

Louis Diamond:

No doubt. I think an interesting one is ask yourself, if I stayed exactly where I am for the next 15 years, would I be proud of what I built? I think it’s a really important one sometimes too, when I’m speaking with advisors who are worried about a transition, and honestly people should be worried about a transition. It’s terrible. There’s no sugar-coating it. It’s a lot of work. It’s scary. It’s a risk. You’re disrupting your life, all your client’s life, et cetera. But sometimes, I’d say, the reframe is the three months, four months, whatever it is of backbreaking work that you put in, is that worth it for the next 10, 15, 20 years of doing something that really sparks you more? And I think, again, it comes back to your question of risk appetite, but I think just thinking about that is a lot of people get lost in the immediacy of the risk and of the work, but they forget to look beyond that work to what’s possible on the other side of the rainbow.

Mindy Diamond:

And how important it is to get it. In other words, I may be very clear that I would like to have X. I’d like to do Y. I would love, I mean we hear this all the time. I’d love to be independent and build my own business. Boy, if I were 20 years younger or I was, whatever it was. So the point of the matter is you can be aware of wanting those things. It’s admirable to want them, but whether or not you actually should go after them, that’s an inside job.

Louis Diamond:

No doubt. I think another one I like is which regret is bigger to you, trying something and failing or never testing what’s possible? I think that’s a good one. Another philosophical one. Okay. Let’s change gears a little bit here. So for successful, we’ll say mid-career advisors, why do you think the biggest risk is oftentimes not making the wrong move, but choosing the status quo by default?

Mindy Diamond:

Answering it from the perspective, we’ve had a lot of senior advisors that say, “I look back on my career and if only I had made the move or gone to this 15 years ago.” So I think that’s the you get comfortable in the discomfort, it’s easier to stay put, and then before you know it in your head, you’re too old or you’re too settled or you’re too entrenched and you can’t go or it’s too late to go. Or in some cases, you’ve got so much unvested deferred comp, it’s too expensive to go. And so I don’t think that’s only about mid-career. I think you want to make sure that you’ve lived a professional life that’s not filled with regret. That’s really what I think.

Louis Diamond:

No doubt about it. I think too, the fear of making the wrong move, call it buyer’s remorse, if you will. I honestly don’t really see it happen all that often. When I see it happen, it’s because someone went to their second or third choice firm because they got paid an extra 10% of their production. That’s where the wrong decision comes in. I usually find when advisors are thorough, they’re thoughtful, they’re making decisions for the right reasons, and there is a base level of motivation to do something different. You can’t really make the wrong choice. And I think, but again, it’s risk tolerance, et cetera. Let me give you two more questions here. What’s one step an advisor can take today to create clarity without committing to change?

Mindy Diamond:

Well, that question is the fundamental definition of how you and I see the world. So we traffic in advisors that are 10 years, 20 years from making a move or may never move. To us, it’s just about the relationship. That may sound foofy and crazy, but it is the truth. And so those conversations are all about being self-aware. That’s number one. Know thyself. Being self-aware of what’s important to me, what can I live with, how much risk tolerance do I have, et cetera. And then it’s also about having a clear understanding about what’s possible. So continuing to have conversation with people like you and I, continuing to read AdvisorHub or whatever it is about transitions that happen. Understanding the opportunities that are out there is not necessarily because you’re going to go take one of them or you’re going to change, but knowledge is power. It empowers you where you are. It’s competitive analysis, and that’s smart. That can only serve you well.

Louis Diamond:

Yep. I completely agree. One last question here, and I think probably a lot of people l

Andy Schwartz CEO, OnePoint BFG Wealth Partners | Kevin Spahn Founder, Spahn Financial (now OnePoint BFG)

Two former Northwestern Mutual advisors, two very different paths. Andy Schwartz and Kevin Spahn share what it takes to build, grow, merge, and create lasting enterprise value.

In Summary

What separates a successful advisory practice from an enterprise with the ability to grow well beyond its founders?

Andy Schwartz and Kevin Spahn offer two different perspectives on that question. Both spent decades at Northwestern Mutual, but their paths eventually diverged. Andy left to help build what is now OnePoint BFG Wealth Partners, an $18B+ firm expected to surpass $20B by year-end. Kevin built one of Northwestern Mutual’s top practices before deciding to merge his business into OnePoint and become an equity partner.

Louis talks with Andy and Kevin about the decisions behind both journeys: creating a true firm rather than an aggregation of practices, transitioning advisors from 1099 to W-2, using outside capital without relinquishing control, rethinking succession, and determining when equity in a larger enterprise can offer greater opportunity than continuing to build alone.

Underlying it all is a factor that’s much harder to quantify: trust.

The Storyline

Andy Schwartz and Kevin Spahn have known each other for roughly 30 years. They met while both were building careers at Northwestern Mutual, where Andy became an important mentor to Kevin as Kevin transitioned from practicing law and estate planning into wealth management.

After roughly 30 years at Northwestern Mutual, Andy and his partners left in 2015 with approximately $3B in assets to launch independently. What began as Bleakley Financial eventually became OnePoint BFG Wealth Partners, an $18B+ enterprise that Andy expects will surpass $20B by the end of 2026.

That kind of growth required more than attracting assets. Andy describes the evolution from a predominantly 1099 structure into a firm where more than 85% of advisors and AUM are now W-2. The shift created a more cohesive enterprise, gave advisors access to equity, and ultimately positioned OnePoint to bring in minority capital from Joe Duran’s Rise Growth Partners.

Andy makes an important distinction about that relationship: OnePoint is “private equity invested,” not “private equity owned.” The structure gave the firm capital and expertise while allowing its partners to retain control.

Kevin faced a different decision. After more than 30 years at Northwestern Mutual, his practice had grown to 18 people and approximately $2B in assets. He was happy at the firm, but his clients had evolved, his business had become increasingly complex, and the internal succession plan he once envisioned carried risks he could no longer ignore.

He could have built an independent firm himself. Instead, he chose to merge with OnePoint.

The decision wasn’t driven by the largest possible check. Kevin saw the opportunity to become an equity partner in a larger enterprise, give his team and clients a more durable future, and leverage infrastructure he didn’t want to recreate himself.

For both men, the story ultimately comes back to the same principle: The right economics matter, but sustainable partnerships require trust, shared philosophy, and the belief that everyone involved can create more value together than separately.

Topics Covered

• Building an enterprise versus building a practice
• Northwestern Mutual and the path to independence
• OnePoint BFG Wealth Partners’ growth from ~$3B to $18B+
• Organic growth versus M&A
• Creating a growth-oriented advisor culture
• Moving from a 1099 model to a predominantly W-2 structure
• Equity ownership and advisor alignment
• Minority private equity investment
• Rise Growth Partners and Joe Duran
• Internal succession versus an external merger
• Selling versus merging an advisory business
• Merging versus teaming versus going it alone
• Evaluating equity versus cash in a transaction
• The economics of leaving a captive firm
• Centralization versus advisor autonomy
• Trust as a factor in partnerships and transactions

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

How did Andy and Kevin’s 30-year relationship ultimately lead to a transaction? (04:11)
Kevin explains how Andy helped him transition from attorney and estate planner into wealth management, beginning a professional relationship that would eventually make their partnership possible decades later.

Why did Andy leave Northwestern Mutual after roughly 30 years? (08:45)
Andy describes wanting greater flexibility, a multi-custodial platform, and more optionality for clients and the business—a decision that ultimately led to the creation of OnePoint BFG.

Why did Kevin decide his longtime Northwestern Mutual practice needed something different? (15:49)
Kevin explains how his clients, service needs, and business evolved over time, while concerns about his original internal succession plan led him to consider a different path.

What has driven OnePoint’s growth from approximately $3B to $18B+? (21:41)
Andy outlines the firm’s emphasis on client experience, advisor experience, organic growth, and carefully selected inorganic growth—and why helping advisors grow is fundamental to the model.

Why does Andy say OnePoint is a firm rather than an aggregator? (23:54)
The distinction comes down to alignment, shared responsibility, centralized resources, equity, and a partnership structure in which advisors are accountable to one another.

How did OnePoint convert a predominantly 1099 advisor base into a W-2 enterprise? (29:26)
Andy explains why capital and equity became necessary to build the next stage of the business and why trust was essential to bringing advisors into a more integrated structure.

Why did OnePoint choose minority private equity investment? (33:13)
Andy shares why Rise Growth Partners offered something previous potential buyers had not: a structure designed to benefit the broader advisor partnership while preserving control.

Why did Kevin merge with OnePoint rather than shop his practice broadly? (36:43)
For Kevin, maximizing price wasn’t the objective. His decision centered on trust in Andy, confidence in OnePoint’s infrastructure, and creating a strong future for clients and employees.

Why did Kevin choose equity in the larger firm instead of simply cashing out? (40:57)
Kevin explains why he believes participating in the future growth of a larger enterprise offers a compelling alternative to relying solely on the future growth of his own practice.

How should advisors evaluate the “golden handcuffs” that can make leaving difficult? (46:42)
Andy argues that the analysis needs to compare what an advisor gives up with the potential growth, economics, equity, and leverage available on the other side.

How much conformity does a true enterprise require? (49:06)
Andy explains why OnePoint sits somewhere between complete advisor autonomy and complete centralization, seeking enough consistency to create enterprise value without eliminating entrepreneurial flexibility.

What would Andy and Kevin tell their younger selves? (52:06)
Kevin emphasizes surrounding yourself with the best people possible, while Andy reflects on having the courage to make a difficult change after a successful 30-year run.

Key Takeaways

• Building enterprise value requires more than asset growth. OnePoint’s evolution included changing its ownership structure, integrating advisor practices, creating equity opportunities, and investing in centralized capabilities.
• Organic growth remains central even in an M&A-driven market. OnePoint targets approximately 10% organic growth and evaluates prospective partners partly on whether they are growth-oriented and whether the firm can meaningfully help them grow.
• A collection of successful advisors does not automatically make a firm. Andy sees shared ownership, alignment, accountability, infrastructure, and centralized services as critical distinctions between an enterprise and an aggregator.
• Outside capital does not have to mean giving up control. OnePoint chose a minority investment from Rise Growth Partners that provided capital and strategic support while leaving control with its operating partners.
• Succession can expose risks that growth may obscure. Kevin began reconsidering his internal succession strategy when he recognized its dependence on his continued production, key employees, and the future economics of an aging client base.
• The highest purchase price isn’t always the most valuable transaction. Kevin prioritized equity participation, infrastructure, continuity for his employees and clients, and confidence in his future partners over broadly shopping his business for the highest bid.
• Trust can determine whether structural change is possible. From OnePoint’s 1099-to-W-2 conversion to Kevin’s decision to merge, both guests repeatedly point to established trust as the foundation that allowed significant business decisions to happen.

https://youtu.be/jkIoynpZj6Y

Quotable Moments

“The biggest mistake advisors make is they buy their own bullshit.”
— Andy Schwartz

“We’re not an aggregator, we’re a firm.”
— Andy Schwartz

“The biggest issue is trust. Either they trust you or they don’t.”
— Andy Schwartz

“I wasn’t looking to sell my business. I was looking to merge it.”
— Kevin Spahn

“You have to trust them. You have to see that they provide value. And you need to be on the same page philosophically.”
— Kevin Spahn

“Associate yourselves with the best people you can… It accelerates your trajectory in ways that you can’t do on your own.”
— Kevin Spahn

FAQs

Why did Andy Schwartz leave Northwestern Mutual?

After approximately 30 years at Northwestern Mutual, Andy and his partners wanted greater flexibility, the ability to operate on a multi-custodial basis, and more optionality for clients and the business. They left in 2015 with approximately $3B in assets and launched the independent firm that ultimately became OnePoint BFG Wealth Partners.

How large is OnePoint BFG Wealth Partners?

At the time of the interview, Andy says OnePoint manages more than $18B and expects to exceed $20B by the end of 2026, even without additional organic growth.

What has driven OnePoint’s growth?

Andy points to three priorities: client experience, advisor experience, and growth. The firm targets approximately 10% organic growth while also expanding through acquisitions and partnerships with advisors it believes fit the OnePoint model.

Why did OnePoint move advisors from 1099 to W-2?

The firm wanted to evolve from a platform supporting individual practices into a more integrated enterprise. That required creating firm-level economics and equity that could be used to attract, retain, and align advisors. Today, Andy says more than 85% of OnePoint’s advisors and AUM are W-2.

What does “private equity invested, not private equity owned” mean?

Rise Growth Partners holds a minority, non-controlling interest in OnePoint. The investment provides capital, expertise, and strategic support while the operating partners retain majority ownership and control of the business.

Why did Kevin Spahn leave Northwestern Mutual?

Kevin says he remained happy at Northwestern Mutual, but his practice and clients had evolved. His work had shifted increasingly toward investments and complex high-net-worth planning, while he also began identifying risks in his intended internal succession plan.

Why did Kevin merge with OnePoint rather than launch his own independent RIA?

OnePoint already had the infrastructure, people, and capabilities Kevin would have needed to build himself. The merger allowed him to focus on clients while becoming an equity partner in a larger enterprise he believed could grow faster than his standalone practice.

Why didn’t Kevin shop his practice to multiple buyers?

Kevin says his decision was driven primarily by trust. He had known Andy and other OnePoint partners for decades and believed the firm offered the right future for his clients and employees. His choice ultimately came down to staying at Northwestern Mutual or joining OnePoint.

How do Andy and Kevin suggest advisors evaluate a potential partner?

Their discussion points to three fundamental considerations: trust, demonstrable value, and philosophical alignment. Economics matter, but both argue that a sustainable partnership depends on confidence in the people and business on the other side of the transaction.

After approximately 30 years at Northwestern Mutual, Andy and his partners wanted greater flexibility, the ability to operate on a multi-custodial basis, and more optionality for clients and the business. They left in 2015 with approximately $3B in assets and launched the independent firm that ultimately became OnePoint BFG Wealth Partners.

At the time of the interview, Andy says OnePoint manages more than $18B and expects to exceed $20B by the end of 2026, even without additional organic growth.

Andy points to three priorities: client experience, advisor experience, and growth. The firm targets approximately 10% organic growth while also expanding through acquisitions and partnerships with advisors it believes fit the OnePoint model.

The firm wanted to evolve from a platform supporting individual practices into a more integrated enterprise. That required creating firm-level economics and equity that could be used to attract, retain, and align advisors. Today, Andy says more than 85% of OnePoint’s advisors and AUM are W-2.

Rise Growth Partners holds a minority, non-controlling interest in OnePoint. The investment provides capital, expertise, and strategic support while the operating partners retain majority ownership and control of the business.

Kevin says he remained happy at Northwestern Mutual, but his practice and clients had evolved. His work had shifted increasingly toward investments and complex high-net-worth planning, while he also began identifying risks in his intended internal succession plan.

OnePoint already had the infrastructure, people, and capabilities Kevin would have needed to build himself. The merger allowed him to focus on clients while becoming an equity partner in a larger enterprise he believed could grow faster than his standalone practice.

Kevin says his decision was driven primarily by trust. He had known Andy and other OnePoint partners for decades and believed the firm offered the right future for his clients and employees. His choice ultimately came down to staying at Northwestern Mutual or joining OnePoint.

Their discussion points to three fundamental considerations: trust, demonstrable value, and philosophical alignment. Economics matter, but both argue that a sustainable partnership depends on confidence in the people and business on the other side of the transaction.

Related Resources

Rise and Reinvent: Joe Duran on Building and Rebuilding World-Class Firms

From Insurance Sales to $8B RIA: A Northwestern Mutual Breakaway Story

The 4th Annual Advisor Transition Report

Andy Schwartz
Co-Founder, Managing Partner, and Chief Executive Officer

Andy Schwartz is the Co-Founder, Managing Partner, and Chief Executive Officer of OnePoint BFG Wealth Partners, where he also serves as a Wealth Management Advisor. A CERTIFIED FINANCIAL PLANNER® with more than 40 years of experience, Andy has built his career around helping clients make confident, well-informed financial decisions at every stage of life. He works extensively with physicians and business owners on wealth building, retirement planning, and tax-efficient asset transfer across generations.

A 2026 finalist for Wealth Management Awards CEO of the Year (under $25B AUM), Andy brings the same discipline to leading the firm that he brings to client relationships: comprehensive planning, long-term thinking, and an unwavering commitment to independence and integrity.

Beyond his client work, Andy is deeply invested in the advisory profession itself. He co-hosts The Advisor’s Compass podcast, offering candid, practical guidance on the business and responsibilities of being an advisor. His mentorship philosophy is straightforward: pass the ladder back down.

His industry recognition spans more than a decade, including Top 1,200 Advisor by Barron’s (2018–2024), Top 250 Wealth Advisor and Best-In-State Wealth Advisor by Forbes (2018–2024), Top 400 Financial Advisor by the Financial Times (2018–2020), and Top 100 Independent Advisor (2020–2023). He was named Executive of the Year by NJBIZ in 2019 and was a finalist for the Invest in Others Lifetime Achievement Award for more than 20 years of service with NJ SEEDS.

Andy holds a B.S. in Finance and Marketing from Rowan University and is actively involved with Nourish NJ, the Navy SEAL Foundation, the Jewish Federation of Greater MetroWest NJ, and JSDD. Outside the office, he enjoys golf, reading, and time with his family at the beach.

Kevin Spahn
Partner and Wealth Advisor

Kevin Spahn is a Partner and Wealth Advisor at OnePoint BFG Wealth Partners, bringing more than three decades of experience in comprehensive financial planning to his clients and the firm.

Kevin’s path to wealth management is rooted in the law. After earning degrees from the University of Notre Dame and the University of Wisconsin, he began his career as a practicing attorney before making a deliberate pivot toward financial planning in 1993. He joined Northwestern Mutual, then founded Spahn Financial, building a practice centered on thoughtful, holistic planning for families and business owners. That practice joined OnePoint BFG Wealth Partners in 2025.

His approach has remained consistent throughout: help clients build and protect wealth not just for themselves, but for the generations that follow. Kevin works with clients on comprehensive financial plans that account for the full picture, understanding that the impact of good planning extends well beyond an individual portfolio to families, businesses, employees, and the broader community.

Kevin is based in the greater Chicago area.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise

A conversation between Louis Diamond, Andy Schwartz, CEO of OnePoint BFG Wealth Partners and Kevin Spahn, Founder of Spahn Financial (now OnePoint BFG).

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise. It’s a conversation with Andy Schwartz, CEO of OnePoint BFG Wealth Partners, and Kevin Spahn, founder of Spahn Financial, now OnePoint BFG. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. Each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions, and more, inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

There’s a big difference between building a successful practice and building an enterprise. I think Andy Schwartz and Kevin Spahn offer a unique perspective on that distinction from two very different sides. Both spent decades in the Northwestern Mutual system. Andy ultimately left to build what became OnePoint BFG Wealth Partners, taking the firm from roughly three billion to nearly 20 billion and transforming just about every aspect of the business along the way. Kevin built one of Northwestern Mutual’s top practices before reaching a different inflection point, deciding what he wanted the next phase of his career and business to look like. Rather than go independent on his own or simply monetize what he had built, he chose to become part of Andy’s growing enterprise.

That makes their story particularly relevant for our Build, Grow, and Transact series. Andy can speak to what it takes to build a firm capable of becoming an acquirer, from converting advisors from 1099s to W-2s, to creating equity opportunities, to bringing in outside capital while remaining very deliberate about being private equity-invested rather than private equity-owned. And Kevin brings the seller’s perspective, how you evaluate the economics, the trade-offs, and ultimately the people you’re trusting with the business you spent more than 30 years building. Because whether you’re building, buying, or considering a transaction of any kind, the numbers are only part of the equation. As you hear from both Andy and Kevin, trust may be the most important currency of all. So let’s get to it.

Andy and Kevin, thank you so much for both joining us today.

Andy Schwartz:

Great to see you again, Lewis. Thank you for having us.

Louis Diamond:

I’ve been excited about this interview for a bunch of reasons. One, our Build, Grow, Transact series has become a real staple of our show and we got lots to talk about there. But also, the friendship, the relationship that you two have had for over 30 years really stood out to me. So before we get into the nuts and bolts, talk about your relationship. How’d you guys meet, and how did your career stay so intertwined together when you’re in different geographies and at different firms, and have each been very successful in your own rights?

Andy Schwartz:

Sure. Kevin, do you want to start with that?

Kevin Spahn:

Sure. I started in this career in 1994 and met Andy sometime after that. He was a more advanced financial planner. I was an attorney, and then I transitioned into this business. So when I first joined Northwestern Mutual, which is my first broker dealer, I didn’t really have a background in investments. At the time, a lot of Northwestern Mutual reps were learning the investment business because they maybe originally started with Northwestern Mutual focusing more on insurance planning.

My background was more estate planning. At the time, if you think early ’90s, if you did estate planning, insurance often went hand in hand with that. The estate exemption in early 1990s was about $600,000. So if you pass more than $600,000 to your children, there was a 55% tax. One way around it was to put insurance in an irrevocable trust, help cover the tax that way. So it really was a popular common strategy back then, and it’s really what got me into the business.

But I quickly realized that I didn’t want my future to be insurance and estate planning. And there was a conflict if you acted as someone’s attorney and sold insurance. So I had to pick one way or the other. I decided long-term it would be better for me to move into the wealth management space. But with that little background in that, I had a lot of work to do. So took a lot of tests, became a certified financial planner.

But the person that helped me the most along the way was Andy. We became friends, we sat on committees together. That’s really how we met, I would say. So we worked side by side interacting with our home office and representing the field, bringing issues to the home office that we thought were beneficial to the field. As we did that together, I got to know Andy. And then separately, I learned from him how he built his business and how they would review clients’ portfolios and come up with solutions. So I really credit Andy with helping me more than anyone else to transition from attorney, financial planner doing more estate planning insurance to wealth management.

Louis Diamond:

Very cool. Hey, I would say, maybe I’m a little biased, that, Kevin, you picked the right path in hanging up the law shingle and coming into wealth management.

Kevin Spahn:

I tell a lot of people I’m a reformed attorney.

Andy Schwartz:

Great.

Louis Diamond:

Exactly. My dad would say the exact same thing. Very common at dinner tables in the Diamond households.

Andy Schwartz:

I was always grateful that I wasn’t smart enough to be an attorney.

Louis Diamond:

There we go.

Andy Schwartz:

That’s where my gratitude lies. Yeah.

Louis Diamond:

There we go.

Andy Schwartz:

Some would say he’s too smart.

Louis Diamond:

There we go. Andy, question for you. I mean, anyone who is at or was at Northwestern Mutual, I mean, you’re like Elvis to them. It’s absolutely crazy the amount of fanfare and brand recognition that you and your brother Scott have. But for those who maybe missed your first podcast appearance with us a number of years ago, or aren’t or weren’t within the Northwestern Mutual system, or haven’t been familiar with Bleakley and now OnePoint BFG, just give us the cliff notes, the origin story, how you got into the business, and how’d you get from here to there?

Andy Schwartz:

Yeah. So the origin is probably pretty common, probably by accident. Going into my senior year in college, I was working in a restaurant, had a falling out with my boss. I happened to be dating a woman who was living with a general agent with Fidelity Union Life. No one will have ever heard of Fidelity Union Life, but their secret sauce was they sold life insurance to college seniors on a note. So if you can get a $10 money order, because where I went to school, nobody had a checking account, then you could basically get a note signed and they would buy insurance. And then when they graduate, hopefully they’d pay for it. I started selling life insurance my senior year in college. And then my twin brother Scott, who is my partner, and has been for over 40 years, he took an interview with what was the nucleus of our present firm actually.

I just went up to Northern New Jersey in May of 1984 because I was an expert. I had been selling life insurance to college kids for six months, so I knew everything you had to know. We met with these guys, and we both ended up joining them. So that was a Northwestern Mutual district agency, and that was 1984. We got licensed right away. I got my CFP in ’86. We always knew that it was going to be about planning. So I think we had the right idea. We were a little ahead of the curve because there weren’t a lot of CFPs in ’86. We got securities license immediately. So before Northwestern had securities license, we got securities license with US Life actually.

And then it was really a volume business, a client-building business. We always tried to act as a firm and share resources. We were small, but like a lot of people, we started out selling A shares and B shares and C shares, doing financial planning, selling insurance, and then we made a lot of really good hires along the way. And then after 30 years at Northwestern Mutual, which was a great experience for me, and I have nothing but respect for the institution and certainly the advisors that are there, Kevin certainly was one of them, and I know he feels the same way, but we just wanted to have a little more flexibility. We went independent about 11, almost 12 years ago. We wanted to be able to be multi-custodial. We wanted to have a little bit more optionality for our clients and for ourselves.

We left Northwestern at three billion or so in assets, and that was in 2015. It’s in March of 2024, I get introduced to this guy with a crazy accent named Joe Duran. Funny, probably the only person in the industry that had no idea who Joe Duran was me. I’d never heard of Joe Duran. I don’t pay attention. I worry about our firm. I don’t worry about what’s going on outside. So I get introduced to Joe by a mutual friend, and we had an interesting conversation, and it took us probably about four or five months to figure out what we wanted to do. And then in August of ’24, myself and my three partners, we rolled in. And then in ’85, the rest of the firm rolled in. And we can talk a little bit more about that.

Today we’re 18-plus billion, growing quite a bit. We’ve been very lucky that we’ve made some very good decisions along the way. We’ve made some bad ones too. But most of the decisions had to do with the people that we hired, the people that we brought on to help us, because I think it’s really important. I always say that the biggest mistake advisors make is they buy their own bullshit, and I try not to, and I realize that I’m smart enough, but I’m certainly not the smartest guy. I’m rarely the smartest guy in the room. So what we try to do is hire lots and lots of really smart people. And we’ve done that. They’ve been loyal to us, we’ve been loyal to them. Yeah, so we’re blessed to have a really great team and lots of good partners. Yeah.

Louis Diamond:

Yeah, we’ll definitely get into more of the nuts and bolts of the decision to take on capital, partner with Joe Duran’s Rise, but that’s an amazing background. Andy, I have to give you credit because your style, and I think I’m sure there’s business benefits, but it comes from a good place, I’m sure. But the coaching and consulting and just assistance that I’ve heard you provide to so many past and current Northwestern Mutual advisors through sports camps is absolutely incredible. It’s very near and dear to my heart because we always try to lead with education and helping people. So I just wanted to call that out, that your reputation for just providing amazing guidance and coaching to advisors is unparalleled.

Andy Schwartz:

And it’s been the best part of our journey. We’ve been able to help so many people. We get way too much credit by the way. So everybody gives us way too much credit. But the way I look at it is, I’ve been able to leverage my life because I’ve been able to build a great life for myself and my family, but we’ve been able to leverage that, and that’s where the real gift is. So yeah, it’s been a joyful journey for us.

Louis Diamond:

Amazing. Kevin, question for you. You walked through your little bit unorthodox background to get into Northwestern. Can you talk about where your personal practice is today? And then I want to ask you about the decision to leave Northwestern and sell and team up with Andy and team.

Kevin Spahn:

Well, I have to go back to the beginning. What was attractive to me about this business is I went from a career which was confrontational adversarial. I was a trial attorney for six years, and every day I would fight with people over things I didn’t necessarily have a personal interest in and I didn’t really believe in always. But the adversarial confrontational nature wasn’t really my personality, and I would take it too personally. So sometimes I’d go home in a bad mood because I was fighting with somebody taking a deposition.

At night, after so many years as a trial attorney, I started going to people’s houses and doing wills and trusts. And that’s where the dynamic of working with a client or a potential client, feeling that you helped them and walking out of the meeting where they would appreciate what you did for them, and you build a relationship and actually all of a sudden have a friend, that dynamic was attractive to me. That’s really what got me to transition into the business.

So I think it was really helpful to me at the beginning of this career. As Andy said, we all grew our businesses one client at a time. There’s a lot of doors closed, phones hung up on. There’s many people that don’t want to talk to you. There’s many people that don’t call you back. There’s many people that you think you’re getting somewhere with and you don’t. And that’s difficult for people because people often, young reps take that as personal rejection.

I had the benefit of comparing what I was dealing with as a young financial planner to what I had dealt with as an attorney in litigation. I think it just was perspective that I knew I didn’t want to do that anymore. So the negatives to this business didn’t seem that bad to me. I loved the independence. I loved all the relationships that I was building. And that part of it is to this day my favorite part of the business.

When you ask about the present, what basically happens is you start out taking anybody and everybody as a potential client or as someone that you would be willing to work with. And then over time you work with more successful people. So where I’m at today is working with pretty successful people, but they’re all the same, meaning we like working with nice people. If people are nice, we work with them. I feel we can help anybody. Over the years, one client at a time.

The thing that I probably, if I could go back, would change is I think Andy and I are both good at meeting people and building trust and providing value, so that’s why they work with us. So I think that’s just something we’ve both been able to do. He’s much better than I am at building an organization. So I built an organization basically hiring people, that whenever we got too busy, I hired another person. Drawback in terms of that is, anybody that I interview I think is great, and I think they’d be great to join the organization. I like them all. In spite of that, I’ve also brought in many good people that I love.

At this point, my firm has 18 people. We’re a little subset of Andy’s larger firm. I think one of the most attractive things to me about joining Andy’s firm is what Andy mentioned before: the people. As opposed to me having to build this all out myself, going independent, Andy already did that. And he has the infrastructure that would allow me to just merge right into that and not have to go through the pain of figuring all that out, which I don’t even think I’m capable of, to be honest with you.

Louis Diamond:

You’re probably selling yourself short because the way I understood it, you had one of the top practices within the entire Northwestern Mutual systems, and it’s a firm filled with very successful advisors.

For you, Kevin, what was the driving force to leaving NM after all these years? What was bothering you or frustrating you that indicated to you that it was time to do something different?

Kevin Spahn:

To be honest with you, I was pretty happy at Northwestern Mutual. I love the company and the people. I still have many good friends there that I truly miss. The big thing for me, I don’t know if it was any one thing, to be honest with you, is Andy said there’s optionality, especially on the investment side. I think one of the things that happened to me is, when I first started, I was 31 years old, and most of the potential clients that I would meet and work with, they weren’t what I would call today great investment clients. They didn’t have a lot of money. They had great futures. They might’ve been earning significant income or on the way to earning significant income. So what did they need at that point in their life? They needed planning. They needed protection. They didn’t really need investment management because most of their investments were going into their 401(k).

But a lot of those clients that we would take on, and I think that’s the big advantage of Northwestern Mutual, you take on clients that a lot of the investor firms don’t want because they don’t have large investment portfolios. But at some point down the road, all of a sudden you wake up and they do have large investment portfolios. So you bring them in as clients that might buy life insurance from you or disability insurance or something like that. And then you help them, and you give them advice, and you build a relationship with them. Down the road, they make more and more money. They leave jobs, they roll 401(k)s, they have the ability to invest money, stock options, things like that. Next thing you’re doing more comprehensive planning that incorporates investments.

As that progresses even further, you work with larger and larger clients, much more significant net worth, more complexity, bigger tax issues. Some of the strategies and opportunities that we now have at this independent RIA are very attractive for these high-net-worth clients. Along the same lines, less of what I do at this point in my career is insurance, mostly because a lot of the people that I meet are older, they already bought insurance, they’re looking more for investment advice as opposed to insurance. So one of the things that most attracted me to Northwest Mutual was their strong insurance products, which helped me for many years. As time went on, I was doing less of that.

Louis Diamond:

Makes complete sense. So it was a changing of what clients wanted and just the circumstances of your clients where you said, “What got me here when I was 31 was insurance planning, and that’s what my clients needed. But as my practice has evolved, I’ve aged, my clients are older, have more money, the focus shifted from insurance to investments.” And then the distinction was, am I at the best place to run investments in addition to insurance planning, et cetera? It’s a very interesting dynamic. Just the shift in basically your legacy clients was what drove you to consider change.

Kevin Spahn:

That was a big factor. I think the second big factor was I had my own firm with 18 people. My succession plan was that at some point I would shift ownership of the firm to people that worked with me. So as they owned more of the firm, they would have revenue that was currently at the time being paid to me. In my mind, as it shifted to them, they would buy me out using revenue from the clients that we already had. And I realized that there were some issues with that. In our business, as you get older, in your client’s age, they start taking money out of their portfolios. So everyone understands that in our business, the younger average age client you have makes your book more valuable.

I was the biggest driver of new business at my firm, and I started to see that there were some problems with my succession plan. They included, if something happened to me during this succession, that would be a real problem for the people that were buying my business from me if I went that way. If something happened to some of my key people, that would’ve been a problem as well. So it was really attractive to me to… I wasn’t looking to sell my business, I was looking to merge it. So I merged it with Andy’s business.

I believe that Andy and what he’s put together and the actual idea of having partners. So I never really had partners, but now I do. Having partners that we’re all on the same page, we all have similar backgrounds, we all bring something different to the table, and we can learn and benefit from working with each other. But also, owning a little piece of a much larger firm was, number one, it put me in a better position in terms of the potential risk of something happening to me or one of my key people. But secondly, I just think it’s more likely to grow at a greater pace than my firm would’ve as I aged from my 60s to my 70s.

Louis Diamond:

Very interesting. It’s a great realization. I think it’s one that probably every firm owner grapples with at some point, is the romanticism or the ease, some would say, of an internal succession plan. Rewarding those who have helped you build the firm is something I think everyone is interested in. But once that’s put into practice, whether it’s because of capital or sky-high valuations or right people on the bus or risk, et cetera, nowadays oftentimes leads to a firm owner looking at a transaction, whether it’s a merger, a sale, a private equity, capital infusion as a means to solve for succession. So it’s a very interesting way you framed it.

Andy, I want to turn it over to you for a little bit. So you mentioned when you launched Bleakley Financial, which was the old name of your firm, out of Northwestern, you’re about three billion. I think I read that you’re about 10 billion or so when Joe Duran and Rise invested you in 2024. You just said you’re at 18 billion now in the middle of 2026. That is absolutely incredible and amazing.

Andy Schwartz:

We’ll be well over 20 by the end of the year without any additional organic growth.

Louis Diamond:

That’s absolutely incredible.

Andy Schwartz:

We’ve got a lot going on right now.

Louis Diamond:

What’s actually driven that? What’s been the playbook?

Andy Schwartz:

The three areas that are most important for us, and we had our town hall this morning, and we always talk about the things we focus on as a group, the first and most important is the client experience. I always say to people, if you are their advisor, then that means someone else isn’t. These people, they all deserve to be really well taken care of. They deserve the best service, they deserve the best advice. So that’s something we take really personally. So client experience first.

Then we also understand that we don’t just work for clients, we work for our advisors. So I have two jobs. I have, I don’t know, 500 clients I service with my team, and I work for Kevin and 36 other partners and all of our employees. Because again, I recognize that the decision Kevin made… We’re in the middle of a transition out with another advisor, and we pretty much talk to her every day, and I know how hard this is. A transition is so difficult. When you come from a good place, because any of the Northwestern advisor who joins, they’re coming from a good place, it’s not like they have to go anywhere, it’s difficult. So we have the massive responsibility that three or four or five or 10 years from now, that there better be hugs around that this was the best decision ever made or otherwise. That’s the kind of thing that keeps me up at night.

So we’ve got to take care of our client experience, we’ve got to take care of our advisor experience. And then obviously, we’ve got to grow the firm so the firm grows organically. So part of this whole idea of serving our advisors is we have to help our advisors grow. I talk to a lot of people on the acquisition side, and if I’m talking to an advisor, it doesn’t matter how big they are, we kind of think of it as a OnePoint way. There’s flexibility in the OnePoint way. But if I can’t help them grow, I don’t want them, because I say it all the time, I’m not the mafia. I’m not here to get a taste.

Louis, if you weren’t interested in joining us, if I thought that we could help you grow by doing that, then I want you bad. If I don’t think I can help you grow because we’re so different, or because you’re not going to adapt what we do, or there’s no leverage in it, or you’re already better than we are, I don’t want it. So for us, organic growth, number one, and I think you know the industries well enough, that’s got to be the key. We shoot for 10% organic growth. We’re at a little over 5% so far halfway through the year. So assuming we have the similar second half of the year, we’ll hit our 10. Last year we’re at 7.5%.

The second is the inorganic growth. If you truly build a platform, if you truly build a firm that advisors know that they’ll be supported, that they’ll be loved, and you’ll help them grow their businesses, it does make it easier for us. We’re not the highest bidder typically. We can’t. We respect our client’s capital, we respect their equity, so therefore we’re not going to go out there. We’re not an aggregator, we’re a firm. But I think that if we can get that message across, and I think we have, then advisors join us. So that’s been a big part of the growth. And then the market’s helped. Obviously, over the last two years, the market’s been helpful. So that’s how we’ve gone from 10 to 18 and on our way to 22 by year-end.

Louis Diamond:

This is absolutely incredible. Any advisor or firm owner would say organic growth is important, but just saying it’s important doesn’t mean it’s going to happen. So what are the ways in which you help your advisors or your own practice grow organically? What is it that OnePoint is doing for your advisors?

Andy Schwartz:

Starting with bringing on growth-oriented advisors. I mean, look, Kevin Spahn and I come from the same place. We learned how to sell. The great thing about coming out of whether they’re broker dealers or out of the different insurance BDs is, these are people that know how to sell. These are people that don’t think that selling is a bad word. A lot of times you go to the wirehouses and they’re not necessarily sales guys. They’re really smart. They think that they’re investment mavens and investment geniuses. I’m not interested in investment geniuses. I’m interested in people that want to take care of their clients, provide everything they can, clients first, do the proper planning, be good advisors, but they’re growth-oriented.

So as long as we’re talking with the right advisors. Again, if I’m talking to advisor and they might have a big practice, if they’re not growers, we’re not interested. There’s a sense of responsibility for all the partners because we are a true partnership. It’s not an aggregation. This is a firm. I’m responsible for Kevin. Kevin’s responsible to me. All of our partners are responsible to each other, because if we’re going to do a 10% organic growth target, and if some partner is negative 3%, we don’t put them through the spanking machine, but everybody is very aware of where everybody is and nobody wants to let their partners down.

I think either you’re a growth-oriented advisor or you’re a zoo-fed bear. There’s another expression that I got from another Rise Growth Partner or Rise Growth firm. We all kind of communicate and talk to each other. And I was talking about zoo-fed bears, and he said, we call them house cats that think they fight. So they’re house cats, but they have no claws. But I think if you’re careful about who you bring on as partners, and if they are workers, growers, they understand that their job in life is to serve the people. We talk about referrals, we do lots of training to help on referrals. We work on organic growth strategies from the firm, but a lot of it comes from the advisors themselves.

Louis Diamond:

Makes sense. So it sounds like, to boil it down, it’s being really selective and having a really clear sense of who’s the right fit for your firm. Not that there’s not amazing advisors out there, but just because you’re an amazing advisor, doesn’t mean you’re the right fit to join OnePoint.

Andy Schwartz:

I think the one big distinction and difference is other than the fact that we are minority-owned with private equity. So we own our business. I mean, I’m the CEO of the firm. I also have the biggest book in the firm. At least for right now, I mean, Kevin was transitioning, so I’m sure next year he’ll be the leading advisor. But I lead the firm, because as far as I’m concerned, you have to lead by example. We are completely aligned. I know exactly what Kevin does every day because I do the same thing. I’m not some attorney or accountant or private equity boss that’s saying, “Oh, I’ve got an idea for growth. We’ll just raise our fees by 5%.” Brilliant. Yeah, we are completely aligned, all of us. I think that makes us a little bit unique, and it really helps us, I think, in our growth trajectory.

Louis Diamond:

I would agree. The challenge that a lot of advisors-turned-firm-owners or turned-enterprise-builders have is the tug of war between the client work, which either is their ultimate passion and driving force, or it’s something they’re really good at minimum, versus being the owner, the operator, et cetera. I resonate very much, Andy, with the way you handle it. I do the same thing running a company, but also working with advisors. To me, I need to do both in order to do my job well. But that tug of war is tough. So I’m curious, your firm is very large now, you’re a steward of external capital, and you have a $3 billion book yourself. How do you do it? How do you balance the two?

Andy Schwartz:

Well, fortunately, my kids are grown, so I’m not coaching sports anymore. So I do have a little more time than most. Look, we have a great team. So the idea that I run the firm… I mean, I lead the firm, I don’t run the firm. We have great partners. We have great… Our manager team is fantastic. So I mean, they really run the firm. But this is where my passion is for now. So I don’t mind. Days are typically pretty long. I don’t play golf during the week. Mara and I don’t travel probably as much as we should. Vacations are always a little bit mixed. There’s always room for calls and meetings and whatever.

But to me, I mean, I’m grateful to be in this situation. I’m enjoying it. This is such a privilege to be the person that people recognize as the leader of this bunch, of this group. I mean, it is the honor of my life. So I don’t think of it so much as work. It’s my advocation. It does get busy. There are some times where I have to remind myself, “Just enjoy the ride.” I get a little overwhelmed, but I get lots of help and that makes it possible.

Louis Diamond:

Yep. If you’re not doing the job of the folks that you’re encouraging and leading to do, how do you have fodder to train them, to teach them, to empathize with that?

Andy Schwartz:

Exactly, you don’t have the credibility. I can ask them to do almost anything because they know I do it myself, and I think that helps.

Louis Diamond:

Yep. So moving more into the decision to bring on private equity capital, what I thought was probably the most interesting component of your announcement that you took on PE investment was that you completely restructured or reoriented your firm prior to Joe Duran coming in 2024. Correct me if I’m wrong, but Bleakley Financial Group was almost all 1099 contractors. So everyone owned their own books of business, paid Bleakley a fee or an override for certain services. But now, today, over 85% of your advisors and your AUM are W-2 employees, meaning you converted them from 1099 to acquiring them or merging with them. To me, that’s the dream. It’s had to have been very, very, very hard and challenging because there’s so many aggregator firms or platforms that support independent advisors, but the value that they’ve created is fairly minimal relative to one cohesive firm. So can you just talk about that decision, a very big and brave decision to go down the path of acquiring or merging with the practices rather than letting them continue to operate independently?

Andy Schwartz:

Well, look, we had to… It’s funny because we had been having conversations for years with consultants, and they kept telling us what we had to do. Again, we’re not that smart, so we just kept thinking, “No, we don’t have to do that.” But we were told 10 years earlier that the only way that this thing has any value to the world is you’ve got to have EBITDA for the firm. We talked to all the smart people, we ignored all of them. But what happened was we needed capital and we needed equity in order to bring people on, because people aren’t just joining us just because we can help them grow a bigger business.

So the reason we went in the direction we went initially was we just needed capital. We wanted to grow the firm, and the only way we were going to get to is… What’s the old saying? What got us here is not going to get us there. So we needed capital. But we also realized that I had to have something I could sell in the marketplace. And people want equity. So they want cash, but they also want equity, because we’re talking to entrepreneurs. Kevin owned his own firm. He has $2 billion of assets. He wasn’t interested in being someone’s employee, but he was interested in being able to get leverage and be a partner and share equity in a larger firm that had the chance to grow even more. So what the gift that Joe Duran, the Rise folks gave us was that gift of structure and understanding. So that was really helpful, and that’s been a big part of our success.

Louis Diamond:

Yeah, it’s an amazing journey. Again, I think you could probably write a book or a case study on how that happened. I’m sure there were some downfalls, some people that weren’t all that excited about it, but the results speak for itself.

Andy Schwartz:

I think people ask all the time because I do get phone calls. People are trying to do this, and they’re struggling. It took us 90 days to basically do it. People say, “I’ve been at this for two years.” And the biggest issue is trust. Either they trust you or they don’t. At the end of the day, I always went to the advisor here, we were a firm for 30-plus years prior, and these guys knew that we always did what we said we were going to do, and we always did. If your people trust you, then you can do it. If your people don’t trust you, it isn’t going to work.

Louis Diamond:

In other words, your firm added immense value to the advisors as well. Aside from trust, if you weren’t providing a service or services that they found a value that they couldn’t access on their own, it would’ve been 85/15 going the other way for sure.

Andy Schwartz:

With Louis Diamond

Vanguard’s acquisition of Altruist could reshape RIA custody, bringing together Altruist’s technology with the scale, capital, and reputation of one of the industry’s best-known brands.

In Summary

Vanguard’s acquisition of Altruist brings one of the financial industry’s most established brands together with one of RIA custody’s fastest-growing challengers.

In this Rapid Reaction Industry Update, Louis Diamond looks beyond the reported $4B+ purchase price to consider what the combination could mean for advisors—what he sees as the good news, the potentially negative outcomes, and everything in between. Altruist gains the capital, scale, and brand recognition that could help it compete more aggressively for larger RIAs and breakaway teams. Vanguard gains a technology-forward custody platform and greater access to the independent advisor channel.

The larger implication may be increased competition across RIA custody. With Schwab and Fidelity controlling much of the market, a Vanguard-backed Altruist could create new pressure around technology, pricing, service, referrals, and innovation—while raising new questions about how Vanguard balances its growing advice business with its role as custodian.

The Storyline

RIA custody has long been dominated by Schwab and Fidelity, particularly since Schwab’s acquisition of TD Ameritrade. Altruist emerged as one of the few credible challengers, building its position around modern technology, lower costs, and an advisor-focused platform.

But technology was only part of the equation. For larger breakaway teams in particular, Altruist faced another hurdle: brand recognition. Advisors could be impressed by the platform while still wondering how clients accustomed to names like Merrill, UBS, Morgan Stanley, Schwab, or Fidelity would respond to an unfamiliar custodian.

Vanguard changes that equation.

Louis examines why the acquisition makes strategic sense for both companies, from Vanguard’s push to expand access to financial advice to Altruist’s opportunity to operate with the backing of a well-capitalized, long-term owner.

For advisors, however, the bigger story is what happens next. A stronger competitor in custody could affect everything from technology and pricing to referral opportunities and the choices available to breakaway advisors.

There are also important questions still unanswered. Vanguard operates its own advice businesses. Altruist’s speed and fintech culture may be tested inside a much larger organization. And while Vanguard says Altruist will remain independent, the longer-term operating model remains to be seen.

The deal may not change advisors’ options immediately. But it has the potential to change the competitive dynamics surrounding those options considerably.

Topics Covered

• Vanguard’s acquisition of Altruist
• RIA custody competition
• Schwab and Fidelity
• Altruist’s technology and Hazel AI
• Vanguard’s financial advice strategy
• Custodian brand recognition for breakaway advisors
• Advisor referral networks
• Custody and technology pricing
• Direct advice and custodian conflicts
• The future of RIA platforms and Supportive Independence

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Why is the Vanguard-Altruist acquisition significant for RIA custody? (03:53)
Louis explains why custody has remained highly concentrated around Schwab and Fidelity and how combining Vanguard’s scale and reputation with Altruist’s technology could create a much stronger third competitor.

What problem does Vanguard potentially solve for Altruist? (05:01)
Altruist has built a strong reputation among advisors for its technology, but larger breakaway teams have sometimes questioned whether clients would recognize or trust the brand. Vanguard could significantly reduce that concern.

Why does buying Altruist make sense for Vanguard? (07:00)
Vanguard has more than 50 million investors and has publicly discussed the need to expand access to financial advice. Louis considers how Altruist could give Vanguard both additional capacity and a stronger connection to independent advisors.

What does Altruist gain from Vanguard beyond capital? (09:51)
Louis discusses the significance of having a long-term, investor-owned parent rather than remaining dependent on successive rounds of venture capital, while gaining additional resources to develop custody, technology, and Hazel AI.

How could this acquisition change the choices available to breakaway advisors? (12:33)
The combination of Altruist’s technology with Vanguard’s brand could make the platform more viable for larger teams that previously hesitated because of client recognition and trust concerns.

Could Vanguard become a meaningful source of client referrals to RIAs? (13:42)
With millions of existing investors and more demand for advice than Vanguard can necessarily serve internally, Louis considers whether a future referral program connecting Vanguard clients with Altruist RIAs could become an important competitive advantage.

What are the potential risks of the Vanguard-Altruist combination? (16:54)
The acquisition also raises questions around Vanguard’s competing advice business, Altruist’s long-term independence, differences in corporate culture, innovation speed, and talent retention.

What could happen next across the custody market? (20:00)
Louis offers several predictions, including responses from Schwab and Fidelity, wider adoption of Hazel AI, a potential Vanguard-Altruist referral channel, and greater use of Altruist by breakaway advisors.

Key Takeaways

• Vanguard’s acquisition of Altruist could introduce a more formidable competitor into an RIA custody market heavily concentrated around Schwab and Fidelity.
• Vanguard addresses one of Altruist’s biggest challenges with larger breakaway teams: providing a widely recognized financial brand that advisors can more easily explain to clients.
• Altruist gives Vanguard a technology-forward entry point into RIA custody as Vanguard continues expanding its strategy around access to financial advice.
• Advisors could benefit from greater competition through pressure on custody and technology pricing, service, product development, and innovation.
• A future referral channel could become an important part of the combination, particularly given Vanguard’s enormous investor base and Altruist’s growing network of RIAs.
• The acquisition also introduces potential conflicts and execution risks, including Vanguard’s own advice businesses, the integration of two very different corporate cultures, and questions about whether Altruist can maintain its speed and independence over time.
• For breakaway advisors, the custody shortlist may have changed: Altruist can now pair its technology and fintech capabilities with the capital and reputation of Vanguard.

https://youtu.be/UlgCBjLXrnw

Quotable Moments

“Custody is really a trust business.”
— Louis Diamond (05:55)

“Every time a well-capitalized player shows up, especially in custody, advisors win.”
— Louis Diamond (12:33)

“Really, it’s tech-forward independence now without a brand trade-off.”
— Louis Diamond (13:42)

“There are always innovators showing up from outside the establishment, and every time one succeeds, advisors end up with more options and more leverage and more negotiating power than they had the year before.”
— Louis Diamond (22:44)

FAQs

Why is Vanguard acquiring Altruist?

Louis sees several strategic reasons for the acquisition. Altruist gives Vanguard an established technology and custody platform serving more than 6,000 advisors, while potentially expanding Vanguard’s ability to reach investors through independent financial advisors. It may also provide another distribution channel for Vanguard investment products and future offerings.

What does Vanguard’s acquisition mean for Altruist?

Altruist gains the backing of one of the world’s largest and best-known investment firms while retaining, at least initially, its brand, leadership, and operating structure. Vanguard’s capital could allow Altruist to continue investing in custody capabilities, technology, and products such as Hazel AI without relying on additional venture funding rounds.

How could the acquisition affect RIA custody competition?

Schwab and Fidelity currently dominate RIA custody. Louis believes a Vanguard-backed Altruist could become a stronger challenger by combining Altruist’s technology and pricing model with Vanguard’s scale, capital, and reputation. That could increase competitive pressure around pricing, service, technology, and innovation.

Why could the deal matter to breakaway advisors?

Altruist’s technology has attracted advisor interest, but some larger breakaway teams have questioned whether clients would be comfortable holding substantial wealth with a less familiar custodian. Vanguard’s ownership could substantially reduce that brand-recognition hurdle and make Altruist a more viable option for larger teams.

Could Vanguard refer clients to advisors using Altruist?

No referral program has been announced. However, Louis believes it is an important possibility to watch. Vanguard has more than 50 million investors, while Altruist provides access to thousands of independent advisors. Connecting investors seeking human advice with RIAs on the Altruist platform could create a meaningful new referral channel.

Are there risks for advisors using a Vanguard-owned custodian?

Potentially. Vanguard operates its own financial advice businesses, creating some of the same competitive concerns advisors have raised about other custodians with retail advice operations. Other questions include whether Altruist will remain operationally independent over time and whether its culture and pace of innovation can be maintained under Vanguard ownership.

What happens next for Altruist, Schwab, and Fidelity?

Louis expects the competitive response to be worth watching. He believes Schwab and Fidelity could respond through technology, AI, pricing, or other changes to their advisor offerings. He also expects Altruist to compete more aggressively for breakaway teams and sees the potential for Hazel AI to expand well beyond advisors who custody assets with Altruist.

Does the Vanguard-Altruist deal change anything for advisors immediately?

Not necessarily. The transaction still needs to close, and its longer-term impact will take time to emerge. But for advisors evaluating custodians, independence, or the value they receive from existing partners, the acquisition adds another factor to consider as the competitive landscape evolves.

Louis sees several strategic reasons for the acquisition. Altruist gives Vanguard an established technology and custody platform serving more than 6,000 advisors, while potentially expanding Vanguard’s ability to reach investors through independent financial advisors. It may also provide another distribution channel for Vanguard investment products and future offerings.

Altruist gains the backing of one of the world’s largest and best-known investment firms while retaining, at least initially, its brand, leadership, and operating structure. Vanguard’s capital could allow Altruist to continue investing in custody capabilities, technology, and products such as Hazel AI without relying on additional venture funding rounds.

Schwab and Fidelity currently dominate RIA custody. Louis believes a Vanguard-backed Altruist could become a stronger challenger by combining Altruist’s technology and pricing model with Vanguard’s scale, capital, and reputation. That could increase competitive pressure around pricing, service, technology, and innovation.

Altruist’s technology has attracted advisor interest, but some larger breakaway teams have questioned whether clients would be comfortable holding substantial wealth with a less familiar custodian. Vanguard’s ownership could substantially reduce that brand-recognition hurdle and make Altruist a more viable option for larger teams.

No referral program has been announced. However, Louis believes it is an important possibility to watch. Vanguard has more than 50 million investors, while Altruist provides access to thousands of independent advisors. Connecting investors seeking human advice with RIAs on the Altruist platform could create a meaningful new referral channel.

Potentially. Vanguard operates its own financial advice businesses, creating some of the same competitive concerns advisors have raised about other custodians with retail advice operations. Other questions include whether Altruist will remain operationally independent over time and whether its culture and pace of innovation can be maintained under Vanguard ownership.

Louis expects the competitive response to be worth watching. He believes Schwab and Fidelity could respond through technology, AI, pricing, or other changes to their advisor offerings. He also expects Altruist to compete more aggressively for breakaway teams and sees the potential for Hazel AI to expand well beyond advisors who custody assets with Altruist.

Not necessarily. The transaction still needs to close, and its longer-term impact will take time to emerge. But for advisors evaluating custodians, independence, or the value they receive from existing partners, the acquisition adds another factor to consider as the competitive landscape evolves.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Related Resources

Rise and Reinvent: Joe Duran on Building and Rebuilding World-Class Firms

From Insurance Sales to $8B RIA: A Northwestern Mutual Breakaway Story

Diamond Consultants 4th Annual Advisor Transition Report

View the transcript of this episode…

Vanguard Acquires Altruist: What It Means for RIAs, Custody & Breakaway Advisors

With Louis Diamond

Louis Diamond (00:06):

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is a special rapid reaction industry update, Vanguard acquires Altruist, what it means for advisors in the industry. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond (00:28):

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

(01:21):

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond (02:05):

Funny how the biggest news in the business almost never comes from the firms everyone is watching. On Wednesday, August 26th, 2026, Vanguard announced its acquiring Altruist. If you asked me a year ago to name the company most likely to buy an RIA custodian, Vanguard would not have been near the top of my list. Vanguard was in the RIA custody business once. They left in 2003 and handed roughly $120 billion of advisor assets to TD Ameritrade on the way out. 23 years later, they’re buying their way back in, reported $4 billion or more. So let’s talk about what happened, why it matters, and where I think it goes from here.

(02:48):

What happened? On August 26th, 2026, a definitive agreement was announced out of Valley Forge, Pennsylvania. A deal is closing later this year where Vanguard is acquiring Altruist, the relative upstart RIA custodian. The price, an undisclosed number, but a reported $4 billion, some outlets reporting $4.6 billion or more. Either way, more than double their last private market valuation at the end of April 2025. Another element is Altruist is staying as a standalone. They’ll keep their brand, CEO, management team, and operate the same model just as a wholly owned subsidiary of Vanguard. Altruist in one breath, for those unaware, was a custodian and fintech company founded in 2018 by Jason Wenk. They became a self-clearing custodian, third largest as far as number of advisors served, north of 6,000 advisors, and had a reputation for serving smaller or upstart advisors, but recently started getting into more of the larger market breakaway space.

(03:53):

One estimate I’ve seen peg’s Altruist market share of RIA custody at around 6%, but you compare that to about three quarters of the market for Schwab and Fidelity combined. So a relatively small player, but a rapidly emerging player and threat in US RIA custody. This is not the first time Vanguard has been involved with Altruist. They reportedly were an early investor in Altruist back in 2020 and former Vanguard CEO, Bill McNabb, has been on the board of Altruist, so a lot of history between the firms. Let’s get into now why I think this is interesting for the industry as a whole. In my view, custody has never really been all that competitive, especially since TD Ameritrade sold to Schwab. You really had an oligopoly between Schwab and Fidelity. Sure, there’s a number of compelling, say more boutique custodians, whether Pershing Advisor Solutions, Goldman Sachs, which was another newer entrant to custody, LPL, Raymond James, First Clearing, and a number of others are also in the space, but it is a market that is dramatically dominated by the two largest players.

(05:01):

So I think this matters because you add an amazing venerable brand and reputation of Vanguard with this scrappy upstart custodian, and all of a sudden you can see a world where custody is one of the more competitive spaces in the industry. Altruist, in my view too, was one of the first credible challengers to the incumbent custodians in 20-ish years. Goldman has since picked up some decent market share and certainly they’re attractive for the segment of advisors. But Altruist with their tech-forward approach, low fees, and even just the way they went to market as an antagonist to Schwab and Fidelity, they’re a big deal and I think this just magnifies what they’re able to do. The gap though for Altruist was brand and reputation. Sure, they had amazing tech. No one ever has doubted that. Hazel AI, which they recently launched has been very well received.

(05:55):

Advisors I’ve worked with who have demoed the platform are incredibly impressed. The big Achilles heel though for Altruist has been my clients don’t know who Altruist is. Why would my clients put their millions of dollars of wealth with a self-clearing custodian that doesn’t have the same scale or reputation as the incumbent custodians? Well, that really goes away here. And at the end of the day, custody is really a trust business, but you’d have to think that a client would trust their assets held with Vanguard or with Altruist through Vanguard in a very similar way that they would trust assets held by Bank of New York Mellon or Charles Schwab or Fidelity Investments or Goldman Sachs. So to me, Vanguard acquiring Altruist solves that problem in one sentence, very simple. Why I think this makes sense for Vanguard? Salim Ramji, the CEO of Vanguard, has been saying since he arrived from BlackRock two years ago that only one in five Americans work with a fee-based financial advisor and that quality advice shouldn’t be a luxury good and this shortage is only going to get worse as advisors retire.

(07:00):

This is really him putting his money where his mouth is and really trying to make financial advice, human directed financial advice more accessible to everyday Americans and the upper echelons of wealth in this country. Vanguard as a company has over 50 million reported investors and over 12 trillion in assets. A lot of these people want Vanguard advice, but Vanguard hasn’t had the manpower or the capacity to deliver it itself. Buying Altruist over time can certainly solve that capacity gap and make it so that a human-based financial advisor or any of Vanguard’s internal platforms now have a greater ability to provide advice to Americans looking for financial advisors in the United States. I think this also means more distribution capability for Vanguard funds. Not that Vanguard has ever had a problem with distribution. They have a relatively small wholesaling force compared to other firms, but given their cost and reputation and performance, they’re really on pretty much every platform.

(08:04):

Most advisors have some clients that are invested into Vanguard mutual funds or ETFs, but this I think just gives them a greater ability to distribute Vanguard products, probably in a similar way to Goldman’s approach. When Goldman entered US RIA custody, in large part, they were doing it for distribution of different things. For Goldman, it was private markets and lending and other types of products. Vanguard is more ETFs and mutual funds, but Vanguard has also been pushing more into the private market space, so I can definitely see a world in which they can ratchet up the distribution of their products in a fairly cost-efficient way. I think to me, the most interesting thing about this marriage is the mission overlap is quite real. When Vanguard started, and to this day, their goal was to provide quality investment products at a fraction of the cost of the incumbents so that investing can be accessible to everyday Americans.

(08:59):

That’s exactly the verbiage that Jason Wenk and Altruist has used from the beginning, where they want to become a all-in-one hub or tech-enabled custodian so that an advisor, regardless of their size and a client regardless of their AUM, have the ability to get quality advice. I recently listened to a podcast called Acquired. We’ll link it in the show notes, but it’s a three-hour in-depth look into the building of Vanguard. And if you combine that with the podcast episode that I recorded with Jason Wenk, the CEO of Altruist, if you play them side by side, the parallels are eerily similar. So we’ll link both into the show notes, but I really think both of these firms were cut from the same cloth and really from the beginning, both have gone against the grain and tried to rattle incumbent players in the industry. So at least on paper, seems like a very good match.

(09:51):

Why does this deal make sense for Altruist? For one, for Jason Wenk and his leadership team, this has to be the outcome you drew up, maybe even better. Founding a new custodian in 2018, selling it in 2026, eight years later for over $4 billion, that’s a pretty incredible return on time for this team. They deserve it all and built something special and really entered into a space where no one wanted to venture just given the market share of the major incumbents, but good for them and has to feel good to pull off this type of sale. I think the big thing too is the buyer is the story. Vanguard as a company, it’s investor owned. They’re not private equity owned. They’re not VC backed like Altruist was. So Altruist can get off of the fundraising treadmill. They don’t have to worry about fund life or a five-year hold period or an eventual sale to a strategic.

(10:42):

Now they can really just focus on the business at hand, having one of the most well-capitalized companies in the world as their capital backer and owner. And every advisor on a PE-backed platform knows the question hanging over every relationship, who owns this next? That’s a question they won’t have to answer anymore at all, and they can really just focus now going forward. I think this also gives Altruist a fortress balance sheet and a ton of capital to keep pushing and developing their Hazel AI platform, which was launched in September 2025. Hazel’s an AI tax planning tool, kind of AI superpower that really has taken the industry by storm and has started to be sold as a standalone product to RIAs. And from what I’ve seen, they’ve sold it to over 1600 new RIAs just in the first month alone for $60 a seat per month, and that’s available to folks if they custody at Altruist or not.

(11:36):

So this, I think, just gives them an ability to distribute their fintech solutions and certainly develop their custody platform in a way that maybe was challenging or not as possible before. They can also take a longer term view instead of having to worry about they raised a series F, whatever comes after F and an eventual sale, investors wanting to get a return on capital, they can now focus on building over the long term, which has been Vanguard’s strategy all along. I think too, this will give Altruist the ability to invest in new capabilities that they didn’t have before, whether it’s lending or whether it’s more on the product side. It takes a lot to be a custodian. It seems like a relatively straightforward business just holding assets, but there’s a lot of products, solutions, really requirements that everyday investors and RIA clients have, and I think this will just ratchet up Altruist’s ability to close some of the capability gaps that they’ve had since they launched and they’re very transparent about those.

(12:33):

What I’m most excited about this, just coming from my vantage point in the industry, is why should an advisor care? To me, there’s five things that advisors should really take notice of with this acquisition. First one’s competition. Every time a well-capitalized player shows up, especially in custody, advisors win. Schwab and Fidelity have fought Vanguard in the asset management space for decades, and more recently in financial advice. Now you’re adding custody against a firm that doesn’t need to be profitable the next quarter, and all of a sudden we very much have an arms race and some competition is good for pricing, for service, for innovation, and I think this is going to be only positives for clients across the country, having another competitive option and keeping the incumbents really on their toes. Another reason, the breakaway shortlist has changed. Objection I always heard about Altruist was, “The tech is great, the AI seems cool, but how do I explain the name Altruist to a 68-year-old client who’s leaving Merrill or UBS or Morgan Stanley?”

(13:42):

While someone may still get some objections because Vanguard may not have the same brand cache as Goldman Sachs or UBS Private Wealth or Merrill Private Wealth, that objection got a lot weaker today. Really, it’s tech-forward independence now without a brand trade-off. It’s a genuinely different offer in the market than it was before. Third, I think this is one that hasn’t been talked about much, but should be watched closely, potential for referrals. Schwab confirmed last week that it was taking the SAN or the Schwab Advisor Network client referral minimum from two million to five million. For anyone not aware, referrals from the retail branches of Schwab and Fidelity are one of the major organic growth funnels for many of the top RIAs in this country and have driven valuations to billions and billions of dollars for firms that are in this program.

(14:36):

I really do see this as being a potential new massive referral opportunity of Vanguard existing clients and customers to Altruist custody to RIAs at a time when Schwab is trying to keep more of those referrals from themselves, which is a very savvy strategy, but at the same time, probably creates a bit of an opening for Altruist and Vanguard to become a really good referral hub for clients, which is a major draw for signing up new RIAs as clients, for breakaway advisors, et cetera.

(15:07):

So more details need to come there. We don’t even know if they’re starting a referral channel, but I have to imagine that’s high in the punch list and will be a very compelling offering in the marketplace. Yeah, think about it. Vanguard is 50 million investors and a CEO who said multiple times that they don’t have enough advisors or humans to deliver this advice. So perfect. You now have a massive array of RIAs and more and more coming to the table who offer that advice and being able to still serve them, still keep the assets in-house, but do it in a way where Vanguard doesn’t have to scale up their advisor force. They now have advisors to refer to. Fourth is pricing. I think the Vanguard effect is going to be real here. When Vanguard started, and even to this day, they’ve been the one who’ve pushed down the expense ratio on mutual funds and ETFs.

(15:56):

It’s been a massive benefit to investors across this country. It’s been Altruist’s playbook all along too, more focused on the advisor, so offering amazing tech and a custody platform for virtually no cost to an advisor. So I would say whatever you’re paying for technology, for custody, and really anything else that Altruist and Vanguard might touch, I would expect it to go down potentially and just have more pressures on the incumbent firms to really sharpen their pencil or to get more creative on pricing and innovation. I think that the fifth thing to keep in mind is Schwab has long used its scale and positioning in the market to best competitors, whether it was going to $0 on tickets for equities and ETFs, et cetera, a number of years ago or a number of other strategies they’ve taken. Now you have a firm that has similar scale as Schwab, a reputation for playing the long game and being comfortable making less money in the process.

(16:54):

So again, massive benefit to the advisors to have another major player driving down costs and increasing innovation in the space. But this is not all positives. As with anything, there’s the good and the bad, and also some open questions. The biggest, I think, downside or potential thing to watch here, and certainly if you are a BDO at a custodian, this is the line you’re using, “Vanguard has its own advice business, personal advisor, digital advisor, and a CEO who stated that his goal is that an advisor is in every investor’s pocket.” So now you have the custodian that’s holding your client’s assets also running one of the largest advice operations in the country. We’ve heard this concern in the past about Schwab or Fidelity where you have RA custody and then these firms have massive retail distribution networks. So certainly Vanguard, I think, will be in the same lane.

(17:46):

And if you look at a Pershing or an LPL or Raymond James, it’s a little bit different because they don’t have their own channels in the same way that Schwab or Fidelity do. So certainly if you’re BNY Mellon in particular, which is a straight B2B custodian, this is a clear point of differentiation for Vanguard, Altruist and certainly versus the other custodians. Next one is Vanguard has said that Altruist will remain a standalone business. The brand will stay intact, the management team, et cetera. But in fairness, every acquirer says versions of the same thing. The real test is let’s wait two years, three years and see how converging roles or similar roles across the firm start to converge into one, and over time will they more Altruist brand and human capital into one structure.

(18:36):

Right now we don’t know, but I’m always a bit skeptical with acquisitions that you have the honeymoon period, takes time for the deals to close, and then what happens a couple of years down the line? Either as there’s new executives in charge, there’s turnover, or just there’s certain synergies that can be had, and the best way to do it is by combining operations and the like.

(18:56):

The next risk, I think it might sound a little bit mundane, but it’s culture and speed. Vanguard based in Valley Forge, Pennsylvania, Altruist in LA, very different cultures. Altruist as a fintech company has been superfast to market, building, breaking things, innovating. And Vanguard, I think they’ve been extremely innovative on pricing, on product development, but I’ve never heard amazing reviews about Vanguard’s technology. So does this convergence of cultures create an issue? Does it create more bureaucracy for Altruist trying to build stuff? Is there a cultural mismatch when it comes to speed of market and innovation? And I think the last thing to keep in mind or to watch is the talent drainage at Altruist post-closing. Yes, I was a FinTech company and custodian offering equity, lots of upside for people that have taken this journey with them. Vanguard notoriously is the opposite. They don’t offer equity to anyone and they offer their employees high base salaries and you have a culture of longevity within the firm.

(20:00):

So after the lockup period is done for, or the earn out period is done for any Altruist equity owners and many of their employees, does that cause some talent drainage where folks want to go onto the next big thing, think what will happen to all the amazing SpaceX employees a year from now when their IPO lockups are done? Does that lead them to another opportunity? All these are questions I don’t know, but trying to play devil’s advocate. I think the biggest potential negative is just the Vanguard advice business as a competitor, a conflict to RIA custody. Let me give you a couple of predictions before we wrap here. I think Schwab and Fidelity will respond fast, whether it’s on the AI front or because the pressure is really on. I don’t know, maybe the $5 million referral minimum that Schwab just announced, maybe that sunsets after a period of time. I have no idea.

(20:53):

I’m also excited to see, we’ll call it the tech face off between Altruist and Robinhood. Robinhood acquired TradePMR, which is on the Wells Fargo First Clearing platform and is in the process of launching an RIA custodian themselves. So now you have, I think, two pretty incredible tech-forward custodians really trying to gain market share, so that will be fun to watch. Could there be a threat in the RIA platform space? So RIA platforms meaning RIAs, we call them supportive versions of independence, where advisors can plug into, they get technology, compliance, operations, et cetera, and still own their business. Given the end-to-end tech stack that Altruist boasts, and they’ve also been in development of their own corporate RIA, does that become that much more of a competitive feature that could possibly become a solution in and of itself that takes a dent out of these RIA platforms playbook?

(21:45):

I don’t know, but I think it’s possible. Altruist Hazel AI, does that push even well beyond custody? There’s a ton of AI and fintechs popping up around the industry. Hazel has certainly taken a lot of headlines and attention. With Vanguard behind it now, does that push the price lower? Does it help their distribution? Maybe you picture this, if you have a Vanguard-owned product sitting in the daily workflow of a competitor’s advisors, so let’s say you’re a Morgan Stanley, you’re a Schwab advisor, et cetera, do you now have a Vanguard-owned product in Hazel as part of your workflow or your fintech stack? Could be interesting. I will call a referral channel for Vanguard or Altruist, we’ll say within the next year or two. I think it would be crazy if that didn’t happen and that will be a massive disruptor. And finally, my prediction is more breakaways landing in Altruist. They’ve started to crack that door, but now with the powerful brand and reputation behind them, the sky’s probably the limit.

(22:44):

So in closing, a guy, Jason Wenk, started a company in 2018 in Los Angeles because he thought independent advisors deserve better software at a lower price. Eight years later, one of the most respected financial institutions in the world paid $4 billion for it, and the reason is he was right in that bet. There are always innovators showing up from outside the establishment, and every time one succeeds, advisors end up with more options and more leverage and more negotiating power than they had the year before. It’s a consistent theme across the industry. So nothing changes tomorrow, deals take time, deals have a way of falling apart, but if you’re evaluating custodians, thinking about independence for the first time, wondering whether your current partner is going to keep earning your business, today is a good day to reopen that question. And if you’re an advisor, I think cheer this on and be excited.

(23:42):

And as a industry participant, I am very excited to see how this deal takes hold and how this pushes the rest of the industry to innovate and continue to be better. So that’s it for today. Thank you for hearing my ramblings, and I’ll see you next time.

Mindy Diamond (24:02):

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients, but are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay Or Should I Go? Is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Vanguard Acquires Altruist: What It Means for RIAs, Custody & Breakaway Advisors

With Louis Diamond

Louis Diamond (00:06):

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is a special rapid reaction industry update, Vanguard acquires Altruist, what it means for advisors in the industry. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond (00:28):

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

(01:21):

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond (02:05):

Funny how the biggest news in the business almost never comes from the firms everyone is watching. On Wednesday, August 26th, 2026, Vanguard announced its acquiring Altruist. If you asked me a year ago to name the company most likely to buy an RIA custodian, Vanguard would not have been near the top of my list. Vanguard was in the RIA custody business once. They left in 2003 and handed roughly $120 billion of advisor assets to TD Ameritrade on the way out. 23 years later, they’re buying their way back in, reported $4 billion or more. So let’s talk about what happened, why it matters, and where I think it goes from here.

(02:48):

What happened? On August 26th, 2026, a definitive agreement was announced out of Valley Forge, Pennsylvania. A deal is closing later this year where Vanguard is acquiring Altruist, the relative upstart RIA custodian. The price, an undisclosed number, but a reported $4 billion, some outlets reporting $4.6 billion or more. Either way, more than double their last private market valuation at the end of April 2025. Another element is Altruist is staying as a standalone. They’ll keep their brand, CEO, management team, and operate the same model just as a wholly owned subsidiary of Vanguard. Altruist in one breath, for those unaware, was a custodian and fintech company founded in 2018 by Jason Wenk. They became a self-clearing custodian, third largest as far as number of advisors served, north of 6,000 advisors, and had a reputation for serving smaller or upstart advisors, but recently started getting into more of the larger market breakaway space.

(03:53):

One estimate I’ve seen peg’s Altruist market share of RIA custody at around 6%, but you compare that to about three quarters of the market for Schwab and Fidelity combined. So a relatively small player, but a rapidly emerging player and threat in US RIA custody. This is not the first time Vanguard has been involved with Altruist. They reportedly were an early investor in Altruist back in 2020 and former Vanguard CEO, Bill McNabb, has been on the board of Altruist, so a lot of history between the firms. Let’s get into now why I think this is interesting for the industry as a whole. In my view, custody has never really been all that competitive, especially since TD Ameritrade sold to Schwab. You really had an oligopoly between Schwab and Fidelity. Sure, there’s a number of compelling, say more boutique custodians, whether Pershing Advisor Solutions, Goldman Sachs, which was another newer entrant to custody, LPL, Raymond James, First Clearing, and a number of others are also in the space, but it is a market that is dramatically dominated by the two largest players.

(05:01):

So I think this matters because you add an amazing venerable brand and reputation of Vanguard with this scrappy upstart custodian, and all of a sudden you can see a world where custody is one of the more competitive spaces in the industry. Altruist, in my view too, was one of the first credible challengers to the incumbent custodians in 20-ish years. Goldman has since picked up some decent market share and certainly they’re attractive for the segment of advisors. But Altruist with their tech-forward approach, low fees, and even just the way they went to market as an antagonist to Schwab and Fidelity, they’re a big deal and I think this just magnifies what they’re able to do. The gap though for Altruist was brand and reputation. Sure, they had amazing tech. No one ever has doubted that. Hazel AI, which they recently launched has been very well received.

(05:55):

Advisors I’ve worked with who have demoed the platform are incredibly impressed. The big Achilles heel though for Altruist has been my clients don’t know who Altruist is. Why would my clients put their millions of dollars of wealth with a self-clearing custodian that doesn’t have the same scale or reputation as the incumbent custodians? Well, that really goes away here. And at the end of the day, custody is really a trust business, but you’d have to think that a client would trust their assets held with Vanguard or with Altruist through Vanguard in a very similar way that they would trust assets held by Bank of New York Mellon or Charles Schwab or Fidelity Investments or Goldman Sachs. So to me, Vanguard acquiring Altruist solves that problem in one sentence, very simple. Why I think this makes sense for Vanguard? Salim Ramji, the CEO of Vanguard, has been saying since he arrived from BlackRock two years ago that only one in five Americans work with a fee-based financial advisor and that quality advice shouldn’t be a luxury good and this shortage is only going to get worse as advisors retire.

(07:00):

This is really him putting his money where his mouth is and really trying to make financial advice, human directed financial advice more accessible to everyday Americans and the upper echelons of wealth in this country. Vanguard as a company has over 50 million reported investors and over 12 trillion in assets. A lot of these people want Vanguard advice, but Vanguard hasn’t had the manpower or the capacity to deliver it itself. Buying Altruist over time can certainly solve that capacity gap and make it so that a human-based financial advisor or any of Vanguard’s internal platforms now have a greater ability to provide advice to Americans looking for financial advisors in the United States. I think this also means more distribution capability for Vanguard funds. Not that Vanguard has ever had a problem with distribution. They have a relatively small wholesaling force compared to other firms, but given their cost and reputation and performance, they’re really on pretty much every platform.

(08:04):

Most advisors have some clients that are invested into Vanguard mutual funds or ETFs, but this I think just gives them a greater ability to distribute Vanguard products, probably in a similar way to Goldman’s approach. When Goldman entered US RIA custody, in large part, they were doing it for distribution of different things. For Goldman, it was private markets and lending and other types of products. Vanguard is more ETFs and mutual funds, but Vanguard has also been pushing more into the private market space, so I can definitely see a world in which they can ratchet up the distribution of their products in a fairly cost-efficient way. I think to me, the most interesting thing about this marriage is the mission overlap is quite real. When Vanguard started, and to this day, their goal was to provide quality investment products at a fraction of the cost of the incumbents so that investing can be accessible to everyday Americans.

(08:59):

That’s exactly the verbiage that Jason Wenk and Altruist has used from the beginning, where they want to become a all-in-one hub or tech-enabled custodian so that an advisor, regardless of their size and a client regardless of their AUM, have the ability to get quality advice. I recently listened to a podcast called Acquired. We’ll link it in the show notes, but it’s a three-hour in-depth look into the building of Vanguard. And if you combine that with the podcast episode that I recorded with Jason Wenk, the CEO of Altruist, if you play them side by side, the parallels are eerily similar. So we’ll link both into the show notes, but I really think both of these firms were cut from the same cloth and really from the beginning, both have gone against the grain and tried to rattle incumbent players in the industry. So at least on paper, seems like a very good match.

(

Shannon Spotswood – CEO, RFG Advisory

Choosing a platform isn’t just about technology or economics. It’s about finding a partner that helps you build the business you actually want to own. Shannon Spotswood explains why growth without compromise starts with choosing the right partner.

In Summary

What should advisors really look for in a platform partner?

Jason Diamond sits down with Shannon Spotswood, CEO of RFG Advisory, to discuss why the best platforms do more than provide technology and operational support—they help advisors build stronger businesses. Shannon shares lessons from helping grow RFG into one of the industry’s leading supportive independence firms, covering everything from private equity partnerships and advisor experience to enterprise value, branding, and overcoming the fear that keeps many advisors from pursuing the business they truly want.

The Storyline

Most advisors evaluating independence compare technology, payouts, and service offerings.

Shannon Spotswood believes they’re asking the wrong first question.

After spending two decades in institutional investing and later helping to rebuild RFG Advisory from the ground up, Shannon has developed a philosophy centered on partnership. She argues that the best platforms function less like vendors and more like long-term business partners, helping advisors spend more time with clients, build enterprise value, and create businesses aligned with their vision rather than forcing compromises.

Jason and Shannon discuss what meaningful support actually looks like, why the right private equity partner can accelerate growth rather than restrict it, and why advisors should demand evidence – not marketing promises – when evaluating a platform.

The conversation also explores one of the industry’s biggest obstacles to change: fear. Shannon explains why outdated assumptions about transitioning firms continue to prevent advisors from building businesses they enjoy, even though data suggests the experience is often far less disruptive than many believe.

Ultimately, the discussion reframes independence itself—not as the destination, but as the beginning of choosing the right long-term partners.

Topics Covered

• Evaluating advisor platforms as long-term business partners
• Building an independent business without compromise
• Enterprise value and organic growth
• Private equity as a strategic growth partner
• Advisor experience and client experience
• Branding and authenticity in wealth management
• Overcoming fear and transition myths
• Technology, outsourcing, and operational leverage
• Leadership, succession, and organizational growth
• The future of supportive independence

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Why should advisors think of a platform as a business partner? (10:00)

Shannon explains why technology and service alone aren’t enough—and why the right partner should help advisors build the business they ultimately want to own.

What does “growth without compromise” actually mean? (10:00–17:30)

RFG’s philosophy centers on helping advisors focus on their highest-value work while surrounding them with integrated support designed to drive enterprise value.

Can private equity make a firm better? (25:00)

Rather than debating whether private equity is good or bad, Shannon explains why success depends on choosing a partner whose values and long-term vision align with yours.

How should advisors evaluate competing platforms? (43:00)

Her advice is simple: don’t rely on marketing. Speak with advisors already using the platform and ask firms to demonstrate – not simply promise – how they solve problems.

Why does fear keep so many advisors from making a change? (48:30)

Shannon discusses the “PTSD” many advisors carry from outdated transition stories and why today’s reality often looks very different.

What does the future of advisor platforms look like? (34:00–42:00)

The conversation explores advisor demand for greater personalization, stronger brands, AI-enabled efficiency, and partners that help advisors grow without sacrificing independence.

Key Takeaways

• The best advisor platforms function as long-term strategic partners—not simply service providers.
• Enterprise value grows when advisors spend more time serving clients and less time managing operations.
• Private equity can be highly beneficial when partners share a common vision and respect management autonomy.
• Advisors should evaluate firms based on demonstrated execution rather than marketing claims.
• Fear remains one of the biggest barriers to advisor movement despite significant improvements in transition support.
• Authentic branding and deeper client relationships will become increasingly important as AI reshapes wealth management.

https://youtu.be/jaSt3-mO0so

Quotable Moments

“The right partners make you better. The wrong ones can quietly hold you back.”

“Don’t tell me. Show me.”

“Everything you want is on the other side of fear.”

“Your team deserves to be happy. You deserve to be happy.”

FAQs

What should advisors look for when evaluating an advisor platform?

Shannon believes advisors should look beyond technology and economics and evaluate whether a platform acts like a true long-term business partner that helps them grow and build enterprise value.

How does RFG define “growth without compromise”?

By providing integrated support – from technology and compliance to marketing and coaching – that allows advisors to spend more time with clients while maintaining control of their businesses.

Is private equity always good or bad for advisor firms?

No. Shannon argues that success depends less on private equity itself and more on choosing partners who share the firm’s long-term vision and values.

Why do advisors hesitate to make a move?

Fear and outdated perceptions about transitions still influence decision-making, even though today’s transition experience is often much smoother than advisors expect.

How should advisors compare competing platforms?

Talk directly with affiliated advisors, ask for measurable evidence of results, and focus on how a platform responds to advisor feedback rather than marketing claims.

How is AI changing advisor businesses?

AI should enhance – not replace – the advisor relationship by creating operational efficiencies that allow advisors to spend more time delivering personalized advice.

Shannon believes advisors should look beyond technology and economics and evaluate whether a platform acts like a true long-term business partner that helps them grow and build enterprise value.

By providing integrated support – from technology and compliance to marketing and coaching – that allows advisors to spend more time with clients while maintaining control of their businesses.

No. Shannon argues that success depends less on private equity itself and more on choosing partners who share the firm’s long-term vision and values.

Fear and outdated perceptions about transitions still influence decision-making, even though today’s transition experience is often much smoother than advisors expect.

Talk directly with affiliated advisors, ask for measurable evidence of results, and focus on how a platform responds to advisor feedback rather than marketing claims.

AI should enhance – not replace – the advisor relationship by creating operational efficiencies that allow advisors to spend more time delivering personalized advice.

Related Resources

How to Evaluate a Firm Beyond the Obvious: A Framework for Advisors

Why You Should Stay at Your Current Firm

Shannon Spotswood
CEO

Shannon Spotswood is a 25+ year industry veteran with a tremendous amount of experience across both retail and institutional finance and an outstanding reputation built on her passionate leadership and ongoing success in investment banking, hedge fund portfolio management, business development and retail wealth management. Joining RFG in 2015, Shannon recognized the opportunity to channel her entrepreneurial experience and passion for service into leading a mission to create an Advisor-focused RIA of the Future delivering a supported independence platform that empowers Financial Advisors to build the businesses they want to have, without compromise.

Shannon’s career has been characterized by her determination to build something bigger than herself. Having fallen in love with finance at only age 14, she was focused on making an impact in a male-dominated industry. After graduating from college, Shannon spent 20 years in San Francisco working in institutional finance. She began her career in investment banking and eventually achieved her dream job as a Portfolio Manager of a long- short equity fund at Symphony Asset Management. The company was acquired by Nuveen in 2001.

After a decade at that firm and now a mother of 3 young children, Shannon turned her entrepreneurial passion in a new direction with a drastic pivot to start a luxury children’s clothing brand, Busy Bees. Taking her years of experience in qualitative analysis of retail companies, Shannon and her business partner built the brand from the ground up, ushering its’ growth from a garage to “Gwyneth Paltrow’s Goop” over the course of a few years.

Shannon and her family made the decision to move from the Bay Area to Birmingham, Alabama to be closer to family. And shortly after, the call to return to her first love, finance, grew to great to ignore.

In 2015, Shannon joined RFG Advisory as President, leading RFG as the firm has grown from $1.8B to over $5B. In July of 2024, Shannon was named CEO of RFG Advisory and currently serves in that role.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Growth Without Compromise: Building Around the Advisor Experience

A conversation with Jason Diamond and Shannon Spotswood, CEO of RFG Advisory.

Jason Diamond:

Welcome to the latest episode of our podcast series for Financial Advisors. Today’s episode is Growth Without Compromise: Building Around the Advisor Experience. It’s a conversation with Shannon Spotswood, the CEO of RFG Advisory. I’m Jason Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

The right partners make you better. The wrong ones can quietly hold you back. Most conversations about independence focus on platforms as providers of technology, service, or infrastructure. Shannon Spotswood sees them differently. She believes advisors should evaluate a platform the same way they’d evaluate any long-term business partner, by asking whether it will help them build the kind of firm they ultimately want to own. That’s exactly what we explore in this episode. Shannon is the CEO of RFG Advisory, a firm that has grown from a startup into one of the industry’s leading supportive independence platforms. Along the way, she’s developed a unique perspective on what advisors should be looking for beyond economics and technology, and why the right partner can accelerate growth, strengthen culture, and help create a business that’s built to last. It’s a conversation that goes well beyond advisor platforms. We explore why Shannon believes so strongly in growth without compromise, what private equity can look like when the partnership is aligned, why firms shouldn’t try to be everything to everyone, and how advisors can separate marketing promises from meaningful support.

We also spend time on a topic that comes up in nearly every transition conversation my team has with advisors, fear. Shannon shares her perspective on why outdated assumptions about making a move continue to hold advisors back and why asking better questions and demanding evidence instead of promises can fundamentally change the way advisors evaluate every opportunity in front of them. Whether you’re considering independence, evaluating your current platform, or simply thinking about what comes next for your business, I think you’ll find Shannon’s perspective both practical and though-provoking, especially the sage advice in her words, “Don’t tell me, show me.” There’s a lot to take away from this conversation, so let’s get to it. Shannon, thanks so much for joining me. Thrilled to have you here.

Shannon Spotswood:

It’s excellent to be here. I’m really looking forward to it.

Jason Diamond:

Me too. Let’s dive right in. I want to start with your background. You spent 20 years in San Fran as an investment banker, then as a portfolio manager at Symphony Asset Management before even touching the world of wealth management. So what made you walk away from, we’ll call it the institutional world and enter the world of wealth management?

Shannon Spotswood:

It’s a little bit of a circuitous story, but I’m going to take us on the short route. I fell in love with Wall Street as a teenager, so I knew I wanted to work on Wall Street. My dream job was actually the time that I spent at Symphony Asset Management. I was a hedge fund manager for them for six years running a long/short equity fund. I then had three children in three and a half years. The firm was acquired by Nuveen Investments, and we grew very large, and I was on this really interesting trajectory within the institutional investment management world. And somewhat of the unexpected happened to me in 2010, we’d come through the financial crisis. I looked around the room, I had these three young children, and having loved finance since a very early age, I couldn’t crawl on an airplane anymore.

I fell out of love with what was honestly my first love. And I made a pretty radical pivot. I left Symphony, the tallest building at the time in San Francisco, and I partnered with a woman, and we built a luxury children’s clothing company for the next three years. So about as radical of a move as you can make, a $30 billion firm, big team, a tremendous growth ahead of us to upside down boxes of infant cashmere in a garage that flooded when it rained. So I had my startup in a garage moment. And while I was running the children’s clothing company, my husband and I took a big leap of faith and decided to move from San Francisco to Birmingham, Alabama to get closer to family, to raise our kids in the South, and just manifest the life that we wanted.

In the third year of running the kids’ clothing business, we checked every box of our initial business plan, and I turned to my business partner and I was like, “Now what? Should we raise capital? Should we open stores? Should we diversify manufacturing?” And we realized this beautiful little luxury brand that we had created was exactly what it needed to be. And so we restructured the company and I punched out of that. And I spent, really for the first time in my life, about five months in deep contemplation. What was the first hedge fund that I was a part of in San Francisco, my tour of duty through investment banking as an analyst associate and helping them start an M&A group. This incredible decade that I’d spent at Symphony, and then this wild out of left field moment of building a luxury children’s clothing brand. And it had such an epiphany, Jason. And it was this, that I was on the ground floor of all of those businesses. And my aha moment was, oh my gosh, I’m a builder.

What I love more than anything is sitting at the intersection of talent and opportunity and what I think is truly one of life’s greatest gifts, and certainly I think the most fun way to live your professional life, which is building something. So I put my resume together and I titled… It wasn’t even really a job search. It was more, I was new to Birmingham. I wondered if there was anything I could be of service in being a part of building something. So I put that resume together and I titled it Seeking the Intangible. And I was looking for that opportunity of talent and building something bigger than myself. And it was through some networking with my across the street neighbor who went on to become a board member of RFG who thought all I did was sell his wife incredibly expensive clothing who networked me to Bobby White, who’s the founder of RFG.

And in the first 10 minutes of my conversation with Bobby, and I’ll tell you, both of us went into that meeting thinking it was going to be a filler meeting. He was doing a favor for a friend, and I had seen a little bit of the wealth management industry after Nuveen had acquired Symphony and was like, “That’s not really my bag. My jam is more on the institutional side of things.” And 10 minutes into our very first meeting, we both canceled the rest of our day, and we spent the next two and a half hours in his office having a conversation that really started with what if. What if we took RFG, which had been founded in 2003, and at the time was an OSJ with LPL, what if we took that business and we tore it all the way down to the ground? And we rebuilt it from the ground floor up to be a platform that is designed, that is intentionally engineered, to serve independent advisors? What would it look like to be a client experience company first, a technology company second, and a corporate RIA third?

And I’ll tell you, walking out of that meeting, I was like, “This is it. This is it. This is the intangible. This is an opportunity to really build something very special.” And that’s how I found myself sitting in this talking to you today.

Jason Diamond:

Wow. So there’s a lot to unpack there. Thank you for sharing. And you shared it with a degree of vulnerability that I personally, I have a two-year-old and a three-week-old as of this recording. So it resonates with me. I think it resonates with a lot of advisors, people in our, and honestly, probably most industries, the constant pull in multiple different directions. And I love what you called it, seeking the intangible. And it sounds like you didn’t go in with any preconceived notion about… Many of our guests, by the way, that is the case. They walk in saying, “I knew since I was two years old I wanted to be in wealth management. I wanted to help be a steward of client…” And I love that your circuitous route took you a different direction.

I want to talk more about the firm, and we’ll dive in on some of these elements of your background also. But before we do, you mentioned a little bit of, at a high level, what RFG is. Give me a little more context, types of advisors you serve, types of clients you serve. And if you don’t mind, provide some stats around size as well.

Shannon Spotswood:

Absolutely. So we are on a mission to help independent advisors build their business without compromise by driving organic growth to create enterprise value. And I share that because in our mission statement is the passion that links us all together, which is helping independent advisors build what they want to envision for their clients, what they believe is the best representation of their vision and their values. So we are a platform, a full turnkey platform for independent advisors. We talk about our services as a flywheel. There’s a very intentional interdependency from technology to marketing to compliance to talent to investment management to coaching, operations, transition services, and capital solutions. All of it is knit together very thoughtfully in order to be able to deliver to the advisors on our promise to help them operationalize and professionalize their business, to serve their clients and to generate that organic growth, which is what translates into enterprise value.

What is so cool about the RFG advisor community, and I think is really the thread that binds between our teams and our advisors team is this servant heart growth mindset that you find it in every nook and cranny of RFG and certainly within all of our advisor partners. So the advisor profile for us, we do tend to skew a little bit younger. Average age is 45 years old. Organic growth across all of our advisors is north of 10%. So we’re very focused and leaned in on growth. We do have advisors that are lifestyle. We talk about them as lifestyle scaling and enterprise, and they run all along that growth at growth spectrum, depending on what do they want to build in their lives, what is going to help them really realize their dreams? And we’ll talk about this a little bit and just the growth of the firm and what we’ve been building, but we are at $9 billion.

So it’s been a big run in 2026, as I say, 10 years of pre-game warmup to be able to really talk about that level of growth. So just knocking on the door of $10 billion and truly, Jason, I can tell you, I feel like we’re just getting started. I feel like we are just at the beginning of the J-curve as advisors are really realizing that their most valuable asset is their time and the amount of enterprise value that they can create being independent. There’s a lot of different flavors of that. We’ve got some incredibly well-capitalized and very strong competitors, but the collective awareness around this bull market for advice that we’re sitting at the very beginning of is shining such a bright light on what does it mean to be independent? What does it mean to be really supported by a partner who’s all in to help them win? And that’s where we find ourselves. And by design, that’s where we find ourselves.

Jason Diamond:

Yeah, and it’s an exciting time. I completely agree. The space, the vertical you’re in, probably as much or more than any other pocket of the industry. You took the words out of my mouth, the J-curve. I completely agree with the story you’re telling. There’s one component of your background that I do want to ask about, which is many RIAs, platforms, and the like, the leadership team is intentionally ex-advisors in their own right. So I’m curious, do you think of it as a benefit or maybe to what degree is it not a benefit that you have never been an advisor and served clients? I do love the idea that you’re a business builder and you’re helping advisors to build a business. That’s not lost on me, but I’m curious specifically about never having been an advisor.

Shannon Spotswood:

I think it is so critical that we were advisor-founded. What we like to say is we’re advisor-founded and professionally-led. Bobby founded the firm in 2003. We partnered in 2015. Our third partner, Rick Wedell, who’s our chief investment officer, managing partner, joined in 2016. So the three of us really co-founded the version of RFG that is-

Jason Diamond:

The right version.

Shannon Spotswood:

… expressed in the market today. But you’re a hundred percent right to double click on this. And I think it is such an important area for reflection for advisors in terms of where are their greatest skills? Where does their passion lie? And what are they interested in building? That very first day that I met Bobby, his telling of the story is he looked at my resume the morning that we were meant to meet, and he is like, “Well, why would I hire her? She could do my job.” And he often talked about that where you get to this point as an advisor where the business is scaling and growing. And we certainly are seeing this in a lot of the larger teams that we’re talking to and the relationships that we’re beginning to build within the pipeline of these advisors who were attracted to the industry because they wanted to serve clients and find themselves as accidental CEOs, COOs, their chief cook and bottle washer to advisor to all of these C-suite titles.

And it’s not amplifying their natural skillset and it’s not aligned with what is actually their passion for the business. So I give a tremendous amount of credit to Bobby for recognizing more than 10 years ago really what it would take and how he could align team around him and build partnerships around him to be able to maximize the impact that we can have for advisors. So that north star of keeping advisors front and center is truly our, it is woven into our DNA and it is our north star. So we are a client experience company by design. We talk about it all the time, whether it’s how we’re building our team, how we’re thinking about investing in technology, how we’re soliciting feedback for advisors. I always say one of our greatest strengths as an organization is we’re active listeners and then we actually execute on it.

Our best ideas come from our advisors, but you’ve got to have that posture as a firm that everything you do is orienting around how do we help advisors operationalize, professionalize, drive organic growth, and create enterprise value? And you can’t do it sometimes. You’re either all in, chips all in, only winning when your advisors win, and only having that lens of will this benefit the advisor and their team or not. It’s not something that you can just dip your toe in and out of. And I think RFG, having that foundation from which to always build is absolutely critical.

Jason Diamond:

Can I try and paraphrase or synthesize, and you tell me if I get this right? The pitch is something to the effect of, “We are really good at what we do. Let us take all the BS off of your plate so that you can go out and be an advisor. Service your client and prospect.” Do you find that story is resonating more over time? I mean, you’ve been with the firm now long enough to see this kind of cycle of movement towards independence. How has that story evolved over time? Do you find it easier to tell?

Shannon Spotswood:

Oh my gosh, without question. And I would even put a shorter term window on it. I would say in the last 12 to 15 months-

Jason Diamond:

Oh wow.

Shannon Spotswood:

… there has been a collective awakening by advisors, and I think there’s a lot of contributing factors to that. One is obviously as we are all aware, the majority of the industry is now private equity backed. There has been a real focus on the aggregator model, transitioning advisors into a W-2 model. And as that has played out and that financial engineering has translated into some incredible valuations and returns, there has also been simultaneously advisors picking their head up and like, wait a minute, I wanted to get independent so I could serve my clients in a way that I felt best represented my vision and my values. And I’m finding myself increasingly in a captive environment. All the while the technology is getting better, the valuations are getting larger, the ability to control both your branding and what that means for your family legacy is increasing.

So over the course of the last 15 to 18 months, that story has just, while it’s been there for a long time, the independent movement was obviously sparked more than, gosh, now 16, 20 years ago in earnest. Now it’s just the passion and the knowledge that advisors are showing up to conversations in recognizing I want more. I want to spend my time where I want to spend it. I want to serve more families. I want to be well-positioned for generational wealth transition. I want to own the enterprise value. I want to build my team and I want the best tech. And that to me is exactly why we’re at the beginning of this J-curve.

Jason Diamond:

Yeah, I think you nailed it. And I agree with you that this notion of independence is not a destination in and of… It’s too broad of a term I think to use. And there are plenty of advisors who either started at one version of independence and need something different now, or to your point, thought they were going independent only to realize perhaps there’s elements of the business that aren’t as independent as they realized. And that’s where I think a firm like RFG to me, it’s not an accident that your firm fills this niche. This was advisor demand driven. Advisors said explicitly and implicitly, “We want to be independent. We want to own our equity. We want to have control over the things we like, but we want a support partner that helps us with all the back office, the middle office, investment management, the flywheel,” as you call it.

Shannon Spotswood:

That’s right.

Jason Diamond:

One other element of your journey to this point that I want to ask about, the succession journey or the journey to CEO, and I’m only asking because it’s somewhat recent, I think it was 2024, so we’re about two years in CEO. For the eight years prior to that, you were president.

Shannon Spotswood:

Yes.

Jason Diamond:

And this dynamic is near and dear for a lot of advisors. This idea you’re the heir apparent, but the date hasn’t happened until it happened. Was that a smooth transition date or did you find yourself, and I hope you can be honest about it, and if not, I understand, but I think this is something that a lot of advisors in their own businesses struggle with. So as somebody who’s gone through a major succession journey in the last two years, I’m curious what your thoughts are.

Shannon Spotswood:

The timing coincided with us bringing on a growth capital partner. So we closed on that partnership with Long Ridge in the fall of 2023, and we really set our sights on how do we bring this capital into the business and invest in our team, invest in our technology, invest in this desire to help independent advisors build their business. And Long Ridge really shares that long-term strategic belief that independence and the corporate RIA model is the ultimate winning model. So we have a lot of room to run there. So entering into that growth partnership with Long Ridge really provided a natural opportunity for that succession conversation to take place and to be able to take the company to the next leg. So we’ve tripled the size of the company over the course of the last two and a half years.

Jason Diamond:

Good for you.

Shannon Spotswood:

And as I said, I feel like we’re just getting started. I always joke we’ve had the longest pre-game warmup in history. In a lot of ways that’s by design. For me, the way that I can sleep at night is knowing that we are waking up as a team in this unified front to walk the walk for our advisors. It is incredibly important to us to honor the promise that we’ve made, whether it’s on tech or talent or transition services or marketing growth. So being able to lean in and deliver that, it takes a long time to build that institutional know-how and to be uncompromising in consistently making hard decisions, whether it’s around talent or the investments that you’re making or how you’re running and growing and building the firm. And so Bobby reached and Long Ridge and all of us reached this point where it was just a very natural way.

And I think it was such a gift that I had such a long warmup, if you will, in the bullpen, running the day-to-day of the business as president, being so close to sweating the details of how we built the foundation, how we run the firm. And then obviously Ed Swenson joined us as president in last fall in October of 2025, having joined our board when we partnered with Long Ridge. So he joined our board in September of ’23, and he and I set up a call every other week. So we just became this incredibly trusted confidant of mine as we made a lot of strategic investments and key strategic decisions in that first 15 to 18 months of our partnership with Long Ridge. So to be able to build and attract the caliber of talent that we have to RFG, I mean, I’m totally biased and talking my own book, but I think we have the best leadership team.

Doug Nelson joined us from Long Ridge as our CFO in November of last year, just bringing that rigor, particularly around capital strategies into our C-suite. So it was the right time to make that transition. And what I would say for founder advisor-led firms, it’s all about what are your growth ambitions? It’s what are your growth ambitions? Without question, when I joined and Bobby and Rick and I set upon this journey to tear the entire company down and build this robust tech stack and be at the forefront as an innovator in that space, that was experience that I had from my 20 years in San Francisco. And Rick had this incredible institutional pedigree having spent 12 years at Bain Capital plus two years at Stanford Business School, complimenting this authenticity that Bobby brought as an advisor, bringing that together. So recognizing as a founder advisor, if you have growth ambitions to 10X your business, it’s going to require that you bring high caliber talent to the table and allow for that room both from an equity participation perspective, but also just from what does the business need as it continues to scale up?

Jason Diamond:

That’s exactly right. And part of this gets back to private equity sometimes gets a bad rep in our space, but the reality is capital from private equity enables a lot of what you’re talking about. And I give you a lot of credit. I mean, you make the half joke about the longest pregame warmup ever, but I think of it as you learned on your own dime and you built all the kinks and ironed out all the kinks prior to having this critical mass of advisors on your platform. And we’ve seen certainly plenty of firms go that route too. So I give you credit for that. I think because we’re on the topic, let’s talk about it, private equity. Positive experience, negative experience, neutral, neither good nor bad. Just give me your… I don’t want to make the episode about the perils-

Shannon Spotswood:

Right.

Jason Diamond:

… and benefits of private equity capital, but just curious what your experience has been.

Shannon Spotswood:

I think this is one of those life lessons. Choose your partners wisely and great things can happen, whether it’s in your marriage or your friendships-

Jason Diamond:

Spouse. Yep.

Shannon Spotswood:

… or your business partners. And Long Ridge found us very serendipitously. I mean, we were probably two years from even contemplating bringing in a growth capital partner. They were introduced to us by a former board member and they were in our offices in January of 2023. And the most important things for us were twofold. Number one, they shared our vision and belief that the corporate RIA independent is the winning model for the industry and for advisors and clients. And number two, who they are as people is very much who we are as people. They’re builders.

Jason Diamond:

Culturally.

Shannon Spotswood:

They have this servant heart growth mindset that they share with us. So I feel incredibly blessed to say they’re amazing partners. And what’s interesting, and I’ll share this very openly, they’re the majority owners of RFG. We were very early in that time of bringing them on. They have always honored the promise that they made to us, which is we run the business. They are a strategic partner. They’re a great thought partner. They are the capital provider, but there has been multiple examples where we have made business decisions where there’s been some heat in the kitchen, in the boardroom, and we’ve felt very strongly about it. So I just couldn’t say enough great things about them. And one thing that I will just share, and I say this because they’ve shared this with me, I have had this incredible personal journey of growth bringing such a deep bench in Long Ridge into the firm.

And that has been certainly challenging at times. Do hard things, get comfortable being uncomfortable. It’s the ultimate definition. But I really think that is something that never gets talked about is what it means in upskilling the caliber of your talent, yourself, how you have to grow and evolve as an individual has been really, I won’t say it’s been easy, but I look back on what I’ve learned over these two years and just feel prepared as a leadership team, how we operate as a team, what is expected of us to be able to deliver and execute for our advisors in this next leg of growth.

Jason Diamond:

I think your marriage analogy is the perfect one, and I’m going to use it. And honestly, in a lot of ways. First of all, marriage is hard, good or bad. It’s hard. Second of all, it’s the ultimate… The institution of marriage is not good or bad. Private equity capital is not good or bad, but your answer is the right one. Pick your partner very wisely. My favorite part of your answer, because it’s the most original, was around a good capital backer, a good partner, whatever you want to call it, pushes you to be better. And I think that you’re surrounding yourself with, by definition, some of the smartest people in the industry, and that can’t be a bad thing. And the proof is in the pudding. The growth trajectory you’ve seen, it’s certainly no accident. I think part of it is tied to your incredible stewardship. You don’t have to answer that. You don’t have to be humble, but I’ll attribute it to you. That brings me to my next question.

Shannon Spotswood:

I do have to say really quickly.

Jason Diamond:

Please do.

Shannon Spotswood:

I will be celebrating my 27th wedding anniversary in October. So yeah, pick your partners.

Jason Diamond:

Congrats. And I feel equally blessed, I assume as you do. I have a great partner, I’ll say. I don’t know if she’s listening right now, but she’s a great spouse. What I was going to say though, good segue, I think there’s been more in recent years, but not a ton certainly of female C-suite wealth management executives. How do you feel about your role? Do you feel an increased burden? Is it an honor to you? Is it something that you don’t think much about at all? I’m curious what your thoughts are.

Shannon Spotswood:

I feel immense gratitude. I mean, just in general, leading RFG and locking arms with our team and our advisors is, I mean, a gift of a lifetime. I was incredibly fortunate to not just have mentors during my 20 years in San Francisco, but to have true sponsors. Whether it was the first hedge fund I worked at, I took that job because it was a female portfolio manager and at the time one of the only in the country. And she really opened up her heart to me and poured into me. And then 10 years at Symphony, the founding partners of Symphony, they dropped me into the deep end of the pool and gave me a lot of rope to make a lot of mistakes and continued to invest. So I have this foundation from which to build and to lead and to be ready for this role.

I couldn’t do any of this without my partners. Rick and I have been partners for more than 10 years. It really does take a village in the same way that it takes a village to raise your family. It takes a village to find the courage and the strength to lead in a way that really honors the gravity of the mission. But I’ll tell you this. One, I knew I wanted to work on Wall Street from a very young age, so I chose this. I knew what I was getting into, that it was a male-dominated industry. I have made particularly, this is one of the unique facets of the wealth management business, we have phenomenal both male and female talent, and I have made the strongest female relationships on this side of the business as compared to the institutional side of the business. So I think there is a richness to our side of the industry that doesn’t get enough air cover.

There are just phenomenal leaders, and I think increasingly so, we’re seeing more women stay in the game and raise into positions within the C-suite and leading these firms. I will tell you one thing in 2019, and I really give a lot of credit to Bobby for this in coaching me, is I was raised by wolves on Wall Street without question. I sat on a trade desk, I was completely comfortable with compartmentalizing emotion, and I made it a mission to develop intentionally my emotional intelligence. And that truly unlocked everything for me, and I think plays such a huge part of who I want to be and who I challenge myself to be as a leader.

And so it’s funny when I get the question asked of me about being a female CEO, because I think that’s what people feel must be like came very intuitively to me, but I had to learn it. I had 20 plus years of being able to run with boys and I needed to develop that skill. And it is a skill that I challenge myself on a daily to continue to lean into. And I think it is increasingly important both for men and women who aspire to leadership to hone the strategic and execution alongside that emotional intelligence.

Jason Diamond:

Great answer. And I think you know I admire a lot about you, but it’s certainly one of the things I admire most about you is over the last couple years in particular you’ve been a real beacon of positivity, of empowerment in that regard. You’re active on socials, you’re active at industry events, you’re always willing to talk to people. And honestly, that to me is the answer. A lot of people complain about this as a problem, and I want to just take a second to applaud you because I think you and your firm actually do something to at least try and actively solve some of this. And also you mentioned it earlier, but same thing with some of the next gen dynamics. You skew much younger than the average firm on the industry. And I think that too is to your credit around, okay, we’ve identified that we have a major succession problem in our industry. What are we doing to solve that?

Shannon Spotswood:

Absolutely.

Jason Diamond:

Let’s talk about growth a little bit. I agree with your thesis. This space you occupy, no better time to be in it. We’re at the perfect spot on the J-curve. Unfortunately, we are not the only two people to think that. There are also, I think, some other firms. This space has become crowded. What do you think about that? Just the fact that there’s more competition than ever. I mean, my view of it is there are enough quality advisors to go around, but curious what you think.

Shannon Spotswood:

Anytime I find myself wading into the waters of fear and scarcity around this topic, I’m reminded that 67% of the assets still remain within the wirehouse and IBD space. We got lots of room to run. I believe in a mindset of abundance. The data will tell us that the demand for advice is increasing by 30% over the next decade while the number of advisors is decreasing by 1%. So we’ve got, find me another industry where you see a graph that looks like that. On top of that, next gen, which I think this is so fascinating, next gen actually wants more advice when compared to the baby boomers. So baby boomers created our industry, and here we are sitting on $87 trillion worth of generational wealth that’s going to begin to transition. That doesn’t even include all of the wealth that will be monetized through real estate and family-owned businesses.

It is a tsunami. And what is, I think, really interesting is that next gen recognizes the value of their time. I’m sure if I had a conversation, Jason, with you and my husband about how intentional you want to be in terms of showing up for your children and the equal nature of parenting, that alone is changing the way the next gen thinks about both their professions as well as their family life, which means you by default have to hire professionals to do the things that you don’t want to spend the time doing.

Jason Diamond:

Really good point.

Shannon Spotswood:

So we have this incredible convergence that’s happening right now, and it’s coming at a time that technology is finally going to allow us to serve more families more intentionally along that wealth spectrum. So it is like, bring it on. There is more than enough to go around. We are in an era of abundance. And what I worry the most about, and this, it’s like climb up on the soapbox and let’s roll, about independence because I see and have so many conversations with advisors where they have been willing to accept such a compromised service experience that they would never allow to be delivered to their clients. So advisors are delivering this 24-hour concierge, high-touch, deeply thoughtful experience, estate planning, tax planning, financial planning, multi-generational conversations. They’re in it. They’re in the trench. And then they turn around and their service partner is so subpar.

They’re compromising their growth. They’re burying them in compliance and ops and clicks and swivel chair and tech that doesn’t work. So we’re at the very beginning of this bull run for advice. And I think advisors who recognize, I want to serve more families, I want more control over my time, I want to be able to build enterprise value on my personal balance sheet, have room to do it. So I welcome the competition. I think the best way to talk about it is iron sharpens iron. I learn so much from our peers and like, ah, they did this or they did that. How do we think more disruptively, more innovatively? How do we do it differently? So I think there’s a lot of room for all of us. You’re going to be busy, my friend. You’re already sitting there advising the lion’s share of the big deals, and I think you guys are just getting started as well.

Jason Diamond:

Yeah, it certainly feels like a bull market for advice and also I think a bull market for some of the… You allude to an interesting paradox, which is some of the biggest and most sophisticated advisors in the industry have really high-touch impressive service models, but they don’t seem to demand the same in return. I have some thoughts as to why. I think one could just be Kool-Aid drinking, like you don’t know any better and you’ve been there for so long. There’s just so much friction associated with moving a business and fear associated that it’s unless things get really dire or unless I find something that’s better enough or meaningfully better enough, I can gut it out. But the third one that comes to mind is these firms we’re talking about have unequivocally, they do a lot of good, a lot of bad, but unequivocally one of the things they do really well is brand.

Shannon Spotswood:

Yeah.

Jason Diamond:

How do you reconcile that question with a firm that obviously doesn’t have a brand that the average American consumer would know?

Shannon Spotswood:

We take a posture on this that is rooted in an Accenture study that was conducted several years ago, but I think still remains so true today, is that advisors think that the value proposition that their clients are looking for, either it’s that big monobrand that’s advertising at the Super Bowl or the alpha they’re ever able to generate or the portfolio investments. But the clients tell us that what they’re looking for in an advisor is, do you get me? Do you share my values? And do I want to spend time with you outside the office? And that is basically distilled down the way we talk about it is people connect with people. So now more than ever, particularly if you take a big step back and you think about the influencer economy and how brands, big brands, Nike or big consumer brands have really leaned into niche branding.

How do I get my brand into the hands of someone who’s very passionate about it? So advisors who develop their own brand, who have a presence on social, who have a presence in AEO and SEO, who are leaning in and expressing not only their client experience, but their vision and their values through their brand, I actually think as this generational wealth unfolds, that authenticity carries so much more weight than is my name on a football stadium. So it is those three factors. It’s just I’m comfortable. I don’t want ripple. It is friction and fear for sure. And then it’s like that branding is up for grabs because we certainly see one of the most fun parts of advisors joining RFG, this is a big part of what we do is helping them design and develop or reimagine their brand name, their logo, all the rest of it.

Once that creative energy is unlocked and you get to tell your story, your my why, that connective tissue is so powerful with the clients and with the growth that comes from that because I mean, I truly believe people connect with people. They’re looking for that. And I think more so now than ever with AI.

Jason Diamond:

You just took the words out of my mouth. Do you think AI perpetuates that?

Shannon Spotswood:

I think people are craving that. And this is why advisors who are powered by AI without question are going to win. Advisors are not going to be disrupted by AI unless they haven’t made the move to get themselves in a position to be able to leverage the technology, the brand, the talent, the maximizing of their time. But especially with something as important and as personal as money, as you walk through life, I mean, you are at the very beginning. I’m sending, I’ll have all three kids in college. But as you make these critical decisions in your life, whether it’s getting married or starting a business or changing jobs or buying your first house, buying your vacation house, all of these things, you can go right or you can go wrong. And having a trusted partner who really understands you, I actually think that we’re going to see the fees paid for advisors increasing as there is a greater premium placed on, I want deeply personal relationships that are tailor-made for me.

Jason Diamond:

But I assume the flip side of that is you have to do more. You as a firm and you as an advisor have to do more, and you can’t just raise fees with the same service model. So I think what is the corollary of that? What are some of the ancillary growth areas that you do beyond the financial planning and asset management that says, “We’re worth that money you’re going to pay us”?

Shannon Spotswood:

It is, and I love the work that https://www.wealth.com/ is doing here. I mean, the estate planning and tax planning, making that more accessible along that continuum of wealth spectrum, the blurring of the lines between ultra high net worth and high net worth, and then mass affluent is so exciting. Better, more robust planning is good for our industry overall. Obviously there’s a huge amount of demand on the tax side of things, particularly the 1040. It’s easy to find a CPA to do the cool complex stuff. It’s increasingly more challenging for advisors. That’s an area that I know a lot of firms have leaned into. We’re certainly doing a lot of work. But so much of this, Jason, is showing up at the right time for clients with the resources. It’s a really interesting conversation about, yes, you have to do more for your clients, but you don’t have to do more for all your clients at exactly the same time.

Jason Diamond:

That’s well said. The flip side of that is as an advisor, because ultimately the advisors are the ones making this decision. There are a lot of firms, and not even just firms that you would be competitors with, because the reality is you and I understand the industry landscape and where various firms fit in. For many advisors, it’s a long list of various firm names that they’ve heard. So what are some things that you think advisors should be asking a firm like you or a business development person at your firm to suss this out? How does an advisor go about understanding if a platform is empty or is really going to be able to deliver in all these areas?

Shannon Spotswood:

Remember back in the day when the Wall Street Journal used to run have a monkey throw a dart and see if you can beat the pros on stock picking? I love to do that with regards to our advisors. We always tell our prospects, “Throw a dart at any advisor that’s affiliated with RFG and call them. Certainly we can provide a list of advisors who we think you’re going to most align with in terms of what your growth ambitions are or the way you want to run your business or who you are, life stage, all the rest of it.” But I do think that getting that unfiltered experience, the good, the bad, the ugly. We always are like, “Are we perfect? Absolutely not. Do we though immediately want the feedback so that we can iterate to excellence to get better? Absolutely. Get that firsthand testimony.” So that’s number one.

Number two is don’t tell me, show me. There are so many, and it always pulls at my heart because as much as I love to win business and transition advisors, and I think that we’re working certainly at RFG on some really interesting technology that is anchored around removing that friction and fear by speeding up the time that you can make that transition in. And the tech is finally there to allow for this. So I think we’re going to be able to take variable number two and at least make that box a little bit smaller. But if I’m sitting as an advisor, I would want to see the evidence. Show me how you’ve solved the problems that advisors have brought to you. How have you refined your tech stack? How have you invested in your team? How have you made the decisions where the ROI can be measurable and tangible?

And I think too often I’m surprised that advisors get, it’s almost as if they get overwhelmed by the amount of information that they’re taking in trying to compare all these different firms. If I’m ever asked, I’m like, please work with a third-party recruiter. You need someone not only to act as an interpreter, but you need someone to help really keep your top three priorities at the front of your decision-making matrix, because it really is apples to oranges to orangutans and you get decision fatigue. And then advisors end up making this decision that is anchored in like, well, this is the highest payout, and I’m willing to take all of these sacrifices and paper cuts for this highest payout. And that is just such a travesty.

So it’s like, know what you want. What are your top three problems that you’re trying to solve? Talk to advisors that you get to pick just so you can do some secret shopping, and then demand evidence of how the firm, the platform has responded to feedback and gotten better as a result because that will tell you, are they really going to walk the walk or are they just going to talk the talk?

Jason Diamond:

I’m super grateful that you gave specifics there because it’s an easy question to dodge and talk around. So I completely agree. Your first answer, actually all three of those points you just made, but certainly doing name-blind calls, and I say name-blind because advisors worry about confidentiality. I think that’s one of the best and most underrated tools to learn about a firm is advisors now have so many colleagues. There’s been this diaspora of advisors where advisors know advisors everywhere. And that’s a benefit if you wanted to go and just network and have conversations with other advisors on your own. But if you’re worried about confidentiality, there’s certainly the mechanisms, and we do this all the time for advisors to set up name-blind calls. You dial into a conference line, it’s John Smith, and you pick an advisor’s brain and say, “Hey, you moved your book from LPL to RFG, and tell me what that experience was like and what were the positives? Give me all the negatives.”

To your point, you want advisors to ask those questions in advance. It’s better to ask those questions than to end up in the wrong marriage with the advisor.

Shannon Spotswood:

Absolutely. And the other thing is what an easy answer to BS around is tell me who’s a good fit for your firm. And it’s like, “Everyone’s welcome here.”

Jason Diamond:

Everybody. Yeah.

Shannon Spotswood:

It’s just not true. RFG is not a good fit for an advisor who is not open to using technology, who is not interested in outsourcing investment management, wh

Patrick Larkin, Partner & Practice Leader, Cerity Partners

Three years after launching his independent RIA, Patrick Larkin merged with Cerity Partners—but not because that was the original plan. He explains how ownership changed the way he viewed enterprise value, optionality, and the future of his business.

In Summary

Going independent is often viewed as the destination. Patrick Larkin discovered it was just the beginning.

Louis sits down with Patrick, Partner and Practice Leader at Cerity Partners and former founder of Oak Hill Wealth Advisors, to discuss an unconventional journey: leaving Wells Fargo to build an independent RIA, then choosing to merge that business just three years later.

Rather than following a predetermined exit strategy, Patrick shares how ownership fundamentally changed the way he thought about enterprise value. A conversation with a prospective acquirer revealed that buyers weren’t interested in purchasing a book of business—they were looking for a business. That realization reshaped how he invested, hired, delegated, and ultimately positioned his firm for the future.

The conversation from our Build Grow & Transact series also offers a candid look at life after a merger, from evaluating cultural fit and partnership to balancing autonomy with the resources of a larger organization. More broadly, it illustrates how ownership creates optionality—and why the most valuable decision an advisor makes may not be the one they originally envisioned.

The Storyline

After spending nearly 15 years building a successful practice at AG Edwards, Wachovia, and Wells Fargo, Patrick Larkin launched Oak Hill Wealth Advisors in 2022 with a simple objective: build a business on his own terms.

Like many advisors, he expected independence to be the final destination for a long time. But then there was the realization that ownership changes more than economics; it changes perspective.

And it became the beginning of an entirely different way of thinking.

As acquisition inquiries arrived sooner than expected, Patrick realized something that fundamentally changed his strategy. Sophisticated buyers weren’t evaluating his client relationships as a book of business; they were evaluating Oak Hill as an enterprise. That insight shifted his priorities from maximizing short-term profitability to building a business that could thrive beyond its founder.

Just three years after launching, Patrick chose to merge with Cerity Partners—not because he was looking for an exit, but because he believed it strengthened the future for his clients, his team, and his family.

Louis and Patrick explore what led to that decision, how ownership increased the value of his business almost immediately, why he compares independence to an IPO, and what advisors should consider if they hope to create options for the future—even if they don’t yet know what that future looks like.

Topics Covered

• Building enterprise value versus maximizing annual income
• Creating optionality through ownership
• Leaving Wells Fargo to launch an independent RIA
• Why buyers value businesses more than books of business
• Evaluating strategic partners and acquisition opportunities
• The economics of independence and business valuation
• Life after merging with Cerity Partners
• Balancing autonomy with enterprise-scale resources
• Leadership, succession, and building beyond the founder
• Long-term ownership and partnership models

> Download a transcript of this episode…

Listen and Learn Highlights for Advisors

Why did Patrick decide to leave Wells Fargo? (11:07)

Patrick explains why growing frustrations around control, firm priorities, and the ability to build his business eventually outweighed the comfort of staying put.

How did going independent immediately change the value of his business? (21:42)

Patrick introduces one of the episode’s biggest ideas: why launching Oak Hill felt like taking a company public and how ownership increased the firm’s value almost overnight.

Why did Patrick sell only three years after becoming independent? (20:03)

An unexpected conversation with a prospective acquirer completely changed how he viewed enterprise value and accelerated his long-term thinking.

What separates a business from a book of business? (21:42)

Patrick discusses why recruiting advisors, delegating client relationships, and investing beyond himself made Oak Hill more attractive to strategic buyers.

Why Cerity Partners? (26:48)

Rather than focusing on valuation, Cerity emphasized culture, partnership, and long-term alignment—qualities Patrick says ultimately mattered most.

What is life actually like after a merger? (37:57)

Patrick offers an unusually candid perspective on autonomy, leadership, and why he says he hasn’t second-guessed the decision once.

Key Takeaways

• Ownership creates opportunities that often aren’t visible until after independence.
• Enterprise value is built by creating a business that can thrive beyond its founder.
• The first acquisition conversation can be valuable even if no transaction occurs.
• Cultural alignment may ultimately matter more than valuation when selecting a long-term partner.
• Independence doesn’t eliminate future options—it expands them.
• Strategic transactions can strengthen outcomes for clients, employees, and owners simultaneously.
• The goal isn’t simply to own a business; it’s to create choices for what comes next.

https://youtu.be/f7FGLGjBbyo

Quotable Moments

“The day Oak Hill launched felt like the business had gone public.”

“Potential acquirers weren’t interested in buying a book. They were interested in buying a business.”

“Ownership isn’t simply about control. It’s about creating optionality.”

“The fear of leaving is almost always worse than the actual experience of leaving.”

FAQs

Why did Patrick Larkin merge with Cerity Partners only three years after launching his RIA?

Patrick explains that independence changed how he viewed enterprise value. After learning what sophisticated buyers were actually looking for, he intentionally built Oak Hill as a business rather than simply managing for annual profitability.

Why does Patrick compare independence to an IPO?

Because ownership immediately transformed the economic value of his practice. Rather than participating in an internal succession model, he owned an independent enterprise that carried substantially greater market value.

What changed after Patrick became independent?

Beyond gaining control, he began making decisions through the lens of enterprise value—investing in advisors, systems, and infrastructure that would make the business less dependent on him personally.

What made Cerity Partners stand out?

Patrick cites the firm’s culture, partnership model, meritocracy, long-term vision, and ability to combine local autonomy with enterprise-level capabilities.

Is this episode only relevant for advisors considering selling?

No. The broader lesson is that ownership creates flexibility. Whether an advisor ultimately remains independent or joins another organization, understanding how enterprise value is created can influence decisions from day one.

What is the biggest lesson Patrick hopes advisors take away?

That independence isn’t simply about leaving a firm. It’s about creating the ability to choose what comes next on your own terms.

Patrick explains that independence changed how he viewed enterprise value. After learning what sophisticated buyers were actually looking for, he intentionally built Oak Hill as a business rather than simply managing for annual profitability.

Because ownership immediately transformed the economic value of his practice. Rather than participating in an internal succession model, he owned an independent enterprise that carried substantially greater market value.

Beyond gaining control, he began making decisions through the lens of enterprise value—investing in advisors, systems, and infrastructure that would make the business less dependent on him personally.

Patrick cites the firm’s culture, partnership model, meritocracy, long-term vision, and ability to combine local autonomy with enterprise-level capabilities.

No. The broader lesson is that ownership creates flexibility. Whether an advisor ultimately remains independent or joins another organization, understanding how enterprise value is created can influence decisions from day one.

That independence isn’t simply about leaving a firm. It’s about creating the ability to choose what comes next on your own terms.

Related Resources

From Start-Up to $31B Behemoth RIA: The Catalysts Behind the Growth of Mega-Firm Cerity Partners

Ownership Matters: What Advisors Need to Know When Evaluating Firms

Top Tips for Setting Your Business Up for Success Years Before a Move

Patrick Larkin
Partner and Practice Leader

Patrick is a Partner and Practice Leader in the Lansdowne, VA office. He is a member of the Lansdowne Practice, where he works closely with families, foundations, and non-profits to help them define and achieve their financial goals with clarity and confidence.

With a deep specialization in retirement income distribution planning and complex risk and wealth management strategies, Patrick is known for helping clients simplify complicated financial decisions, reduce uncertainty, and build sustainable, long-term plans. His approach emphasizes fiduciary responsibility, transparency, and personalized guidance — ensuring clients always feel informed and empowered.

Prior to joining Cerity Partners, Patrick was the founding member of Oak Hill Wealth Advisors, where he built a highly respected independent advisory practice that earned the trust of families, professionals, and mission-driven organizations across the region. His leadership was instrumental in shaping a client-first culture that continues today.

Patrick’s work is rooted in a passion for long-term relationships — guiding clients not just through markets, but through life’s milestones such as retirement, business transitions, philanthropic planning, and wealth transfer across generations. He takes pride in being both a strategic advisor and a steady partner to the people he serves.

Patrick lives in Bluemont, VA, with his wife Angela, their two children, Paige and Sean, and their Golden Retrievers, Huckleberry and Genoa. Outside of the office, Patrick and his family enjoy an active lifestyle — whether it’s hiking and backpacking on the Appalachian Trail, biking the Great Allegheny Passage, or sailing on the Chesapeake Bay. These experiences reflect his belief in balance, resilience, and enjoying the journey — values he also brings to his work with clients.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

View the transcript of this episode…

Build, Grow & Transact: From Breakaway to Transaction in 3 Years

A conversation with Louis Diamond and Patrick Larkin, Partner & Practice Leader at Cerity Partners.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: From Breakaway to Transaction in 3 Years. It’s a conversation with Patrick Larkin, Partner and Practice Leader at Cerity Partners. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Ownership as a way of creating opportunities you can’t always predict. That’s exactly why we created our Build, Grow, and Transact series. Independence isn’t the end of the story. It’s often the beginning of thinking differently about enterprise value, optionality, and what comes next. Today’s guest is Patrick Larkin, Partner and Practice Leader at Cerity Partners, and formerly the founder of Oak Hill Wealth Advisors. Patrick spent nearly 15 years building a successful practice at A.G. Edwards, Wachovia, and eventually Wells Fargo before launching his own independent firm in 2022. Just three years later, he merged that firm into Cerity.

At first glance, that timeline might seem surprisingly short, but as you’ll hear, the merger wasn’t a change in direction. It was the result of seeing his business differently once he owned it. Yet, it’s this perspective that really brings that thought home. Patrick said the day Oak Hill launched felt like the business had gone public because overnight, what had been viewed as a book of business became an enterprise with substantially greater value, some four to five times the value of what it was worth at Wells. And that realization changed the way he invested, the way he hired, and ultimately the way he thought about the future.

Pat and I also talk about something advisors don’t often discuss candidly, what life actually looks like after a merger. How much control do you give up? What changes day to day? How do you know whether you’re joining a partner or simply selling a business? Whether your long-term plan is to remain independent forever or eventually join a larger organization, Patrick’s experience is a reminder that ownership isn’t simply about control. It’s about creating optionality and putting yourself in a position where the next decision is yours to make. So let’s get to it.

Patrick, thanks for coming on our show today.

Patrick Larkin:

Oh, my pleasure. Nice to meet you, Louis.

Louis Diamond:

You too. So let’s start off basically how we start every interview. Tell us about yourself, your background, and how you found your way into our industry in the first place.

Patrick Larkin:

Yeah, thank you for asking. I knew I always wanted to be a financial advisor. That part really wasn’t in question, but upon graduating college and being a 22-year-old, I knew that it was probably not practical to walk in and start advising people my parents’ age with their life savings. Probably wasn’t going to be a recipe for success. So I took a quick tour through the pharmaceutical industry first, which ended up being unexpectedly valuable. My employers there pushed me to think like an entrepreneur and within our territories. And honestly, that mindset never left me. It shaped how I built everything that came after. Eventually, an opportunity presented itself in Loudoun County, Virginia in Northern Virginia, and I became an FA trainee with A.G. Edwards, absolutely fantastic firm to start my career.

Now, what drew me to this career was pretty simple. I felt like it was one of the professions that we had an opportunity to do so much good for others while simultaneously also doing well for yourself, and those two things aren’t in conflict. I also really loved the idea that in this profession there was no hiding. You don’t get paid to show up. You get paid for what you actually do. And perhaps for me, what was most important, I loved the weight of responsibility. I loved earning people’s trust. I loved the idea of deserving, being deserving of their trust, and being a steward of what they’ve worked a lifetime to build. I never took that lightly, and I still don’t.

Louis Diamond:

That’s amazing. Yeah, I mean, the number of people I’ve heard, you talked so fondly about A.G. Edwards and there’s a bunch of other firms that have since been absorbed or emerged that are like the regional firms of old. So not surprised to hear you loved it. A.G. Edwards, obviously, became Wells Fargo Advisors or was acquired or merged with Wells Fargo. So I know you’re at Wells and A.G. Edwards until 2022. So give us a quick version. How’d you build your practice from the pharma world into being in FA?

Patrick Larkin:

Yeah, so as I started with A.G. Edwards, I came in at really just the perfect time. It was towards the end of the financial crisis. And I built the business the old-fashioned way with a lot of cold calling and eventually did some dinner seminars, which I can tell you is a very expensive way to learn how to speak in front of a room. But I made some progress, and I was also in a great office, small enough that some of the advisors there would hand off some of the smaller accounts that they weren’t interested in working with, and got an opportunity to get a lot of reps in working with real life clients and individuals. I knew early on I didn’t have enough talent to win on talent alone, so I made up for it and compensated for that with really hard work.

The real turning point came for me when A.G. Edwards was first acquired by Wachovia Securities, and that was about five years into my career. And at that point, my branch manager, who was eyeing retirement, asked me to step in as her partner, and that changed everything. We eventually moved over to a Wachovia Securities office, another really great local office in Loudoun County, Virginia. And from that office, I worked on and became a CIMA, a CFP, worked with the clients, built a business through referrals. And I found at that point in my career when I would go to a meeting with Wachovia, eventually Wells Fargo, as a young 30-year-old, I would look around the room often and realize that I was the youngest person in the room.

The funny thing was 10 years later, I would go into that same room and I’d look around and I still was the youngest guy in that room. And those demographics in our industry, and when I came into our industry, ultimately led that office that I worked in with Wells Fargo Advisors, I eventually was the recipient and party to five different succession plans-

Louis Diamond:

Wow.

Patrick Larkin:

… at Wells Fargo Advisors. I hoped that I had built a reputation as somebody that these other advisors would entrust with their clients. And over that time period, really, I would say professionally, one of my accomplishments I’m most proud of is all five of those retired advisors that I used to work with, who had an opportunity to see me work with clients, all became clients of mine, I still continue to work with. And it’s professionally just one of the greatest honors that I’ve ever had.

Louis Diamond:

I mean, that’s a large number of advisors you helped sunset, but I would agree it’s the ultimate proof of concept that they not only trusted you with their clients and their life’s work, but now also with their family’s wealth. So I like that, kind of the full life cycle there. So I’m curious, though, you stayed at Wells through a really turbulent time through the fake bank scandal. There’s a lot of attrition. I mean, obviously, they’re still a powerhouse to this day, but what kept you at Wells for as long as it did before you left in 2022?

Patrick Larkin:

You described it as a turbulent time. Pretty turbulent might be an understatement. Even before Wells, the transition to Wells, Wachovia Bank had been the first company that we transitioned to from A.G. Edwards. And we, of course, went through the financial crisis during that time period and handholding our clients and helping them get through that time period and dealing with concerns that we shouldn’t really have to be prepared with. “Is my money safe? It’s not what’s happening to the market, but is my money safe in your institution?” But once things stabilized, I found real purpose in partnering with some of the retiring advisors and opportunities that came up. It was a really wonderful climate and atmosphere in our local office. It was really a family-like atmosphere, and I still had a lot to learn. And all those advisors that I partnered with, I’ve joked I’ve never had an original idea in my entire life.

I stole all my good ideas from them. And some of them were really ahead of their time, and I learned, adopted, and built my own philosophies by working closely with them. Ultimately, by the time I left Wells Fargo, I was finishing up the fifth sunset program and had only made my way halfway through the sunset before the opportunity presented itself to create my own practice.

Louis Diamond:

So I’m curious, when did you first seriously start thinking about leaving and what really tipped the scales for you? What was the proverbial straw that broke the camel’s back?

Patrick Larkin:

Yeah, it really was a number of small items and ultimately one big one. But for a long time, I’d been content, but as I tried to grow the business beyond what I could do individually, I felt like I kept running into walls. There were it felt like limitations on how I could build out my team and structure the practice the way I envisioned it. Additionally, there were some new policies that also started to bother me. One of them was the platform advisory fee, which in my eyes was less about client transparency and more about replacing a declining revenue source on the firm’s balance sheet. And after dealing with clients and helping them through the bank scandal at the firm, I was concerned that this would come back and hurt me and the relationships that I had with my clients. Incidentally, I just recently onboarded a new client that transferred to us. And for them, looking at their statement, identifying this platform advisory fee-

Louis Diamond:

Oh boy.

Patrick Larkin:

… was the last straw for them before they moved about 15 million of assets to us. Also, I thought I would be I would be a better allocator of resources than Wells Fargo. Wells Fargo retained about half of the revenue that I earned for the business.

They seemed to think that the best allocation of that money was additional middle management. Whereas, I thought investment in technology, investment in additional personnel, and an investment in marketing were best places to continue to build out my vision. The final straw, and really a thing that crystallized everything for me was when I read a book in 2021 called The Infinite Game, a book written by Simon Sinek. Chapter eight, the title is Ethical Fading. And it uses the Wells Fargo bank scandal as a case study in what happens when a firm loses its moral compass. I read the chapter and thought, “There it is, I have to do something.” That was really the final push I needed.

I mentioned earlier I was very fortunate to start my career with a company called A.G. Edwards, a regional brokerage firm. And while I was at A.G. Edwards, there was a research report that came out on A.G. Edwards as a company. And I’m going to paraphrase a little bit on what was said in that report, but ultimately there was a line in there, and it was a criticism, but I took it as a huge positive as being an employee there. The line said, “While management does not necessarily say it, we believe the client is put ahead of the shareholder.” And that was something I was very proud of. And I just, upon reflecting on it, felt confident those were words that I never was going to see go to print about Wells Fargo.

Louis Diamond:

So you left Wells in 2022 and founded Oak Hill Wealth Partners in Lansdowne, Virginia. Walk us through that decision. Why go independent rather than going to another firm?

Patrick Larkin:

I really thought moving to another firm, the things that I had grown frustrated with at Wells Fargo Advisors, I would also find at another wirehouse firm. I was ready, and honestly, the simple answer is I thought I could do better. And I wanted control after having what I felt like was very little control. I had grown frustrated with others making important decisions, and I wanted an opportunity to grab the reins and make decisions on my own. I believe at that time, the future of wealth management was going to be built around fiduciary advice, and I didn’t want to watch that from the sidelines anymore. I was watching what was happening in the industry. And as we were trying to hire new advisors, reaching out to college graduates who were studying CFP programs, identified that they were more inclined to want to start employment with an RIA than a wirehouse.

What made the timing work really well was Wells Fargo had actually introduced a program to help advisors in the private client group spin off and establish their own RIAs. Now, whenever I tell this to another advisor, particularly ones that are wirehouses, they can’t understand it. And quite frankly, I don’t understand why they helped us do it, but we were about the 30th practice that they helped us through this process and they provided real support. They hired consultants, made vendor recommendations, even referrals to financing so I could pay off my last succession plan before I left. The only really upside for Wells Fargo was that the ask was that we continue to use First Clearing as the custodian. And one of the downsides for me was I was going to leave all of my deferred comp behind with Wells Fargo.

Now, all clients had to do to join me was sign a positive consent. And on May 9th, 2020, we turned on our computers in our new office and our clients were already there. That same day, we launched and started a relationship with Charles Schwab. And it was so exciting to be able to start shopping for what I thought was the best FinTech, really feeling like I was stuck with proprietary tools that Wells Fargo advisors had offered. I felt like I was a kid in a candy store. And if there was a cool tool that I identified that would help us serve our clients better, I was all in and I was buying it. I really feel that some of the technology that Oak Hill eventually bought into and some of the tools we’re using now are going to take years and years before they eventually trickle down to where the wirehouses are, if ever.

Louis Diamond:

Interesting. So it was really it was for the most part an internal move from one-

Patrick Larkin:

It was-

Louis Diamond:

… channel to the other.

Patrick Larkin:

… it was an internal move, but there was no requirement to stay at First Clearing. As a fiduciary, they couldn’t make those demands. And again, they helped us with the financing, which is really unusual that they helped us secure a loan so I could pay off the last retiring advisor. It’s really unusual that a bank will loan money where there is no business at the time, but because of previous experience that financial institution had working with Wells, they helped us facilitate the transaction. And the program is still in place at Wells Fargo, which is absolutely amazing to me after the experience that I’ve just had myself.

Louis Diamond:

Yeah, it’s interesting. I mean, does it cannibalize a more profitable revenue source? Sure. But if the alternative was all the assets go to Schwab or Fidelity, to me, honestly, it’s smart. I think they played the long game by not being adversarial on it.

Patrick Larkin:

I think they played a long game and they took the philosophy, and I think they use it as a recruiting tool that if you love them, set them free. And that’s exactly what they did.

Louis Diamond:

So for the rest of the episode, I want to talk about your eventual, and not that long period of time, transaction or decision to merge Oak Hill with Cerity Partners. This is our Build, Grow, Transact subseries. And I was really struck by your story because you were three years or so into running Oak Hill, and then your merger with Cerity Partners, an amazing RIA closed. That’s a fairly short runway. Usually when I see folks go independent for the first time, it’s 10, 15, 20 years, maybe never, that they decide to merge or sell. I’m curious to understand your thinking about the transaction. Were you looking to do something? Or was it just like right place, right time and the opportunity presented itself?

Patrick Larkin:

I had started Oak Hill with the intent of eventually down the road, much closer to retirement, looking for a partner. The opportunity and what I learned early on helped change that idea and philosophy, and I adapted and made modifications to take advantage of it.

Louis Diamond:

Interesting. So you weren’t necessarily planning on selling or merging the business, it just kind of circumstances happened the way they did?

Patrick Larkin:

Yeah. When we started Oak Hill Wealth Advisors, it was a really pretty short period of time before we started getting calls from larger national RIAs about potential acquisition, much sooner than I expected. Early on, I just brushed them off, but about a year in, I took one of those calls and it really just opened my eyes up. I realized for the first time this small firm, this little practice actually had some real value, way more than I’d given it credit for.

That first call, that first exploration didn’t go anywhere. It wasn’t a good fit. But what it gave me was a much clearer picture of what the serious acquirers were actually looking for. And that changed decisions I made at Oak Hill going forward. I really at that point stopped trying to optimize for near-term profit and really thought of my business as a business and started building towards enterprise value, sometimes at the cost of short-term income. And that turned out to be exactly the right call.

Louis Diamond:

That’s such an interesting perspective. Let’s double-click into that concept. So it sounds almost counterintuitive that if you kind of had this light bulb moment that like, “Okay, maybe I want to transact my business sooner than I initially thought.” I think most people would say, “Let’s become lean and mean. Let’s become as profitable as possible so my EBITDA’s higher.” But you took the different approach. What were the decisions you did to invest more in enterprise value rather than current cash flow?

Patrick Larkin:

A true business is one that doesn’t need me to be here every day to operate. And when we left Wells Fargo Advisors, it was myself and one other advisor that created Oak Hill Wealth Advisors. I was responsible for about 95% of the assets and revenue. And one of the more significant investments we made is in additional advisors. I recruited three new advisors, all CFPs, to join Oak Hill Wealth Advisors. Whereas, before I had been largely managing all the relationships myself. For someone that kind of grew up in the regional wirehouse space, it’s pretty counterintuitive to start moving relationships away from you onto other advisors. You’re trained and built to create a moat around your relationships, and realized that the potential acquirers are not interested, at least the ones I was interested in, weren’t interested in buying a book. They were interested in buying a business.

And that just meant every decision we made going forward was not profit-driven, but how can I increase the value of the business? So after that first call, I knew I probably would be looking to move forward with a transaction sooner as opposed to the end of retirement. That information that I got on that first call helped me realize that when Oak Hill Wealth Advisors opened its doors on May 9th, 2022, we effectively had an IPO. I had great familiarity with how the succession plans at Wells Fargo Advisors worked. And on that day that we opened our practice, the value of my business jumped to be four to five times the value of it in a succession plan at Wells Fargo Advisors.

Now, I knew going forward that I was going to be able to increase revenue. I was going to be able to increase EBITDA. I was going to potentially have some benefits from a market tailwind. I knew the multiples of EBITDA that the firms use may fluctuate, but the biggest change by far occurred leaving the wirehouse and having the value of my business grow four to fivefold in that same day. So what I really focused on was making sure that I was going to, when I was ready to start looking again after I had worked on improving the practice, really was going to look for a firm that was going to be a good cultural fit for both my clients, my team, and myself.

Louis Diamond:

That’s such a cool perspective. I’ve never heard anyone say that the day we launched your independent business was like an IPO. But honestly, it’s so true. You’re planting a flag in the ground that like, “Here is real value. This is value that we’ve created that we own rather than it being a book of business and a W-2 paycheck.” And it’s a fascinating perspective.

Patrick Larkin:

Yep. It really is amazing that the value changed that much on one day and the future value changes. Looking at the equity that I owned in Oak Hill Wealth Advisors, it made sense to consider is there a better way to take some risk off the table for myself and my family and diversify some of the equity that I had in Oak Hill Wealth Advisors with a larger enterprise?

Louis Diamond:

It makes complete sense. Obviously, everyone would sign up for 4 to 5X increase in value.

Patrick Larkin:

Sure.

Louis Diamond:

That’s not the reason most people go independent, but it’s important to know. And also, what I really liked about what you shared is I think a really valuable learning for anyone is those calls come in, whether it’s from annoying people like me or from an acquirer, from a firm, they’re not all noise. You took it as an opportunity to learn. Even though that first person who called wasn’t the right fit, it crystallized something in your mind and it let you make proactive decisions that ultimately paid off in spades when it came time to sign the dotted line for your transaction with Cerity. So I think it’s brilliant. And it’s very big picture, big-business-owner-type stuff that I think a lot of people will just filter out because it’s annoying and I’m young, I’m not looking to sell, but that was the journey.

Patrick Larkin:

Yeah, that first call changed my opinion about timing of when to move forward with a partnership. Originally, I thought this would be something at the end of retirement. The timing of doing so sooner seemed a lot more appealing after having that conversation and realizing what we had actually built.

Louis Diamond:

Amazing. So ultimately you decided to merge with Cerity Partners. We’ve had Kurt Miscinski from Cerity Partners on the show. They’re a real heavyweight within the RIA world. Most recently, they were valued at $8 billion in a recap, and it’s a very impressive firm. What specifically drew you to Cerity versus other potential buyers? Like you said, you got a lot of calls.

Patrick Larkin:

After that first call, I just got to work and focused on continuing to take care of our clients, building a team, adding new advisors, being a mentor to those advisors. But at the same time, we were being approached fairly regularly by that point. And I had a pretty good system for quickly deciding whether something was worth a second look, and most weren’t. But about a year ago, one of the national RIAs caught my attention and I started having conversations with them. And once I had progressed with them, I though, “You know what? If I’m giving this consideration, I really need to cast a wider net.” So I reached out to other RIAs that I had looked at and admired and been keeping an eye on. And ultimately, my longtime business coach, Barbara Kay, suggested I talk with Cerity Partners, a company that one of her other clients had just recently joined.

And from the very first call, I could tell something was different. And I talked to many different companies. Cerity Partners, and an individual I spoke with, Geoff Newman, they weren’t leading with valuation formulas or deal structure. They were asking questions about my clients, my team, and how I actually ran the practice. They had a very defined process for identifying partners who were genuinely compatible, not just advisors with books that were transferable. And that distinction mattered greatly to me. They also offered really, in my opinion, the right balance of support and still having some autonomy. And their aspiration to deliver consistent standard of care to clients, whether they be in California or Virginia, so that those individuals get the same quality of experience, resonated with how I was already running things within my practice. That combination of support and autonomy, I really liked the idea of continuing to have oversight over my local practice, over our practice, which included the budget, salaries, and bonuses.

It more than anybody else felt like a partnership and not a buyout. And I really appreciate it during that first call, Cerity was the only company that talked about a hundred-year plan. It was amazing to me to hear what their thoughts were. Most of the other firms I spoke with talked about valuations. And very quickly in the process, I found myself on a Zoom call with a Patagonia fleece vest-wearing private equity rep walking me through a valuation. And it was efficient, but it was not a cultural fit for me. And the infrastructure behind us and the combination of autonomy is really harder to find than most people think. As I progressed with Cerity, I remember early on in the process thinking to myself, “My God, I hope they want me, I hope they want me,” because I could tell I’m a very process-driven person They had a process with the way they brought me on board.

And ultimately, we had a due diligence trip set up to go to one of their larger offices where I met with one of their leaders, Claire O’Keefe, part of their practice development, and had an opportunity to meet with different leaders within the firm and really get my arms wrapped around the potential that they had. Just the quality of the people I encountered through the whole process just kept reinforcing the decision. And by the time we got to the finish line, it didn’t feel like a transaction. It felt like I was joining something that I was excited to be part of. So just a little bit more about what attracted me to Cerity, their culture is just phenomenal. Cerity Partners uses the word “meritocracy” and they actually mean it. Ownership and influence here track your contribution, not your tenure or how well you play the politics.

I just attended my first partner meeting in April, and without exaggeration, it was the most extraordinary professional meeting I’ve attended in my 25-year career. During the meeting, there was open debate about the direction of the firm, and every voice in the room carried weight. You could feel the culture. And that type of culture is built over years. You can’t fake it. Everyone in the room it felt like was rowing in the same direction. And by the time the meeting was over, I was so excited to get back to my team and tell them about what I had just witnessed, I wasn’t looking for the exit. I was looking for the brick wall to run through. I was so excited. And every once in a while I wonder having spent so much time in the wirehouse spaces, the bar just set really low for me when I talked to some of my other colleagues that have been independent for a long time.

But it was just an absolutely amazing experience. And I do want to just add, one of the last really important things to me about Cerity Partners is I’ve been very fortunate with my career and in this profession. And part of my goal over the rest of my career is to have a legacy. And my legacy currently exists with the families I’ve advised and the team that I’ve built and have served and led. But Cerity Partners is helping me achieve even a greater legacy in our industry with our shared long-term goals. During my first meeting, they talked about their hundred-year vision of being a worldwide employee-owned professional services firm. And currently, and this is very exciting, the employees are the largest shareholder of the firm.

No one else I talked to talked about their long-term goals like this, and it’s a vision I believe in. I want to contribute to help to see it accomplished. And one day when I do retire, I want to look back and see how I contribute it to a company that I believe is going to change the direction of professional wealth management.

Louis Diamond:

Wow.

Patrick Larkin:

My partnership with Cerity Partners is going to make that a reality. It’s just an amazing place. Yeah, very happy.

Louis Diamond:

Honestly, you can’t fake that type of enthusiasm. It sounds like-

Patrick Larkin:

It’s not-

Louis Diamond:

… you entered into a transaction, which is it’s like jumping into the deep end. How do you sort through what’s the sales process versus what’s real? How much of this is actually going to translate to my life? But hearing you not that long after the transaction, you still feel that and it’s very cool. In the press release I read, you cited estate planning, private markets access, and cross-border planning as key reasons for the merger. Can you talk about what it was about those? Maybe-

Patrick Larkin:

Yeah.

Louis Diamond:

… anything else that was missed?

Patrick Larkin:

Yeah.

Louis Diamond:

And were those not things that you felt like you could have delivered yourself as a standalone?

Patrick Larkin:

I thought that they were going to help me be able to be more effective in delivering those, but they weren’t the complete picture. The capabilities that we cited in the release were genuine gaps I wanted to fill and have available for clients and be able to prospect and go after new additional clients. But being fully honest, there were also deeper drivers. One was my team. Sometimes we get emotional about this. Being someone who’s trusted is really important to me, and that’s something I hold in high priority. There are people that followed me out of Wells Fargo to join me. One of my client associates had delayed her retirement so that she could join me and help us launch for the first three months. One of my other client associates has been with me close to 15 years. These are people that trusted me to do the right thing and to make sure that I wasn’t walking them off the plank.

Being able to join Cerity Partners and give them a future that didn’t hinge entirely on my personal longevity was a huge relief. And Cerity Partners is an ownership culture. I’m so happy to say today that every single individual on my team in our practice in Lansdowne is now either an equity owner in Cerity Partners or very shortly will be an equity-

Louis Diamond:

So cool.

Patrick Larkin:

… equity owner. So they have a stake as well in what they’re building. It matters. My youngest client associate noticed how much it costs to send to FedEx. And he goes, “Now that I’m an owner, maybe we should rethink about sending regular mail.” Another driver was my family. And I’ve always had the philosophy of trying to prioritize and clients first, team and colleagues, and then my family. And I’ve always made decisions that if I put those others before myself, eventually I’ll be taken care of.

And going through this transaction, it was so generous to my family and provided such security. There was a little bit of guilt that, “Am I doing this for all the right reasons?” But being able to secure my family’s future, converting equity in a three-year-old RIA into a stake of a $8 billion-plus valuation with institutional backing, that was a meaningful moment and I’d be less than honest if I glossed over that. I also really wanted to be part of something larger than myself. And the opportunity to help build a legacy in this business with Cerity Partners really gives me the platform to do that.

Louis Diamond:

Very cool. I can tell that you’re genuine, not just because of the way you sound, the way you’re speaking, but in the very beginning of the episode, you talked about the reason you got into this business was because you thought it gave you the dual purpose of being able to help people, but also being able to enrich yourself or your family. So this answer, it comes full circle. You’re able to accomplish all these goals, which made it the right decision. And I think, look, I say to advisors all the time, “You’re allowed to be greedy, you’re allowed to be selfish as long as the clients are still in the front of your mind as the most important thing.”

There’s nothing wrong with doing better for clients, building a legacy in your case, but also reaping the rewards of all your hard work and labor and also all the risks that you’ve taken over your career. I got to ask you, though, from being an employee of Wells, where you were running your team, for the most part, you can run the business within their guardrails the way you want, to then running an RIA, which is really like you’re fully in control of everything, to now being a partner, but you’re not the one who has the name on the door anymore.

Patrick Larkin:

Right, right.

Louis Diamond:

Well, how do you think about the giving up control and full ownership of your practice versus owning a very small amount of a much larger entity?

Patrick Larkin:

There was such continuity. Oak Hill Wealth Advisors and Cerity Partners were so philosophically aligned that I genuinely never felt like I was giving up anything that I wasn’t glad to let go. My wife joined the business shortly before I left Wells Fargo Advisors. And still to this day, on my drive home from work, I call her up and say, “You’re not going to believe this.” And it’s all a positive, good thing. So Cerity has struck the perfect balance of that autonomy and support combination that I was looking for. So I still have control and a say over the way our practice is managed. Very shortly after the merger, my supervisor came down and met me for the first time, and we went out together after the day had ended. And early in the conversation I said to him, “What can I do to make your life easier?” And he said, “Pat, what can I do to make your life easier?” And that set the tone that still exists to this day.

I almost cried when he said that because that was so different than what I had experienced up to that point. So the collaboration, the way we work together, it’s just absolutely amazing. And not once for a single moment have I second-guessed my decision. And it’s really weird because I’ve now been part of this organization for nearly nine months, and there just has not been one thing that’s occurred where I said, “That’s a disappointment.” It’s just been absolutely amazing every single day.

Louis Diamond:

Very cool. To me, there’s different arcs of when you want to ask people the question of, “Hey, any regrets?” And usually you don’t want to ask them too soon because they’re still going through the transition and integration and growing pains. And you don’t want to ask them too far in the future because you forget about what was life before. To be this short of a duration into this new partnership and to have these feelings, that’s absolutely pretty special. I got two more questions for you, Pat, if you don’t mind.

Patrick Larkin:

Sure.

Louis Diamond:

First one, economically, to me, one of the hardest things for really any advisor to really grapple with or to fully comprehend or make their own is, “I own 100% of the equity in my business. I get to decide when I want to sell in the future. My business is growing 10% per year. I wait to sell until 10 years from now, my business is going to be much bigger and I get to keep all the cash flow. I get to make all the decisions.” That compared to the path that you took, which was take cash off the table, which everyone understands, to, “Now, I own a much smaller piece of a much larger pie.” How would you talk to someone about the financial trade-off between a hundred percent ownership in their business, full control, full discretion over everything, versus becoming a minority equity partner in a larger entity?

Patrick Larkin:

You have to look at the valuation of my business, again, the day that we opened our doors as Oak Hill Wealth Advisors. There was such a massive jump in the value of the business. There was not going to be an opportunity for an appreciation at that level. So then, you have to compare what the growth rate is of Oak Hill Wealth Advisors versus a Cerity Partners. And I’m not embarrassed to say that Cerity Partners is and has been growing at a much faster rate of return. The value of the equity that I have retained in Cerity Partners, my ownership stake, I fully expect by the time I transact that business as I get closer to retirement, that’s going to be worth many times more than whatever opportunity I would have had at Wells Fargo with the valuation they would have provided me.

Nevermind, very important, the tax consequences of a structure like this is all the retiring advisors that I worked with were taxed at their highest marginal rate. I owned a business and we were taxed at long-term capital gains rates. A significant difference in savings in what as the owner we actually realize. So yeah, I feel very comfortable with the ownership that I have and the control and continued opportunity with the meritocracy culture to increase my share of ownership in the company.

Louis Diamond:

Okay, and let’s do one more question here. I’ll pick it back up. So Pat, I think it’s a really cool perspective. It’s almost do your homework, and if you find the right horse and the right jockey that can run faster than you can on your own, that the equity value will compound and grow and appreciate in a faster, more efficient way than what you’re doing on your own, which makes complete sense. It’s the ultimate trade-off. And again, it’s like jumping into the deep end. On the one hand, Oak Hill was all you, right? You control the growth, for better or worse, for the good days, the bad days, the good years, the bad years, versus now your growth is diversified amongst hundreds of partners across M&A, across different lead flow channels, et cetera. It makes complete sense. But honestly, if I were an advisor, I don’t know how I would think about it.

I think it’s all just fact-and-circumstance-based on where I am in my life and who the firm is and what I’m trying to accomplish. But it’s such a cool perspective because usually the playbook that we see, which is why we did this series, is go independent and there’s a long pause until there is a realization of all the value that’s been created. So seeing you do this in a much quicker timeframe, it seems like it was the absolutely right decision. To me, it just is another path, another way that an advisor or a firm is able to think about their future. Any final advice or parting words for someone who is sitting right where you were in 2021 or 2022 thinking about making the leap? And we’ll say a transition in general, or really anything you want to share to wrap our episode here.

Patrick Larkin:

Thank you for having me, and this is a great question. Happy to give a thoughtful answer to it. Before I’d left Wells Fargo Advisors through the program and started Oak Hill Wealth Advisors, I had an opportunity to go through a due diligence process and make sure that this was going to be a right move for me. There was no carrot out there that was obvious. I learned after that first conversation that I had built a practice that had some value to it. I was leaving behind the security of something I knew, leaving behind a significant amount in deferred compensation, and I wanted to make sure I was making the right decision. And through that due diligence process, talked to about five other firms that had recently left Wells Fargo to join this RIA program.

I asked them a lot of different questions about what their experience was. And at every point during those conversations, they all said the same thing at different points. And it sounded like this. They said, “I’m working harder than I ever have before, but I wish I had done this sooner.” So my advice to those people, do it. I know that sounds simple, but I mean it. The fear of leaving is almost always worse than the actual experience of leaving. And I understand the inertia of not leaving and the real apprehension of what was on the other side. But what I found was a version of this profession I genuinely didn’t know was possible.

One where I could do things the right way on my terms for the people I care most about serving. And not every path is going to look like mine. Some advisors should go fully independent and stay there, and that can be an incredible life. But when it comes time to look for a partner, quite frankly, if Cerity Partners is not on your shortlist, you’re making a significant mistake. And I say that not to sell anything, but because I’ve lived the comparison firsthand and there’s simply nothing else like it.

Louis Diamond:

So Pat, it’s been really fun, but I don’t think we’ve had anyone on the eight years or so we’ve been doing this show that’s gone through this type of arc or journey that you have. One of my big takeaways or sticking points that this episode brought for me is by going independent and taking control over your future, you created complete optionality for yourself to do exactly what you wanted to do with your business, even if that was different than what you initially planned. So in your case, it was selling within three years of going independent, but by taking action, being proactive, playing some offense, you made the opportunity happen on your terms and your timeline.

So this has been fun in so many different ways. I loved your comment about how when you went independent, it’s basically like the day of your IPO, the four-to-five-times increase in value versus an internal succession deal, and even just the way to think about getting equity in a larger entity versus running your own plays only. So thank you so much for doing this. This has been fun.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firm’s or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at https://www.diamond-consultants.com/thebook/.

Build, Grow & Transact: From Breakaway to Transaction in 3 Years

A conversation with Louis Diamond and Patrick Larkin, Partner & Practice Leader at Cerity Partners.

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: From Breakaway to Transaction in 3 Years. It’s a conversation with Patrick Larkin, Partner and Practice Leader at Cerity Partners. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our cl

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